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Exhibit 99.6
EXECUTION COPY
FLOW SALE AGREEMENT
(Residential Mortgage Loans)
Dated as of November 1, 2006
by and among
LUMINENT MORTGAGE CAPITAL, INC.,
MERCURY MORTGAGE FINANCE STATUTORY TRUST
and
MAIA MORTGAGE FINANCE STATUTORY TRUST,
as Purchasers
and
LEHMAN CAPITAL, A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
as Seller
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS..........................................................1
ARTICLE II AGREEMENT TO PURCHASE; PURCHASE PRICE; POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; DELIVERY OF
DOCUMENTS; CLOSING
CONDITIONS.................................12
Section 2.01.
Agreement to Purchase; Purchase Price; Mortgage and
Servicing Files.......................................12
Section 2.02. Books
and Records; Transfers of Mortgage Loans........13
Section 2.03.
Custodial Agreement; Delivery of Documents............14
Section 2.04. Closing
Conditions....................................15
ARTICLE III REPRESENTATIONS AND WARRANTIES REMEDIES AND
BREACH................16
Section 3.01. Seller
Representations and Warranties.................16
Section 3.02.
Purchasers' Representations and Warranties............17
Section 3.03.
Representations and Warranties Regarding Individual
Mortgage Loans........................................18
Section 3.04.
Repurchase............................................18
Section 3.05.
Repurchase of Mortgage Loans With First Payment
Defaults..............................................19
Section 3.06. Purchase
Price Protection.............................20
Section 3.07. Review
of Mortgage Loans..............................20
ARTICLE IV SELLER TO
COOPERATE................................................21
Section 4.01. Actions
of Servicer...................................21
Section 4.02.
Cooperation...........................................21
ARTICLE V THE
SELLER..........................................................21
Section 5.01.
Indemnification; Third Party Claims...................21
ARTICLE VI WHOLE LOAN TRANSFERS AND SECURITIZATION
TRANSACTIONS...............22
Section 6.01. Removal
of Mortgage Loans from Inclusion Under
this Agreement........................................22
ARTICLE VII MISCELLANEOUS
PROVISIONS..........................................23
Section 7.01.
Amendment.............................................23
Section 7.02.
Governing Law.........................................23
Section 7.03. Duration
of Agreement.................................23
Section 7.04.
Notices...............................................23
Section 7.05.
Severability of Provisions............................24
Section 7.06.
Relationship of Parties...............................24
Section 7.07.
Execution; Successors and Assigns; Counterparts.......25
Section 7.08.
Recordation of Assignments of Mortgage................25
Section 7.09.
Assignment by Purchaser...............................25
Section 7.10.
Solicitation of Mortgagor.............................25
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Section 7.11. Further
Agreements....................................26
Section 7.12.
Confidential Information..............................26
Section 7.13.
Exhibits..............................................27
Section 7.14. General
Interpretive Principles.......................27
Section 7.15.
Reproduction of Documents.............................27
Section 7.16. Purchase
Price and Terms Letter.......................28
EXHIBITS
Exhibit A Mortgage Loan
Documents
Exhibit B Custodial
Agreement
Exhibit C Form of
Assignment, Assumption and Recognition Agreement
Exhibit D Representations
and Warranties Regarding Individual
Mortgage Loans
Exhibit E Form of
Memorandum of Sale
Exhibit F Regulation AB
Compliance Addendum
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FLOW
SALE AGREEMENT,
dated as of November
1, 2006 (as amended,
restated,
supplemented or
otherwise modified and in effect from time to time, this
"Agreement"), is made
by and among LUMINENT
MORTGAGE CAPITAL,
INC., MERCURY
MORTGAGE FINANCE
STATUTORY TRUST,
MAIA MORTGAGE
FINANCE STATUTORY TRUST, as
purchasers (collectively, the "Purchasers", and individually, as the
purchaser
of any Mortgage Loan (defined below) hereunder, the "Purchaser"), and LEHMAN
CAPITAL, A DIVISION OF BROTHERS HOLDINGS INC., as seller (the
"Seller").
W I T N E S S E T H
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WHEREAS, among
other things, the Seller is in the business of selling
residential first and second lien fixed and adjustable rate
mortgage loans; and
WHEREAS, each
Purchaser has agreed
to purchase from time to time from the
Seller and the Seller
has agreed to sell from time to time
to such Purchaser
first and second lien fixed and adjustable rate mortgage loans;
and
WHEREAS, the Mortgage Loans will be sold by the Seller and
purchased by the
Purchaser as pools or
groups of whole loans, servicing retained (each, a
"Mortgage Loan Package") on the various Closing Dates as provided
herein; and
WHEREAS, each of the Mortgage Loans will be secured by a mortgage,
deed of
trust or other security instrument creating a first or second lien on a
residential dwelling
located in the jurisdiction indicated on the related
Mortgage Loan Schedule
for the related
Mortgage Loan
Package, which will be
annexed to a Memorandum of Sale on the related Closing Date;
and
WHEREAS, each Mortgage
Loan Package will
initially be serviced
by Aurora
Loan Services LLC,
pursuant to a Servicing Agreement, dated as of November 1,
2006 by and among the Seller, the Purchasers and Aurora Loan
Services LLC; and
WHEREAS, following any
purchase of the Mortgage Loans from the Seller, the
Purchaser may desire
to sell some or all of the Mortgage Loans to one or more
purchasers as a whole
loan transfer,
agency transfer or a public or
private,
rated or unrated mortgage securitization transaction.
NOW,
THEREFORE, in
consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, each of the Purchasers and the
Seller agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used herein,
the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing
Practices:
With respect to any
Mortgage Loan,
those
mortgage servicing practices and procedures (including collection procedures)
(i) of prudent mortgage lending institutions which service mortgage
loans of the
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same type as such Mortgage Loans in the jurisdiction where the
related Mortgaged
Property is located,
(ii) that comply with applicable federal, state and local
law and (iv) that,
where applicable, are in accordance with the Fannie Mae
Guides in all material respects.
Adjustable Rate
Mortgage Loan: A Mortgage Loan that
contains a provision
pursuant to which the Mortgage Interest Rate is adjusted
periodically.
Agreement: As defined in the introductory paragraph hereof.
ALTA: The American Land Title Association or any successor
thereto.
Anti-Money Laundering Laws: As defined in paragraph (ff) of Exhibit
D.
Appraisal: A written
appraisal of a Mortgaged Property made by a Qualified
Appraiser, which appraisal must be written, in form and substance,
to Fannie Mae
and Freddie Mac
standards, and
satisfy the requirements of Title XI of the
Financial Institution,
Reform, Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, in effect as of the date of the
appraisal.
Appraised Value:
The value set forth in
an appraisal made in
connection
with the origination of the related Mortgage Loan as the value of the
Mortgaged
Property.
Approved Flood Policy Insurer: An insurer that meets the
guidelines of the
Federal Insurance Administration.
Assignment,
Assumption and
Recognition
Agreement:
The agreement
substantially in the form of Exhibit C attached hereto.
Assignment of Mortgage: An assignment of the Mortgage,
notice of transfer
or equivalent
instrument in recordable form, sufficient under the laws of
the
jurisdiction wherein
the related Mortgaged
Property is located to
reflect the
sale of the Mortgage to the Purchaser.
BPO:
A broker's price opinion with respect to a Mortgaged Property.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii)
a day on
which banking
and savings and loan institutions in the State of New York,
Colorado, Nebraska or
the state in which the Seller's servicing operations are
located are authorized or obligated by law or executive order to be
closed.
Buydown Agreement:
An agreement
which provides for the application of
Buydown Funds.
Buydown Funds: In
respect of any Buydown
Mortgage Loan, an amount held by
the servicer of such Buydown Mortgage Loan in order to enable the
Mortgagor to
reduce the
portion of each Monthly Payment required to be made from the
Mortgagor's funds.
Buydown Mortgage
Loan: Any Mortgage Loan that is subject to a Buydown
Agreement.
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Buydown Period:
The period of time
when a Buydown
Agreement is in effect
with respect to a related Buydown Mortgage Loan.
Closing Date: With
respect to a Mortgage Loan Package, the date or dates,
set forth in the
related Memorandum of Sale, on which the Purchaser will
purchase and the Seller will sell the Mortgage Loans identified
therein.
Code: The Internal
Revenue Code of 1986, as it may be amended from time to
time or any successor
statute thereto,
and applicable U.S.
Department of the
Treasury regulations issued pursuant thereto.
Combined Loan-to-Value
Ratio or CLTV:
With respect to any Second Lien
Mortgage Loan,
the sum of the
original principal
balance of such Second
Lien
Mortgage Loan
and the outstanding principal balance, as of the date of
origination of the
Second Lien Mortgage
Loan, of any mortgage loan which is
senior in priority to such Second Lien Mortgage Loan, divided by the lesser of
(i) the Appraised Value of the Mortgaged Property and (ii) if the Mortgage
Loan
was made to finance the acquisition of the related Mortgaged Property, the
purchase price of the Mortgaged Property.
Consumer Information:
Shall have the meaning
set forth in the Interagency
Guidelines
Establishing
Standards for
Safeguarding
Customer
Information
published in final
form on February 1, 2001, 66 Fed. Reg. 8616 (as amended,
supplemented or restated).
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to
Appendix
E of Standard & Poor's Glossary.
Custodial Account: The
separate account or accounts created and maintained
pursuant to Section 4.04 of the Servicing Agreement.
Custodial Agreement: The agreement governing the retention of the
originals
of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan
Documents, which is annexed hereto as Exhibit B.
Custodian: The custodian under the Custodial Agreement, or its
successor in
interest or assigns,
or any successor
to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: With respect to each Mortgage Loan in a Mortgage
Loan
Package, the date set forth in the related Purchase Price and Terms
Letter.
Defective Document: As defined in Section 3.04.
Depositor: The
depositor,
as such term is
defined in Regulation AB, with
respect to any Securitization Transaction.
Due
Date: The first day of the month on which the Monthly Payment is
due on
a Mortgage Loan,
exclusive of any days of grace. With respect to each Mortgage
Loan for which payment from the related Mortgagor is due on a day
other than the
first day of the
month, each such
Mortgage Loan will be treated as if the
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Monthly Payment is due
on the first day of the month following the actual Due
Date.
Due
Period: With respect
to each Remittance Date, the period commencing on
the second
day of the month
preceding the month of the Remittance Date and
ending on the first day of the month of the Remittance Date.
Escrow Account:
The separate
account or accounts
created and
maintained
pursuant to the Servicing Agreement.'
Escrow Payments:
With
respect to any Mortgage Loan, the amounts
constituting ground
rents, taxes, assessments, water rates, sewer rents,
municipal charges,
mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to
be escrowed by
the Mortgagor with the
mortgagee pursuant to
the Mortgage or any other related
document.
Fannie Mae:
The entity formerly known as Federal National Mortgage
Association (FNMA), or any successor thereto.
First Lien Mortgage
Loan: A Mortgage Loan secured by a first priority lien
on the related Mortgaged Property.
Freddie Mac: The entity formerly known as the Federal Home Loan
Mortgage
Corporation (FHLMC), or any successor thereto.
GAAP: With
respect to the financial statements or other financial
information of any
Person, generally
accepted accounting principals in the
United States that are in effect from time to time.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed
percentage amount set
forth in the related
Mortgage Note which is added to the
Index in order to determine the related Mortgage Interest Rate.
High
Cost Loan: A Mortgage
Loan (a) covered by HOEPA or (b) a "high
cost
home," "threshold,"
"covered,"
(excluding New Jersey
"Covered Home Loans"
as
that term was defined
in clause (1) of the
definition of that
term in the New
Jersey Home Ownership
Security Act of 2002 during the period between November
26, 2003 and July 7, 2004), "high risk home," "predatory" or
similar loan under
any other applicable state, federal or local law (or a similarly
classified loan
using different
terminology under a law imposing heightened regulatory scrutiny
or additional
legal liability for residential mortgage loans having high
interest rates, points and/or fees).
HOEPA: The Home Ownership and Equity Protection Act of 1994, as
amended.
Holding Period:
As to each
Mortgage Loan, except as set forth in the
related Purchase
Price and Terms
letter, the period
beginning on the
Closing
Date and ending on the last day of the second full calendar month
thereafter.
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Index: With respect to
any Adjustable
Rate Mortgage
Loan, the index
set
forth in the related
Mortgage Note for the purpose of calculating interest
therein.
Interest Only Mortgage Loan:
A Mortgage Loan that requires only payments of
interest for a period of time specified in the related Mortgage
Note.
Interim Funder:
With respect to each
MERS Designated
Mortgage Loan, the
Person named on the
MERS System as the
interim funder pursuant to the MERS
Procedures Manual.
Investor: With respect
to each MERS
Designated Mortgage
Loan, the Person
named on the MERS System as the investor pursuant to the MERS
Procedures Manual.
Liquidation Proceeds: Cash received in connection with the
liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of
such Mortgage
Loan, trustee's sale, discounted payoff, foreclosure sale or otherwise,
or the
sale of an REO Property acquired in satisfaction of the Mortgage
Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio of
the original
loan amount of the Mortgage Loan at its origination (unless
otherwise indicated)
to the lesser of (i) the Appraised Value of the Mortgaged
Property and (ii) if the Mortgage Loan was made to finance the
acquisition
of
the related Mortgaged Property, the purchase price of the Mortgaged
Property.
Losses: Losses,
damages, penalties,
fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and
expenses,
provided, however,
that losses shall not include punitive, consequential,
exemplary or special
damages except to the extent that an
indemnified
party
hereunder is
obligated to pay such damages to a third party that is not an
indemnitee of such indemnified party.
Master Servicer:
With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction
documents.
Memorandum of Sale:
With respect to each
Mortgage Loan and the Mortgage
Loan Package, the
memorandum of sale,
substantially
in the form of Exhibit
E
attached hereto,
confirming the sale by Seller and the purchase by Purchaser of
the Mortgage Loan Package on the related Closing Date.
MERS: MERSCORP, Inc., its successors and assigns.
MERS
Designated Mortgage Loan: A Mortgage Loan for which (a) the Seller
has
designated or will
designate MERS as, and has taken or will take such action as
is necessary to cause
MERS to be, the
mortgagee of record,
as nominee for the
Seller, in
accordance
with MERS Procedures Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the
MERS System.
MERS
Procedures Manual:
The MERS Procedures
Manual, as it may be amended,
supplemented or otherwise modified from time to time.
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MERS
Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS
System: MERS mortgage electronic registry system, as more
particularly
described in the MERS Procedures Manual.
Monthly Payment: With
respect to any Mortgage Loan, the scheduled payment
of principal,
if any, and interest payable by a Mortgagor
under the related
Mortgage Note on each Due Date, which payment may change on any
Adjustment Date
as provided in the related Mortgage Note and Mortgage for any
Adjustable
Rate
Mortgage Loan.
Moody's: Moody's Investors Service, Inc.
Mortgage: The
mortgage, deed of trust or other instrument securing a
Mortgage Note,
which creates a first
lien on an
unsubordinated estate
in fee
simple or leasehold estate in real property securing the Mortgage
Note.
Mortgage File: The items pertaining to a particular Mortgage Loan that are
held by the Custodian and any additional documents required to be added to the
Mortgage File pursuant to this Agreement.
Mortgage Interest
Rate: The annual rate of interest
borne on a
Mortgage
Note in accordance
with the provisions of the Mortgage Note
net of any Relief
Act Reduction.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this
Agreement, each Mortgage Loan originally sold and subject to this
Agreement
being identified on the Mortgage Loan Schedule annexed to the
related Memorandum
of Sale, which Mortgage Loan includes without limitation the
Mortgage File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds and all
other rights,
benefits, proceeds and obligations arising from or in connection
with such
Mortgage Loan, except for any and all Servicing Rights related
thereto.
Mortgage Loan Documents: The documents referred to in Exhibit
A.
Mortgage Loan
Package: The pool or group of whole loans
purchased on a
Closing Date, as described in the Mortgage Loan Schedule
annexed to the
related
Memorandum of Sale.
Mortgage Loan
Remittance Rate:
With respect to each
Mortgage Loan,
the
annual rate of interest remitted to the Purchaser,
which shall be equal
to the
related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan
Schedule: With respect
to each Mortgage Loan
Package, the
schedule of
Mortgage Loans annexed to the related Memorandum of Sale (and
delivered in electronic format to the Purchaser),
such schedule
setting forth
the following
information
with respect to each
Mortgage Loan in the related
Mortgage Loan Package:
(1) the Seller's Mortgage Loan number;
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(2) Mortgagor's name
(including any co-mortgagors);
(3) the full street address, city, state and zip code of the
Mortgaged Property;
(4) the Mortgagor's
and co-mortgagor's FICO score;
(5) a code indicating
whether the loan was originated through a
correspondent, retail, or wholesale channel;
(6) the number of
units for all Mortgaged Properties;
(7) [Reserved];
(8) a code indicating
whether the Mortgaged Property is a single
family residence,
two-family residence,
three-family residence,
four-family residence,
PUD, townhouse or
condominium or secured
by Co-op Shares;
(9) the Mortgage
Interest Rate as of the Cut-off Date;
(10) the Mortgage Interest Rate as of the date of origination;
(11) the current Mortgage Loan Remittance Rate;
(12) the Monthly Payment as of the date of origination;
(13) the Monthly Payment as of the Cut-off Date;
(14) the date of the Mortgage Note;
(15) the principal balance of the Mortgage Loan as of the Cut-off
Date
after deduction
of payments of
principal due on or before the
Cut-off Date whether or not collected;
(16) the date on which the first Monthly Payment was due;
(17) the last payment date on which a payment was applied;
(18) the original term to maturity or the remaining months to
maturity
from the related
Cut-off Date, in any case based on the original
amortization schedule,
and if different, the
maturity expressed
in the same manner but based on the actual amortization
schedule;
(19) the scheduled maturity date;
(20) the Loan-to-Value Ratio;
(21) a code indicating the type of Adjustable Rate Mortgage Loan
(i.e.
3/1, 5/1, 7/1, etc.);
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(22) the Gross
Margin;
(23) the Index;
(24) Adjustment Dates
and the next Adjustment Date;
(25) the lifetime
Mortgage Interest Rate cap and Periodic Caps;
(26) a code
indicating
whether the Mortgage
Loan is convertible
or
not;
(27)
a code indicating the name of the issuer of the PMI
Policy, if
any;
(28) a code indicating
the lien status of the Mortgage Loan;
(29) a code indicating whether the Mortgage Loan is a Buydown
Mortgage Loan;
(30) a code
indicating
whether such
Mortgage Loan provides for a
Prepayment Penalty
and, if applicable, the Prepayment
Penalty
period for such loan;
(31) a code indicating whether the Mortgaged Property is
owner-occupied or investor property;
(32) the documentation
level (full, alternative, limited);
(33) loan purpose;
(34) the Appraised
Value;
(35) the applicable
Servicing Fee Rate;
(36) a code indicating
whether the Mortgage Loan is a "high cost" (or
similarly classified)
loan under applicable
federal, state and
local laws;
(37) the
debt-to-income ratio of the Mortgagor; and
(38) delinquency
counter.
With respect to the
Mortgage Loans in the aggregate in the related
Mortgage Loan Package, the respective Mortgage Loan Schedule shall
set
forth the following information, as of the Cut-Off Date:
(i) the number
of Mortgage Loans;
(ii) the current aggregate outstanding principal balance of the
Mortgage Loans;
(iii) the weighted
average Mortgage Interest Rate of the Mortgage
Loans;
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(iv) the weighted
average months to maturity of the Mortgage Loans.
Mortgage Note:
The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property, including any improvements,
securing
repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization:
An increase in the
mortgage debt that
occurs when
the Monthly Payment is not sufficient for full application to both
principal and
interest. The
interest shortage is added to the unpaid
principal balance to
create "negative" amortization.
Officer's Certificate: A certificate signed by the Chairman of the
Board or
the Vice Chairman of
the Board or the
President, a Senior
Vice President,
a
First Vice President,
a Vice President,
Assistant Vice
President,
Treasurer,
Secretary, Assistant
Treasurer,
Assistant Secretary or another authorized
signatory of the Seller.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of
the Seller, reasonably acceptable to the Purchaser.
Payment Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan
or Interest Only Mortgage Loan, the date on which Monthly Payments shall be
adjusted. With
respect to each
Adjustable
Rate Mortgage Loan, the Payment
Adjustment Date
shall occur on the date which is 11 months from the first
payment date for the Mortgage Loan, unless otherwise specified in the Mortgage
Note, and on each anniversary of such first Payment Adjustment
Date.
Periodic Interest Rate
Cap: As to each
Adjustable Rate Mortgage Loan, the
maximum increase or
decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Person: Any individual, corporation, partnership, joint venture, limited
liability company,
association,
joint-stock
company, trust, unincorporated
organization, government or any agency or political subdivision
thereof.
Prepayment Interest Shortfall: As to any Remittance Date and each
Mortgage
Loan subject to a
Principal Prepayment received during the calendar month
preceding such
Remittance
Date, the amount, if any, by which one month's
interest at the
related Mortgage Loan Remittance Rate on such Principal
Prepayment exceeds the amount of interest paid in connection with
such Principal
Prepayment.
Prepayment Premium:
Payments received on a
Mortgage Loan as a result of a
Principal Prepayment
hereon, not otherwise
due thereon in respect of principal
or interest, which,
unless otherwise set
forth in the Purchase Price and Terms
Letter, shall be retained by the Seller.
Principal Prepayment:
Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due
Date, including
any Prepayment Premium
thereon (to the extent the Purchaser is entitled to such
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pursuant to the
related Purchase Price and Terms Letter) and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price: The
price paid on the Closing Date by the Purchaser to the
Seller for the Mortgage Loans.
Purchase Price and Terms Letter: The letter agreement between the Seller
and the Purchaser entered into prior to the related Closing Date
relating to the
sale of one or more Mortgage Loan Packages.
Purchaser(s): As defined in the introductory paragraph hereof.
Qualified Appraiser:
An appraiser who had no interest, direct or indirect
in the Mortgaged Property or in any loan made on the security
thereof, and whose
compensation was not
affected by the
approval or
disapproval of the
Mortgage
Loan, and such appraiser and the appraisal made by such appraiser
both satisfied
the requirements of Title XI of the Financial Institution Reform,
Recovery, and
Enforcement Act and the regulations promulgated thereunder,
all as in effect
on
the date the Mortgage Loan was originated.
Rating Agency:
Each of Fitch,
Inc., Moody's and S&P, or any successor
thereto.
Reconstitution Agreement: As defined in Section 6.01.
Reconstitution Date:
The date on which any
or all of the Mortgage
Loans
serviced under
this Agreement shall be removed from this Agreement and
reconstituted as part
of a Securitization
Transaction
or Whole Loan
Transfer
pursuant to Section
6.01 hereof.
The Reconstitution Date shall be such date
which the Purchaser
and the subsequent
purchaser or
transferee of the related
Mortgage Loans
shall designate. On such date, except as provided in this
Agreement, the
Mortgage Loans transferred shall cease to be covered by
this
Agreement and the
Seller's servicing
responsibilities
shall cease under
this
Agreement with respect to the related transferred Mortgage
Loans.
Regulation AB
Compliance
Addendum:
Exhibit
F attached hereto and
incorporated herein by reference thereto.
Relief Act Reduction:
With respect to any
Mortgage Loan as to which there
has been a reduction in the amount of interest collectible thereon as a result
of the application of the Servicemembers Civil Relief Act, as amended,
or any
similar state or local
law, any amount by which interest collectible on such
Mortgage Loan for the
Due Date in the
related Due Period is less than the
interest accrued
thereon for the
applicable one-month
period at the
Mortgage
Interest Rate without giving effect to such reduction.
REMIC: A "real estate
mortgage investment
conduit" within the
meaning of
Section 860D of the Code.
REMIC Provisions:
Provisions of the
federal income tax law
relating to a
REMIC, which appear at
Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
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<PAGE>
pronouncements
promulgated
thereunder, as the
foregoing may be in effect from
time to time.
Repurchase Price:
Except as otherwise
provided in the
Purchase Price and
Terms Letter, with respect to any Mortgage Loan, the Stated
Principal Balance of
the Mortgage Loan plus interest on such Stated Principal Balance at
the Mortgage
Loan Remittance
Rate from the date on which
interest has last been paid and
distributed to the
Purchaser to the last day of the month in which such
repurchase occurs,
less amounts received or advanced in respect of such
repurchased Mortgage
Loan which are being
held in the Custodial
Account for
distribution in the month of repurchase plus, without duplication,
the amount of
any advances owed to any servicer.
RESPA: The Real Estate Settlement Procedures Act, as amended.
S&P: Standard
& Poor's Ratings
Services, a division of The McGraw-Hill
Companies., Inc.
Second Lien Mortgage
Loan: A Mortgage
Loan secured by a
second priority
lien on the related Mortgaged Property.
Securities Act of 1933
or the 1933 Act: The
Securities
Act of 1933,
as
amended.
Securitization Transaction: Any transaction involving either
(1) a sale or
other transfer of some or all of the Mortgage Loans directly or
indirectly to an
issuing entity in connection with an issuance of publicly
offered or
privately
placed, rated or
unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities,
the payments
on which are
determined primarily
by reference to one or
more portfolios
of
residential mortgage
loans consisting,
in whole or in part,
of some or all of
the Mortgage Loans.
Seller: As defined in the introductory paragraph hereof.
Servicer: Aurora Loan Services LLC.
Servicing Agreement: The servicing agreement, dated as of November
1, 2006,
by and among the Purchasers, the Servicer and the Seller,
as servicing
rights
owner.
Servicing File:
With respect to each
Mortgage Loan, the
file retained by
the Seller consisting of originals or copies, which may be imaged
copies, of all
documents in the Mortgage File which are not delivered to the Custodian and
copies of the Mortgage
Loan Documents
listed in the
Custodial Agreement the
originals of which are delivered to the Custodian pursuant to
Section 2.03.
Servicing Officer: Any officer of the Seller involved in or
responsible for
the administration
and servicing of the
Mortgage Loans whose name appears on a
list of servicing
officers furnished by the Seller to the Purchaser upon
request, as such list may from time to time be amended.
Servicing Rights: With respect to each Mortgage Loan, any of the
following:
(a) all rights to service the Mortgage Loan; (b) any payments or monies
payable
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or received or receivable for servicing the Mortgage
Loan, (c) any late fees,
assumption fees, penalties or similar payments with respect to the
Mortgage; (d)
all agreements or documents creating, defining or evidencing any such
servicing
rights and all rights of the Seller thereunder; (e) Escrow Payments or other
similar payments
with respect to the Mortgage
Loan and any amounts
actually
collected with
respect thereto; (f) all accounts and other rights
to payment
related to any of the property described in this paragraph;
(g) possession and
use of any and all Servicing Flies pertaining to the Mortgage Loan
or pertaining
to the past, present or prospective servicing of the Mortgage Loan;
and (h) all
rights, powers and privileges incident to any of the forgoing.
Stated Principal
Balance: As to each Mortgage Loan as to any date of
determination, (i) the
principal balance of the Mortgage
Loan at the
related
Cut-off Date
after giving effect to the principal portion of any Monthly
Payments due on or
before such date,
whether or not
received, as well as
any
Principal Prepayments
received before such date, minus (ii) all amounts
previously distributed
to the Purchaser with respect to the Mortgage Loan
representing payments or recoveries of principal, or advances in
lieu thereof.
Underwriting Guidelines: The underwriting guidelines
pursuant to which one
or more of the Mortgage Loans were originated, as attached as an exhibit to
the
Memorandum of Sale. The exception policies of the Seller shall be
incorporated
into and considered a part of the Underwriting Guidelines.
Whole Loan Transfer:
Any sale or transfer
of some or all of the
Mortgage
Loans, other than a Securitization Transaction.
ARTICLE II
AGREEMENT TO PURCHASE; PURCHASE PRICE; POSSESSION OF MORTGAGE
FILES; BOOKS AND RECORDS; DELIVERY OF DOCUMENTS; CLOSING
CONDITIONS
Section 2.01. Agreement to Purchase; Purchase Price; Mortgage and
Servicing
--------------------------------------------------------
Files.
-----
(a)
Agreement to Purchase.
----------------------
(i)
In exchange for the payment of the Purchase Price to the Seller on the
related Closing Date,
the Seller
agrees to sell and the
Purchaser agrees to
purchase, without
recourse but subject to the terms of this
Agreement,
on a
servicing retained basis, all the right, title and interest of the
Seller in and
to the Mortgage
Loans included in a Mortgage Loan Package, other than the
Servicing Rights with respect thereto.
(ii)
The Purchaser,
on each Closing Date, does hereby assume for the
benefit of the Seller all of the rights, title, interest, and
obligations of the
Seller arising from
and after the related
Closing Date (except with respect to
Servicing Rights), in and to (A) the Mortgage Loans in the related
Mortgage Loan
Package and (B) with respect to each Mortgage Loan in the related
Mortgage Loan
Package, the Mortgage Files.
(b)
Purchase Price.
---------------
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<PAGE>
(i)
The Purchase
Price for each Mortgage Loan Package shall be the
percentage of par as
stated in or as otherwise calculated pursuant to the
related Purchase
Price and Terms
Letter (subject to adjustment as provided
therein) multiplied by
the aggregate Stated
Principal Balance of
the Mortgage
Loans listed on the related Mortgage Loan Schedule as of the related
Cut-off
Date, plus accrued
interest on the aggregate Stated Principal Balance of the
Mortgage Loan Package at the weighted average Mortgage Loan
Remittance Rate from
the related Cut-off
Date through the day prior to the
related Closing
Date,
inclusive. Such payments shall be made by Purchaser to the account
designated by
the Seller
by wire transfer to immediately available funds by 3:00 p.m.,
Charlotte, North Carolina time, on the related Closing Date.
(ii)
The Purchaser
shall be entitled to
(A) all scheduled
principal due
after the related Cut-off Date, (B) all other recoveries of
principal
collected
on or after the related Cut-off Date (minus any
principal due on or
before the
Cut-off Date),
(C) all payments of interest after the Cut-off Date on the
Mortgage Loans at the Mortgage Loan Remittance Rate (minus that portion of
any
such payment that is allocable to the period prior to the related
Cut-off Date)
and (D) to the extent
set forth in the
Purchase Price and
Terms Letter,
all
Prepayment Premiums.
(iii) If, subsequent
to the related Closing Date, the principal amount on
which the Purchase
Price with respect to a Mortgage Loan was based is found to
be in error, or if,
for any other
reason, the Purchase Price or such other
amounts are found to
be in error, within
ten Business
Days of the receipt
of
information sufficient
to provide notice that payment is due the party
benefiting from the
error shall pay an amount sufficient to correct and
reconcile the Purchase Price.
(c)
Possession of Mortgage Files.
-----------------------------
Upon
the sale of the Mortgage Loans the ownership of each
Mortgage Note,
the related Mortgage and the related Mortgage File and Servicing
File shall vest
immediately in the
Purchaser,
and the ownership of all records and
documents
with respect to the
related Mortgage
Loan prepared by or which come into
the
possession of the
Seller shall vest
immediately in the
Purchaser and shall be
retained and
maintained by the Seller, in trust, at the will of the Purchaser
and only in such custodial capacity.
Section 2.02. Books
and Records; Transfers of Mortgage Loans.
----------------------------------------------
(a)
From and after the
sale of the Mortgage
Loans to the
Purchaser all
rights arising out of
the Mortgage Loans,
including,
but not limited to,
all
funds received on or in connection with the Mortgage Loans, but not including
Servicing Rights or Prepayment Premiums except to the extent
provided for in the
Purchase Price and
Terms Letter,
shall be received
and held by the Seller
in
trust for the benefit of the Purchaser as owner of the Mortgage
Loans.
(b)
The sale of each
Mortgage Loan
shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by
the Seller.
The Seller shall be responsible for maintaining, and shall maintain, a complete
set of books and records for each Mortgage Loan, which shall be marked clearly
to reflect the ownership of each Mortgage Loan by the
Purchaser.
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<PAGE>
(c)
No transfer of a Mortgage Loan may be made unless such
transfer is in
compliance with the terms hereof. For the purposes of this
Agreement, the Seller
shall be under no
obligation to deal
with any person with respect to this
Agreement or the Mortgage Loans unless the books and records show
such person as
the owner of the Mortgage Loan. The Purchaser may, subject to the terms of this
Agreement, sell
and transfer one or more of the Mortgage Loans; provided,
however, that the
transferee
will not be deemed to
be a Purchaser
hereunder
binding upon the
Seller unless
such transferee shall agree in writing to be
bound by the
terms of this Agreement and an Assignment, Assumption and
Recognition Agreement.
The Purchaser
shall also advise the
Seller of any such
transfer.
Section 2.03.
Custodial Agreement; Delivery of Documents.
------------------------------------------
(a)
The Seller will,
with respect to each Mortgage Loan, deliver and
release the Mortgage Loan Documents to the Custodian at least five
Business Days
prior to the related Closing Date.
(b)
With respect to any Mortgage Loan that is not a MERS Designated
Mortgage Loan, the Seller shall deliver an Assignment of Mortgage
(together with
any intervening
Assignments
of Mortgage)
in blank in
recordable
form. All
recording fees and
other costs associated with the initial recording of
Assignments of
Mortgage and other
relevant documents to
the Purchaser or
its
designee will be borne by the Seller. For Mortgage Loans not
registered
under
the MERS System, if
the Purchaser
requests that the related Assignments of
Mortgage be recorded,
the Seller shall cause such Assignments of Mortgage which
were delivered in blank to be completed and to be recorded.
The Seller shall
be
required to deliver such Assignments of Mortgage for recording
within 90 days
after the date on which the Seller is notified that recording will be required
pursuant to this Section 2.03. The Seller shall furnish the Custodian with a
copy of each Assignment of Mortgage submitted for recording.
In the event that
any such Assignment is lost or returned unrecorded because of a defect
therein,
the Seller shall promptly have a substitute Assignment of Mortgage
prepared or
have such defect cured, as the case may be, and thereafter cause
such Assignment
of Mortgage to be duly recorded. The Purchaser shall bear all
recordation costs
and expenses in connection with any subsequent Assignments of
Mortgage.
(c)
With respect to any MERS Designated Mortgage Loan, the Seller agrees
that on or prior to each Closing Date it will cause,
at its own
expense, the
MERS System to indicate that the related Mortgage Loans have been assigned by
the Seller to the Purchaser in accordance with this Agreement by
entering in the
MERS System
the information required by the MERS System to identify the
Purchaser as owner of such Mortgage Loans.
(d)
If pursuant
to the foregoing provisions the Seller repurchases a
Mortgage Loan that is a MERS Designated Mortgage Loan, the Seller shall
either
(i) cause MERS to execute and deliver an Assignment of Mortgage in recordable
form to transfer
the Mortgage from MERS to the Seller
and shall cause such
Mortgage to be removed from registration on the MERS system in accordance
with
MERS' rules and
regulations or (ii)
cause MERS to designate on the MERS System
the Seller or its designee as the beneficial holder of such
Mortgage Loan.
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<PAGE>
(e)
The Custodian shall be
required to certify its receipt of the Mortgage
Loan Documents
required to be
delivered pursuant to
the Custodial
Agreement
prior to the related Closing Date, as evidenced by the initial
certification of
the Custodian in the
form annexed to the
Custodial Agreement.
The Purchaser
shall be responsible
for the initial
and on-going fees and expenses of the
Custodian.
Section 2.04. Closing
Conditions.
------------------
(a)
The closing for the
purchase and sale of
each Mortgage
Loan Package
shall take place on the respective Closing Date. The closing shall be
either by
telephone, confirmed
by letter or wire as the parties shall agree, or conducted
in person, at such place as the parties may agree.
(b)
The closing for each
Mortgage Loan Package shall be subject to the
satisfaction of each of the following conditions precedent:
(i) with respect to the Purchaser's obligations to close:
(A) the Seller
shall have
delivered to the Purchaser and the
Custodian the related
Mortgage Loan Schedule and an electronic data file
containing information on a loan-level basis;
(B) all of the representations and warranties of the Seller
under
this Agreement
shall be true and
correct as of the
related Closing Date
(or,
with respect
to Section 3.03, such other date specified therein) in all
material respects;
(C) the Purchaser
shall have
received from the Custodian an
initial certification with respect to its receipt of the Mortgage
Loan Documents
for the related Mortgage Loans;
(D) the Purchaser shall have received true executed copies of
the
related Memorandum
of Sale, the related Purchase Price and Terms Letter
setting forth the Purchase Price(s), and the accrued interest thereon,
for the
Mortgage Loan
Package, in each case executed on behalf of the
Seller;
(E) all other terms and conditions of this Agreement, the
related
Memorandum of
Sale and the related Purchase Price and Terms Letter
to be
satisfied by
the Seller shall have been complied with in all material
respects; and
(ii) with respect to the Seller's obligations to close:
(A) the Seller shall have received a copy of the initial
certification of the
Custodian with respect to its receipt of the Mortgage
Loan Documents for the related Mortgage Loans;
(B) the Seller has received true executed copies of the related
Memorandum of
Sale, the related Purchase Price and Terms Letter setting
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<PAGE>
forth the Purchase Price(s), and accrued interest thereon, for the
Mortgage Loan
Package, in each case
executed on behalf of
the Purchaser;
(C) all terms and
conditions
of this Agreement, the related
Memorandum of
Sale and the related Purchase Price and Terms Letter
to be
satisfied by the
Purchaser shall have
been materially
complied with; and
(D) upon satisfaction
of the foregoing
conditions
(A) through
(C), payment
by the Purchaser to the Seller of the Purchase Price for the
related Mortgage Loan Package.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01. Seller
Representations and Warranties.
-------------------------------------
The
Seller hereby represents and warrants to the Purchasers that, as of
the
related Closing Date:
(a)
Due Organization
and Authority. The Seller is a corporation duly
organized, validly
existing and in good standing under the laws of the State of
Delaware, and has all
licenses necessary to
carry on its business as now being
conducted and is licensed, qualified and in good standing in
each state where a
Mortgaged Property is
located if the laws of such state require licensing or
qualification in order
to conduct business of the type conducted by the Seller;
the Seller has the full corporate power and authority to execute and deliver
this Agreement and to perform in accordance herewith; the execution, delivery
and performance of
this Agreement
(including all instruments of transfer to be
delivered pursuant to
this Agreement) by the Seller and the consummation of the
transactions
contemplated hereby
have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation
of the Seller;
and all requisite
corporate action has been taken by the Seller to
make this
Agreement valid and binding upon the Seller in accordance with its
terms.
(b)
Ordinary Course of Business. The consummation of the transactions
contemplated by this
Agreement are in the ordinary course of business of the
Seller.
(c)
No Conflicts. Neither the execution and delivery of this Agreement,
the
acquisition of the Mortgage Loans by the Seller, the sale of the Mortgage Loans
to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of
or compliance with the terms and conditions of this Agreement will
conflict with
or result in a breach of any of the organizational documents of the Seller, or
constitute a default or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is
subject.
(d)
Ability to Perform;
Solvency. The Seller does not believe, nor does it
have any reason
or cause to
believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent and the sale
of the
Mortgage Loans will
not cause the Seller to become insolvent. The sale of the
Mortgage Loans is not undertaken to hinder, delay or defraud any of
the Seller's
creditors.
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<PAGE>
(e)
No Litigation Pending. There is no action, suit, proceeding or
investigation pending
or to its knowledge
threatened against the Seller which,
either in any one
instance or in the
aggregate,
may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Seller,
or in any material
impairment of the right or ability of
the Seller to carry on its business substantially as now conducted, or in any
material liability on
the part of the Seller, or which would draw into question
the validity of this
Agreement or the Mortgage Loans or of any action taken
or
to be contemplated
herein, or which would be likely to impair
materially the
ability of the Seller to perform under the terms of this
Agreement.
(f)
No Consent Required.
No consent, approval,
authorization or order
of
any court or governmental agency or body is required for the
execution, delivery
and performance by the Seller of or compliance by the Seller with
this Agreement
or the sale of the
Mortgage Loans as evidenced by the consummation of the
transactions
contemplated by this
Agreement,
or if required,
such consent,
approval,
authorization or order has been obtained prior to the related
Closing
Date.
(g)
Selection Process. The Seller used no selection
procedures so as
to
affect adversely the interests of the Purchaser.
(h)
Sale Treatment. The Seller will treat the sale of the Mortgage
Loans to
the Purchaser as a sale for accounting and tax purposes.
(i)
No Brokers' Fees. The Seller has not dealt with any broker,
investment
banker, agent or
other Person that may be entitled to any commission or
compensation in the connection with the sale of the Mortgage
Loans.
Section 3.02.
Purchasers' Representations and Warranties.
------------------------------------------
Each
Purchaser hereby represents and warrants to the Seller that, as of
the
related Closing Date:
(a)
Due Organization
and Authority. The Purchaser is either a Maryland
corporation or a Maryland business trust, in each case duly
organized, validly
existing and in good
standing and each has
all licenses necessary
to carry on
its business as now
being conducted
and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the
laws of such
state require
licensing or
qualification in order
to conduct business of
the
type conducted by the
Purchaser;
each Purchaser has the
full entity power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the
execution, delivery
and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by
each
Purchaser and the consummation of the transactions contemplated
hereby have been
duly and validly
authorized; this
Agreement evidences
the valid, binding
and
enforceable obligation
of each Purchaser; and
all requisite entity
action has
been taken by each Purchaser to make this Agreement valid and binding upon such
Purchaser in accordance with its terms.
(b)
Ordinary Course of Business. The consummation of the transactions
contemplated by this
Agreement are in the
ordinary course of
business of each
Purchaser.
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<PAGE>
(c)
No Conflicts. Neither the execution and delivery of this Agreement,
the
acquisition of the Mortgage Loans by a Purchaser, the sale of the
Mortgage Loans
to a Purchaser or the transactions contemplated hereby, nor the fulfillment of
or compliance with the terms and conditions of this Agreement will
conflict with
or result in a breach of any of the organizational documents of such Purchaser,
or constitute a default or result in the violation of any law,
rule, regulation,
order, judgment or decree to which such Purchaser or its property
is subject.
(d)
Ability to Perform. No Purchaser believes, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in
this Agreement.
(e)
No Litigation Pending. There is no action, suit, proceeding or
investigation pending
or to its knowledge
threatened
against any Purchaser
which, either
in any one
instance or in the aggregate, may result in any
material adverse
change in the business, operations, financial condition,
properties or assets
of such Purchaser,
or in any material
impairment of the
right or ability of such Purchaser to carry on its business
substantially as now
conducted, or in any
material liability on the part of such Purchaser, or which
would draw into question the validity of this Agreement or the
Mortgage Loans or
of any action taken or to be contemplated herein, or which would be likely to
impair materially
the ability of such
Purchaser to perform
under the terms of
this Agreement.
(f)
No Consent Required.
No consent, approval,
authorization or order
of
any court or governmental agency or body is required for the
execution, delivery
and performance
by the Purchaser of or
compliance by the
Purchaser with
this
Agreement or the sale of the Mortgage Loans as evidenced by the
consummation of
the transactions
contemplated by this Agreement, or if required, such consent,
approval,
authorization or order has been obtained prior to the related
Closing
Date.
(g)
No Brokers' Fees. No
Purchaser has dealt
with any broker,
investment
banker, agent or
other Person that may be entitled to any commission or
compensation in the connection with the sale of the Mortgage
Loans.
Section 3.03.
Representations and Warranties Regarding Individual Mortgage
------------------------------------------------------------
Loans.
------
As
to each Mortgage Loan, the Seller hereby represents and warrants to the
Purchaser that as of
the related Closing
Date (or such other date as set forth
therein) all of the
representations and
warranties set forth
on Exhibit D are
true, complete and correct.
Section 3.04.
Repurchase.
----------
It
is understood and
agreed that the
representations and
warranties set
forth or referred to
in Sections
3.01 and 3.03 shall
survive the sale of
the
Mortgage Loans to the
Purchaser and the delivery of the Mortgage Loan Documents
to the Custodian and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or
Assignment of Mortgage
or the examination
or failure to examine
any Mortgage
File. Upon
discovery by either
the Seller or the Purchaser of (a) any Mortgage
Loan Document that is materially defective or missing six months
following the
Closing Date (other than the missing original documents that are being
recorded
and have not yet been returned from the recording office)
("Defective Document")
or (b) a breach
of any of the
representations
and warranties set forth in
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<PAGE>
Sections 3.01
or 3.03 (without regard to any knowledge qualifier) that
materially and adversely affects the value of a Mortgage Loan or
the interest of
the Purchaser (or that
materially
and adversely
affects the interests
of the
Purchaser in the
related Mortgage Loan in the case of a representation and
warranty relating
to a particular Mortgage Loan) (a "Breach"), the party
discovering such
breach shall give
prompt written notice to the other. Any
breach of paragraph (nn), (xx) or (ccc) of Exhibit D shall be deemed to
materially and adversely affect the interests of the Purchaser.
Within 60 days after the earlier of either discovery by or notice to the
Seller of any Defective Document or Breach, the Seller shall use its
commercially reasonable best efforts promptly to cure such
Defective Document or
Breach in all material respects and, if such Defective Document or
Breach cannot
be cured, the Seller shall, at the Purchaser's option, repurchase such Mortgage
Loan at the Repurchase
Price. In the event that a Breach
shall involve any
representation or
warranty set forth in Section 3.01, and such Breach cannot be
cured within 60 days
of the earlier
of either discovery by or notice to the
Seller of such Breach,
all of the Mortgage
Loans in the Mortgage
Loan Package
for which such
representation or
warranty was given,
to the extent each
such
Mortgage Loan is materially affected by such Breach,
shall, at the
Purchaser's
option, be repurchased by the Seller at the Repurchase Price.
Any
repurchase
of a Mortgage Loan or Loans pursuant to the foregoing
provisions of this Section 3.03 shall occur on a date mutually
acceptable to the
Purchaser and the
Seller and within the 30 days following the end of the cure
period and shall be accomplished by wire transfer of immediately
available funds
or a deposit in the Custodial Account of the amount of the
Repurchase Price for
distribution to the
Purchaser on the next
scheduled Remittance Date, after
deducting therefrom any amount received in respect of such
repurchased
Mortgage
Loan or Loans and being held in the Custodial Account for future
distribution.
At
the time of
repurchase, the
Purchaser and the Seller shall arrange for
the reassignment of
the Deleted Mortgage Loan to the Seller and the delivery to
the Seller of any
documents held by the Custodian relating to the Deleted
Mortgage Loan. Upon
such repurchase the
Mortgage Loan Schedule shall be deemed
amended to reflect the
withdrawal of the
repurchased
Mortgage Loan from
this
Agreement.
In
addition to such repurchase obligation, the Seller shall indemnify
(from
its own funds
and not from the Custodial Account or Escrow Account) the
Purchaser and hold it
harmless against any Losses resulting from any claim,
demand, defense or
assertion resulting from a Breach of the representations and
warranties of the Seller contained in this Agreement; provided, however, that
such indemnification
shall not include
punitive,
consequential,
exemplary or
special damages. It is
understood and agreed that the obligations of the Seller
set forth in this Section 3.04 to cure or repurchase a defective
Mortgage Loan
and to indemnify the Purchaser as provided in this Section 3.04
constitute
the
sole remedies of the Purchaser respecting a breach of its
representations
and
warranties.
Section 3.05.
Repurchase of Mortgage Loans With First Payment Defaults.
--------------------------------------------------------
Except as set forth in a Purchase Price and Terms Letter, if the related
Mortgagor is 30 days or more delinquent with respect to a
Monthly Payment under
a Mortgage Loan at any time prior to the expiration of the Holding Period for
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such Mortgage Loan, the Seller shall, at the Purchaser's option exercised no
later then 90 days after the end of the related Holding Period,
repurchase such
Loan from the Purchaser in accordance with Section 3.03 hereof;
provided, that
the Seller shall not
be required to
repurchase such
Mortgage Loan if it can
demonstrate to the Purchaser's reasonable satisfaction within 30 days of such
reported delinquency
that the related Mortgagor timely made all payments
required of the
Mortgagor but such
payment was otherwise
misapplied.
In the
event a Mortgagor
exercises any right of rescission it may have with respect to
the related Mortgage Loan that arises as a result of an act or
omission prior to
the related Closing Date, the Seller shall repurchase such Mortgage Loan at
the
related Repurchase
Price within 30 days of receiving notice of such Mortgagor's
intention to rescind the Mortgage Loan.
Section 3.06. Purchase
Price Protection.
-------------------------
Except as set forth in a Purchase Price and Terms Letter,
with respect to
any Mortgage Loan that
prepays in full at any time prior to the date that is 60
days after the Closing Date for such Mortgage Loan, the Seller shall reimburse
the Purchaser, within
30 days following the prepayment in full of such Mortgage
Loan, the amount (if any) by which the portion of the Purchase
Price paid by the
Purchaser to the Seller for such Mortgage Loan exceeded 100% of the
outstanding
Stated Principal Balance of the Mortgage Loan as of the related
Cut-off Date.
Section 3.07. Review
of Mortgage Loans.
------------------------
(a)
Prior to the related
Closing Date, the Purchaser shall have the right
at its own expense to review the Mortgage Files and obtain BPOs on
the Mortgaged
Properties relating to the Mortgage Loans purchased on the related
Closing Date,
with the results of such BPO reviews to be communicated to the Seller at least
ten Business Days prior to the related Closing Date. In addition,
the Purchaser
shall have the right to reject any Mortgage Loan which in the
Purchaser's
sole
reasonable
determination (i)
fails to conform to the applicable Underwriting
Guidelines (unless
the Mortgage Loan has been underwritten to provide for
compensating factors)
or (ii) the value of the Mortgaged Property pursuant to
any BPO is 15% lower than the lesser of (A) the Appraised Value of
the Mortgaged
Property or (B) the purchase price of the Mortgaged
Property as of the
date of
origination of the
related Mortgage
Loan. The Seller shall
make available all
files required by the
Purchaser in order to complete its review, including all
CRA/HMDA required data
fields. Any review
performed by the
Purchaser prior to
the related Closing Date shall not limit the Purchaser's
rights or the
Seller's
obligations under this section.
(b)
If post-closing
due diligence
review is permitted
under the related
Purchase Price and Terms Letter, from the related Closing Date
until the date 30
days after the related
Closing Date, the Purchaser shall have the right to
review the Mortgage Files and obtain BPOs on the Mortgaged
Properties
relating
to the Mortgage Loans purchased on the related Closing Date, with
the results of
such BPO reviews
to be communicated to the Seller for a period up to
30 days
after the related Closing Date. In addition, the Purchaser shall have the
right
to reject any Mortgage Loan which in the Purchaser's sole reasonable
determination (i)
fails to conform to the applicable Underwriting Guidelines
(unless the Mortgage
Loan has been
underwritten
to provide for
compensating
factors) or (ii) the value of the Mortgaged Property pursuant to any BPO is
15%
lower than the lesser of (A) the Appraised Value of the Mortgaged Property or
(B) the purchase price
of the Mortgaged
Property as of the date of origination
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of the related
Mortgage Loan.
In the event that the
Purchaser so rejects
any
Mortgage Loan, the
Seller shall
repurchase the
rejected Mortgage Loan
at the
repurchase price as
set forth in the related Purchase Price and Terms Letter
upon receipt of notice
from the Purchaser of
the rejection
of such Mortgage
Loan. Any rejected Mortgage Loan shall be removed from the terms of this
Agreement. The Seller
shall make available
all files required by the Purchaser
in order to complete its review, including all CRA/HMDA required data fields.
Any review performed
by the Purchaser prior
to the related Closing
Date shall
not limit the Purchaser's rights or the Seller's obligations under
this section.
ARTICLE IV
SELLER TO COOPERATE
Section 4.01. Actions
of Servicer.
-------------------
The
parties agree that the performance of the Servicer of any of the
Seller's obligations
hereunder shall be deemed to be the
performance
by the
Seller.
Section 4.02.
Cooperation.
-----------
The
Seller and the
Purchaser shall cooperate fully with each other and
their respective
counsel and other
representatives and
advisors in connection
with the steps
required to be taken as part of their
respective
obligations
under this Agreement.
ARTICLE V
THE SELLER
Section 5.01.
Indemnification; Third Party Claims.
-----------------------------------
The
Seller shall indemnify each Purchaser and hold it harmless
against any
and all Losses that any Purchaser may sustain resulting from or arising out of
the negligence, bad faith or willful misconduct of the Seller in
the performance
of its duties under this Agreement.
The
Purchasers, jointly
and severally, shall indemnify the Seller and hold
it harmless against
any and all Losses
that the Seller may
sustain resulting
from or arising out the Mortgage Loans or this Agreement, including any Breach
by the Purchaser.
The
Seller shall notify the Purchasers if a claim is made by a
third party
with respect to this
Agreement or the
Mortgage Loans,
assume (with the
prior
written consent
of the Purchaser) the defense of any such claim and pay
all
expenses in connection
therewith, including
counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered
against it or
any Purchaser
in respect of such
claim. The Seller
shall fo
