EXECUTION
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LEHMAN BROTHERS HOLDINGS INC.,
SELLER
and
STRUCTURED ASSET SECURITIES CORPORATION,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
Dated as of August 1, 2000
Amortizing Residential Collateral Trust
(Mortgage Pass-Through Certificates Series 2000-BC3)
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TABLE OF CONTENTS
Page
ARTICLE I.
CONVEYANCE OF MORTGAGE LOANS
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Section 1.01. Sale of Mortgage Loans..........................................................................5
Section 1.02. Delivery of Documents...........................................................................5
Section 1.03. Review of Documentation.........................................................................6
Section 1.04. Representations and Warranties of the Seller....................................................6
Section 1.05. Grant Clause...................................................................................15
Section 1.06. Assignment by Depositor........................................................................15
ARTICLE II.
MISCELLANEOUS PROVISIONS
Section 2.01. Binding Nature of Agreement; Assignment........................................................15
Section 2.02. Entire Agreement...............................................................................16
Section 2.03. Amendment......................................................................................16
Section 2.04. Governing Law..................................................................................16
Section 2.05. Severability of Provisions.....................................................................17
Section 2.06. Indulgences; No Waivers........................................................................17
Section 2.07. Headings Not to Affect Interpretation..........................................................17
Section 2.08. Benefits of Agreement..........................................................................17
Section 2.09. Counterparts...................................................................................17
SCHEDULES
SCHEDULE A Mortgage Loan Schedule
EXHIBIT A Underwriting Criteria of each Transferor
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This MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT, dated as of August 1,
2000 (the "Agreement"), is executed by and between Lehman Brothers Holdings
Inc. ("LBH" or the "Seller") and Structured Asset Securities Corporation (the
"Depositor").
All capitalized terms not defined herein shall have the same meanings
assigned to such terms in that certain Trust Agreement (the "Trust
Agreement"), dated as of August 1, 2000, among the Depositor, Wells Fargo Bank
Minnesota, National Association, as master servicer (the "Master Servicer"),
First Union National Bank, a national banking association, as trustee (the
"Trustee"), and the Federal Home Loan Mortgage Corporation, as guarantor (the
"Guarantor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the following specified mortgage loan purchase and
warranties, seller's warranties and servicing or assignment agreements (each a
"Transfer Agreement," and together the "Transfer Agreements"), Lehman Capital,
a division of Lehman Brothers Holdings Inc. ("Lehman Capital"), or Lehman
Brothers Bank, FSB, an affiliate of the Seller (the "Bank"), has purchased
from various mortgage originators or their correspondents (each a "Transferor"
and collectively, the "Transferors"), certain conventional, first and second
lien, adjustable and fixed rate, fully amortizing and balloon, residential
mortgage loans identified on the Mortgage Loan Schedule attached hereto as
Schedule A (collectively, the "Mortgage Loans"):
I. Lehman Capital, as purchaser:
a. Mortgage Loan Purchase and Warranties Agreement, dated as of
February 1, 1998, between Lehman Capital, as Purchaser, and
Union Planters Bank, N.A., as Seller (for FHA Insured and VA
Guaranteed, Adjustable Rate, Residential Mortgage Loans);
b. Purchase and Warranties Agreement, dated and effective as of
April 1, 1998, between Lehman Capital, as Purchaser, and Long
Beach Mortgage Company, as Seller (for Fixed and Adjustable
Rate Mortgage Loans - Flow Delivery Program (Wholesale));
c. Mortgage Loan Purchase and Warranties Agreement, dated as of
April 1, 1998, between Lehman Capital, as Purchaser, and
Ameriquest Mortgage Company, as Seller (for Conventional
Adjustable and Fixed Rate Residential Mortgage Loans);
d. Master Mortgage Loan Purchase Agreement, dated as of March 16,
1998, between DLJ Mortgage Capital, Inc. and BNC Mortgage, Inc.
(for Fixed and Adjustable Rate Mortgage Loans), including:
(i) Assignment, Assumption, and Recognition Agreement, dated
August 28, 1998, among Lehman Capital, BNC Mortgage,
Inc., DLJ Mortgage Capital, Inc., and Option One
Mortgage Corporation.
(ii) Assignment, Assumption, and Recognition Agreement, dated
October 2, 1998, among Lehman Capital, BNC Mortgage,
Inc., DLJ Mortgage Capital, Inc., and Option One
Mortgage Corporation.
(iii) Assignment, Assumption, and Recognition Agreement, dated
October 28, 1998, among Lehman Capital, BNC Mortgage,
Inc., DLJ Mortgage Capital, Inc., and Option One
Mortgage Corporation;
e. Mortgage Loan Purchase and Warranties Agreement, dated as of
June 1, 1999, between Lehman Capital, as Purchaser, and
Fieldstone Mortgage Company, as Seller (for Conventional, Fixed
and Adjustable Rate, Residential Mortgage Loans);
f. Mortgage Loan Purchase and Warranties Agreement, dated as of
June 1, 1999, between Lehman Capital, as Purchaser, and Chase
Bank of Texas, National Association, as Seller (for Residential
Fixed and Adjustable Rate First and Second Lien Mortgage
Loans);
g. Flow Mortgage Loan Purchase and Warranties Agreement, dated as
of June 30, 1999, between Lehman Capital, as Purchaser, and
Finamco, LLC, as Seller (for Conventional Fixed and Adjustable
Rate, Residential Mortgage Loans);
h. Mortgage Loan Purchase and Warranties Agreement, dated as of
September 27, 1999, between Lehman Capital, as Purchaser, and
Ameriquest Mortgage Company, as Seller (for Conventional
Adjustable Rate Residential Mortgage Loans); and
i. Mortgage Loan Purchase and Warranties Agreement, dated as of
March 1, 2000, between Lehman Capital, as Purchaser, and
Fieldstone Mortgage Company, as Seller (for Conventional, Fixed
and Adjustable Rate, Residential Mortgage Loans).
II. Bank, as purchaser:
a. Purchase and Warranties Agreement, dated as of September 8,
1999, between Bank, as Purchaser, and BNC Mortgage, Inc., as
Seller (for Adjustable Rate Mortgage Loans);
b. Mortgage Loan Purchase and Warranties Agreement, dated as of
October 1, 1999, between Bank, as Purchaser, and Fieldstone
Mortgage Company, as Seller (for Conventional, Fixed and
Adjustable Rate, Residential Mortgage Loans);
c. Purchase and Warranties Agreement, dated as of October 13,
1999, between Bank, as Purchaser, and BNC Mortgage, Inc., as
Seller (for Adjustable Rate Mortgage Loans);
d. Purchase and Warranties Agreement, dated and effective as of
October 26, 1999, between Bank, as Purchaser, and Long Beach
Mortgage Company, as Seller (for Fixed and Adjustable Rate
Mortgage Loans - Flow Delivery Program);
e. Mortgage Loan Purchase and Warranties Agreement, dated as of
December 1, 1999, between Bank, as Purchaser, and Fremont
Investment & Loan Association, as Seller (for Conventional,
Fixed and Adjustable Rate, Residential Mortgage Loans);
f. Mortgage Loan Purchase and Warranties Agreement, dated as of
December 15, 1999, between Bank, as Purchaser, and Ameriquest
Mortgage Company, as Seller (for Conventional Adjustable Rate
Residential Mortgage Loans);
g. Mortgage Loan Purchase and Warranties Agreement, dated as of
December 31, 1999, between Bank, as Purchaser, and The
Provident Bank, as Seller (for Conventional Fixed and
Adjustable Rate, Residential Mortgage Loans);
h. Purchase and Warranties Agreement, dated as of February 17,
2000, between Bank, as Purchaser, and BNC Mortgage, Inc., as
Seller (for Adjustable Rate Mortgage Loans);
i. Flow Purchase and Warranties Agreement, dated as of March 10,
2000, between Bank, as Purchaser, and BNC Mortgage, Inc. as
Seller (for Fixed and Adjustable Rate Mortgage Loans).
WHEREAS, pursuant to the following assignment and assumption agreements,
Bank has assigned all of its rights, title and interest in and to the
foregoing Transfer Agreements listed in II(a) through (i), including the
Mortgage Loans acquired by Bank thereunder, to the Seller:
a. Assignment and Assumption Agreements, each dated as of
September 8 2000, and effective as of August 1, 2000, between
Bank, as assignor, and the Seller, as assignee, with respect to
each Transfer Agreement entered into by Bank listed in II (a)
through (i) above.
WHEREAS, the Seller is a party to the following servicing agreements
(collectively, the "Reconstituted Servicing Agreements") pursuant to which the
Mortgage Loans are to be serviced by the various Servicers:
1. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Option One Mortgage Corporation, as servicer,
for certain Mortgage Loans originated by Ameriquest Mortgage
Company, BNC Mortgage, Inc., Long Beach Mortgage Company, Fremont
Investment & Loan Association and Option One Mortgage Corporation;
2. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Option One Mortgage Corporation, as servicer,
for certain Mortgage Loans originated by Option One Mortgage
Corporation;
3. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Wells Fargo Home Mortgage, Inc., as servicer,
for certain Mortgage Loans originated by Wells Fargo Home Mortgage,
Inc.;
4. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Ocwen Federal Bank FSB, for certain Mortgage
Loans originated by Ameriquest Mortgage Company, MCA Financial
Corporation, Fieldstone Mortgage Company, and Finance America, LLC;
5. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Long Beach Mortgage Company, as servicer, for
certain Mortgage Loans originated by Long Beach Mortgage Company;
6. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Ameriquest Mortgage Company, as servicer, for
certain Mortgage Loans originated by Ameriquest Mortgage Company;
7. Servicing Agreement, dated as of August 1, 2000, between the Seller
and Aurora Loan Services Inc., as servicer, for certain Mortgage
Loans originated by Ameriquest Mortgage Company, Long Beach Mortgage
Company, BNC Mortgage, Inc., The Provident Bank, Union Planters
Bank, N.A., Fieldstone Mortgage Company, Aurora Loan Services Inc.
and other originators;
8. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Life Bank, as servicer, for certain Mortgage
Loans originated by Life Bank; and
9. Reconstituted Servicing Agreement, dated as of August 1, 2000,
between the Seller and Homeside Lending, Inc., as servicer, for
certain Mortgage Loans originated by Homeside Lending, Inc.
WHEREAS, the Seller desires to sell, without recourse, all of its right,
title and interest in and to the Mortgage Loans to the Depositor and to assign
all of its rights and interest under the Transfer Agreements and Reconstituted
Servicing Agreements relating to the Mortgage Loans to the Depositor.
WHEREAS, the Seller and the Depositor acknowledge and agree that the
Depositor will convey the Mortgage Loans to a Trust Fund created pursuant to
the Trust Agreement, assign all of its rights and delegate all of its
obligations hereunder to the Trustee for the benefit of the Certificateholders
and the Guarantor, and that each reference herein to the Depositor is
intended, unless otherwise specified, to mean the Depositor or the Trustee, as
assignee, whichever is the owner of the Mortgage Loans from time to time.
WHEREAS, the Seller and the Depositor desire that the Guarantor be an
intended third-party beneficiary to this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Seller and the Depositor agree as
follows:
ARTICLE I.
CONVEYANCE OF MORTGAGE LOANS
Section 1.01. Sale of Mortgage Loans. Concurrently with the execution and
delivery of this Agreement, the Seller does hereby transfer, assign, set over,
deposit with and otherwise convey to the Depositor, without recourse, subject
to Sections 1.03 and 1.04, all the right, title and interest of the Seller in
and to the Mortgage Loans identified on Schedule A hereto, having an aggregate
Scheduled Principal Balance as of the Cut-off Date of $2,921,818,509.24. Such
conveyance includes, without limitation, the right to all distributions of
principal and interest received on or with respect to the Mortgage Loans on or
after the Cut-off Date (other than payments of principal and interest due on
or before such date), and all such payments due after such date but received
prior to such date and intended by the related Mortgagors to be applied after
such date, together with all of the Seller's right, title and interest in and
to each related account and all amounts from time to time credited to and the
proceeds of such account, any REO Property and the proceeds thereof, the
Seller's rights under any Insurance Policies relating to the Mortgage Loans,
and the Seller's security interest in any collateral pledged to secure the
Mortgage Loans, including the Mortgaged Properties.
Concurrently with the execution and delivery of this Agreement, the
Seller hereby assigns to the Depositor all of its rights and interest under
each Transfer Agreement and each Reconstituted Servicing Agreement, and
delegates to the Depositor all of its obligations thereunder, to the extent
relating to the Mortgage Loans. Concurrently with the execution hereof, the
Depositor tenders the purchase price of $2,921,818,509.24. The Depositor
hereby accepts such assignment and delegation, and shall be entitled to
exercise all the rights of the Seller under each Transfer Agreement and each
Reconstituted Servicing Agreement, as if the Depositor had been a party to
each such agreement.
Section 1.02. Delivery of Documents. (a) In connection with such transfer
and assignment of the Mortgage Loans hereunder, the Seller does hereby
deliver, or cause to be delivered, to the Depositor (or its designee) the
documents or instruments with respect to each Mortgage Loan (each a "Mortgage
File") so transferred and assigned, as specified in the related Transfer
Agreements or Reconstituted Servicing Agreements.
(b) For Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Seller, in lieu of delivering
the related Mortgage Files, herewith delivers to the Depositor an Officer's
Certificate which shall include a statement to the effect that all amounts
received in connection with such prepayment that are required to be deposited
in the Collection Account maintained by the Master Servicer for such purpose
have been so deposited.
Section 1.03. Review of Documentation. The Depositor, by execution and
delivery hereof, acknowledges receipt of the Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof
by The Chase Manhattan Bank, as successor by merger to Chase Bank of Texas,
National Association, U.S. Bank Trust National Association, Bankers Trust
Company of California, N.A., LaSalle Bank and Wells Fargo Bank Minnesota,
National Association (each, a "Custodian" and, collectively, the "Custodians")
for the Depositor. Each Custodian is required to review, within 45 days
following the Closing Date, each applicable Mortgage File. If in the course of
such review the related Custodian discovers any document or documents
constituting a part of a Mortgage File that is missing, does not appear
regular on its face (i.e., is mutilated, damaged, defaced, torn or otherwise
physically altered) or appears to be unrelated to the Mortgage Loans
identified in the Mortgage Loan Schedule (each a "Material Defect"), the
Seller shall be obligated to cure such Material Defect or to repurchase the
related Mortgage Loan from the Depositor (or, at the direction of and on
behalf of the Depositor, from the Trust Fund), or to substitute a Qualifying
Substitute Mortgage Loan therefor, in each case to the same extent and in the
same manner as the Depositor is obligated to the Trustee and the Trust Fund
under the Trust Agreement.
Section 1.04. Representations and Warranties of the Seller. (a) The
Seller hereby represents and warrants to the Depositor that as of the date
hereof that:
(i) the Seller is a corporation duly organized, validly existing and
in good standing under the laws governing its creation and existence and
has full corporate power and authority to own its property, to carry on
its business as presently conducted, and to enter into and perform its
obligations under this Agreement;
(ii) the execution and delivery by the Seller of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Seller; neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with
the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Seller or its properties or the certificate of incorporation or bylaws of
the Seller;
(iii) the execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except such as
has been obtained, given, effected or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the
Depositor, constitutes a valid and binding obligation of the Seller
enforceable against it in accordance with its terms except as such
enforceability may be subject to (A) applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of
creditors generally and (B) general principles of equity regardless of
whether such enforcement is considered in a proceeding in equity or at
law; and
(v) there are no actions, suits or proceedings pending or, to the
knowledge of the Seller, threatened or likely to be asserted against or
affecting the Seller, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Seller will be determined
adversely to the Seller and will if determined adversely to the Seller
materially and adversely affect it or its business, assets, operations or
condition, financial or otherwise, or adversely affect its ability to
perform its obligations under this Agreement.
(b) The representations and warranties with respect to the Mortgage Loans
made by each Transferor to the Seller in the related Transfer Agreement were
made as of the date of such Transfer Agreement. To the extent that any fact,
condition or event with respect to a Mortgage Loan constitutes a breach of a
representation or warranty made under the applicable Transfer Agreement, the
Depositor shall have the right to require that the Seller cure such breach or
effect such other remedy as is specified in the last paragraph of subsection
(e).
(c) The Seller further represents and warrants to the Depositor, to the
Trustee on behalf of the Certificateholders and to the Guarantor upon the
delivery of the Mortgage Loans to be included in Pool 1 to the Depositor on
the Closing Date, but solely as to each Mortgage Loan to be included in Pool
1, that:
(i) No misrepresentation of a material fact or fraud in respect of
the origination, modification or amendment of any Mortgage Loan has taken
place on the part of any person, including, without limitation, the
related Mortgagor, any appraiser, any builder or developer or any party
involved in the origination of such Mortgage Loan;
(ii) As of the Cut-off Date, no Mortgage Loan has failed to pay
principal and interest due on the June 2000 payment due date. In
addition, as of the Cut-off Date, no more than 1.58% of the Mortgage
Loans have failed to pay principal and interest due on two consecutive
payment due dates in the last 12 months (or since their origination, if
less than 12 months) and no more than 0.20% of the Mortgage Loans have
failed to pay principal and interest on two consecutive due dates more
than once in the last 12 months (or since their origination, if less than
12 months). To the best of the Seller's knowledge, as of the Closing
Date, no more than 7.16% of the Mortgage Loans have failed to pay
principal and interest on the August 1, 2000 due date.
(iii) Each Mortgage Loan, as of the Closing Date, is either a fixed
rate or an adjustable rate, conventional, residential Mortgage Loan
having an original term to maturity from the date on which the first
Scheduled Payment is due of not more than 30 years. Each Mortgage Note
with respect to the Mortgage Loans will provide for a schedule of
substantially level and equal Scheduled Payments which are sufficient to
amortize fully the principal balance of such Mortgage Loan over a period
of time equal to the amortization period of such Mortgage Note; provided,
however, that certain fixed rate Mortgage Loans constituting
approximately 0.29% of the Cut-Off Date-Balance are "balloon" mortgage
loans that provide for a final Scheduled Payment substantially greater
than the preceding monthly payment. All such balloon loans provide for
monthly payment based upon a 30-year amortization schedule with a final
balloon payment no later than the 15th year. No more than 0.06% of the
Mortgages transferred to the Trustee are second liens on the Mortgaged
Property.
(iv) No more than 0.15%, 1.37% and 30.29% of the Mortgage Loans,
based on the aggregate Cut-Off Date Balance of the Mortgage Loans, had
Loan-to-Value Ratios at origination exceeding 95%, 90% and 80%,
respectively. No Mortgage Loans secured by a second lien had a combined
Loan-to-Value Ratio at origination exceeding 100%;
(v) Notwithstanding clause (xvi) of this Section 1.04(c), each
Mortgage Loan was originated, and the applicable seller credit grade was
applied, substantially in accordance with the related Transferor's
underwriting criteria attached hereto as Exhibit A;
(vi) No more than 2.56% of the Mortgage Loans are secured by
manufactured housing, and none of the Mortgage Loans are secured by
mobile homes;
(vii) Each Mortgage transferred to the Trustee is a valid first or
second lien on the Mortgaged Property subject only to (A) the lien of
current real property taxes and assessments, (B) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal made in connection
with the origination of the related mortgage loan, (C) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage and (D) in the case of a second lien, only to a first lien
on such Mortgaged Property.
(viii) There is no delinquent tax or assessment lien against any
Mortgaged Property;
(ix) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are or may be a lien
prior to, or equal with, the lien of such Mortgage except those which are
insured against by the title insurance policy included in the Mortgage
File maintained by the applicable Custodian with respect to the related
Mortgage Loan;
(x) Each Mortgage Loan at origination complied in all material
respects with applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby, including, without limitation, the
receipt of interest, will not involve the violation of any such laws;
(xi) None of the Mortgage Loans are cooperative share mortgages;
(xii) If the improvements securing a Mortgage Loan were in a
federally designated special flood hazard area as of the date of
origination, flood insurance in the amount described in the related
Reconstituted Servicing Agreement (and to the extent required by such
agreement) covers the related Mortgaged Property (either by coverage
under the federal flood insurance program or by coverage by private
insurers);
(xiii) A lender's policy of title insurance or a commitment (binder)
to issue the same or an attorney's certificate or opinion of title was
effective on the date of the origination of each Mortgage Loan and each
such policy or certificate or opinion of title is valid and remains in
full force and effect;
(xiv) No selection procedure reasonably believed by the Seller to be
adverse to the interests of the Certificateholders or the Guarantor, was
used in selecting the Mortgage Loans for inclusion in the Trust Fund;
provided, however, that the Mortgage Loans were selected by the Seller
from its portfolio of mortgage loans originated in accordance with the
related Transferor's underwriting criteria attached hereto as Exhibit A.
(xv) Each appraisal of a Mortgage Loan that was used to determine
the appraised value of the related Mortgaged Property was conducted
generally in accordance with the related Transferor's underwriting
guidelines and included an assessment of the fair market value of the
related Mortgaged Property at the time of the appraisal. At the time of
origination, the value of each Mortgaged Property adequately supported
the original loan amount of the related Mortgage Loan. The Mortgage File
contains an appraisal of the applicable Mortgaged Property;
(xvi) The information set forth with respect to the Mortgage Loans
on the Mortgage Loan Schedule provides an accurate listing of the
Mortgage Loans, and the information provided with respect to each
Mortgage Loan on the Mortgage Loan Schedule is true and correct in all
material respects as of the Cut-off Date or such other date respecting
which such information is given;
(xvii) Each Mortgage Loan constitutes a "qualified mortgage" within
the meaning of Section 860G(a)(3)(A) of the Code and Treasury Regulation
Section 1.860G-2(a)(1) and (3);
(xviii) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the related Mortgagor and is enforceable by the
Trustee or any co-trustee appointed pursuant to the Trust Agreement
against the Mortgagor in accordance with its terms, except only as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of creditors'
rights generally and by law, and all parties to each Mortgage Loan and
the Mortgagee had full legal capacity to execute all Mortgage Loan
documents and to convey the estate therein purported to be conveyed; and
the Mortgage and each Mortgage Note have been duly and validly executed
by such parties;
(xix) All individual insurance policies contain a standard mortgagee
clause naming the related Seller, its successors and assigns, as
mortgagee. All premiums thereon have been paid. Each Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor;
(xx) Any advances made after the date of origination of a Mortgage
Loan but prior to the Cut-Off Date have been consolidated with the
outstanding principal amount secured by the related Mortgage, and the
secured principal amount, as consolidated, bears a single interest rate
and single repayment term reflected on the Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal
amount of the related Mortgage Loan;
(xxi) There are no defaults in complying with the terms of the
Mortgage, and either (1) any taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges or ground rents which
previously became due and owing have been paid, or (2) an escrow of funds
has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and
payable. Except for payments in the nature of escrow payments, including
without limitation, taxes and insurance payments, to the best of Seller's
knowledge, the related Servicer has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required by the Mortgage Note, except for interest accruing from the date
of the Mortgage Note or date of disbursement of the Mortgage proceeds,
whichever is greater, to the day which precedes by one month the Due Date
of the first installment of principal and interest;
(xxii) No improvement located on or being part of any Mortgaged
Property is in violation of any applicable zoning law or regulation. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of each Mortgaged Property and, with
respect to the use and occupancy of the same, including but not limited
to certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities and such Mortgaged
Property is lawfully occupied under the applicable law;
(xxiii) The proceeds of each Mortgage Loan have been fully disbursed
and there is no obligation on the part of the mortgagee to make future
advances thereunder and any and all requirements as to completion of any
on-site or off-site improvements and as to disbursement of any escrow
funds therefor have been complied with. All costs, fees and expenses
incurred in making, closing or recording the Mortgage Loans were paid and
the Mortgagor is not entitled to any refund of amounts paid or due under
the Mortgage Note;
(xxiv) There is no obligation on the part of the Seller or any other
party to make payments in addition to those made by the Mortgagor;
(xxv) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature;
(xxvi) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate
remedy for the realization against the related Mortgaged Property of the
benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (B) otherwise by
judicial or non-judicial foreclosure. There is no homestead or other
exemption available to the related Mortgagor which would materially
interfere with the right to sell the Mortgaged Property at a trustee's
sale or the right to foreclose the Mortgage subject to the applicable
federal and state laws and judicial precedent with respect to bankruptcy
and rights of redemption. Upon default by a Mortgagor on a Mortgage Loan
and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant
to the proper procedures, the holder of the Mortgage Loan will be able to
deliver good and merchantable title to the property;
(xxvii) All amounts received after the Cut-Off Date with respect to
the Mortgage Loans to which the Seller is not entitled will be deposited
into the Collection Account within one Business Day after the Closing
Date;
(xxviii) The Seller has not transferred the Mortgage Loans to the
Depositor, and the Depositor has not transferred the Mortgage Loans to
the Trust Fund, with any intent to hinder, delay or defraud any of its
creditors;
(xxix) All parties which have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were): (A) organized under the laws of the state wherein the Mortgaged
Property is located, or (B) qualified to do business in such state, or
(C) federal savings and loan associations or national banks having
principal offices in such state, or (D) not doing business in such state
so as to require qualification or licensing, or (E) not otherwise
required or licensed in such state. To the best of Seller's knowledge,
all parties which have had any interest in the Mortgage Loan were in
compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located or were not
required to be licensed in such state;
(xxx) Each document or instrument in the related Mortgage File is in
a form generally acceptable to prudent mortgage lenders that regularly
originate or purchase mortgage loans comparable to the Mortgage Loans for
sale to prudent investors in the secondary market that invest in mortgage
loans such as the Mortgage Loans;
(xxxi) Each Mortgaged Property is improved by a single (one-to-four)
family residential dwelling, including, without limitation, condominiums,
townhouses and manufactured homes. Each manufactured home constituting
any portion of any Mortgaged Property constitutes real property under
applicable state law; and each manufactured home constituting any portion
of any Mortgaged Property is a "single-family residence" as defined in
Section 25(e)(10) of the Code;
(xxxii) Except with respect to liens released immediately prior to
the transfer herein contemplated, each Mortgage Note and related Mortgage
have not been assigned or pledged and immediately prior to the transfer
and assignment herein contemplated, the Seller held good, marketable and
indefeasible title to, and was the sole owner and holder of, each
Mortgage Loan subject to no liens, charges, mortgages, claims,
participation interests, equities, pledges or security interests of any
nature, encumbrances or rights of others (collectively, a "Lien"); the
Seller has full right and authority under all governmental and regulatory
bodies having jurisdiction over the Seller, subject to no interest or
participation of, or agreement with, any party, to sell and assign the
same pursuant to this Agreement; and immediately upon the transfers and
assignments herein contemplated, the Seller shall have transferred all of
its right, title and interest in and to each Mortgage Loan and the
Trustee will hold good, marketable and indefeasible title, to, and be the
sole owner of, each Mortgage Loan subject to no Liens;
(xxxiii) No Mortgage Loan is subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, nor
will the operation of any of the terms of any Mortgage Note or Mortgage,
or the exercise of any right thereunder, render either the Mortgage Note
or the Mortgage unenforceable in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury, and no such right of rescission, set-off, counterclaim
or defense has been asserted with respect thereto;
(xxxiv) The improvements upon each Mortgaged Property are covered by
a valid and existing hazard insurance policy with a generally acceptable
carrier that provides for fire and extended coverage representing
coverage described in the related Reconstituted Servicing Agreement;
(xxxv) The terms of each Mortgage Note and the Mortgage have not
been impaired, altered or modified in any material respect, except by a
written instrument which has been recorded or is in the process of being
recorded, if necessary, to protect the interests of the
Certificateholders and which has been or will be delivered to the
applicable Custodian on behalf of the Trustee;
(xxxvi) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Trustee) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors
of the Seller, or is in the process of being recorded;
(xxxvii) As of the Cut-off Date, there is no proceeding pending or
threatened for the total or partial condemnation of any Mortgaged
Property, nor is such a proceeding currently occurring, and such property
is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty, so as to affect adversely the value of
the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended;
(xxxviii) No Mortgage Loan was originated under a buydown plan;
(xxxix) Except for Mortgage Loans that are delinquent for a time
period less than that set forth in (ii) above, there is no default,
breach, violation or event of acceleration existing under any Mortgage or
the related Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration, and
neither Seller, nor, to the best of Seller's knowledge, any other entity
involved in originating or servicing a Mortgage Loan, has waived any
default, breach, violation or event of acceleration;
(xl) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 or any comparable state law;
(xli) The related Servicer for each Mortgage Loan has accurately and
fully reported its borrowers credit files to each of the credit
repositories in a timely manner;
(xlii) No proceeds from any Mortgage Loan were used to purchase
single-premium credit insurance policies as part of origination of, or as
a condition to closing, such Mortgage Loan;
(xliii) [RESERVED];
(xliv) Each Mortgage Loan was originated on or after October 1,
1983;
(xlv) The Seller represents and warrants that it currently operates
or actively participates in an on-going business (A) to originate
single-family mortgage loans and/or (B) to make periodic purchases of
mortgage loans from originators or sellers, and/or (C) to issue and/or
purchase securities or bonds supported by the mortgage loans, a portion
of which loans are made to borrowers who are:
(1) low-income families (families with incomes of 80% or less
of area median income) living in low-income areas (a census tract or
block numbering area in which the median income does not exceed 80%
of the area median income); or
(2) very low-income families (families with incomes of 60% or
less of area median income);
(xlvi) Each Mortgage contains a provision for the acceleration of
the payment of the unpaid principal balance of the related Mortgage Loan
in the event the related Mortgaged Property is sold without the prior
consent of the mortgagee(s) thereunder;
(xlvii) With respect to each Mortgage Loan secured by a manufactured
home: (A) the manufactured home is permanently affixed to a foundation
which is suitable for the soil conditions of the site; (B) all
foundations, both perimeter and interior, have footings that are located
below the frost line; (C) any wheels, axles and trailer hitches are
removed from the manufactured home; and (D) the Mortgage Loan is covered
under a standard real estate title insurance policy or attorney's title
opinion or certificate that identified the manufactured home as part of
the real property and insures or indemnifies against any loss if the
manufactured home is determined not to be part of the real property;
(xlviii) With respect to second liens, either (A) no consent for the
origination of such Mortgage Loans is required by the holder of the
related first lien or (B) such consent has been obtained and is contained
in the Mortgage File;
(xlix) No Mortgage Loan secured by a second priority lien has a
principal balance as of the applicable Cut-Off Date in excess of 50% of
Freddie Mac's loan limits for such type of residence;
(l) The Mortgage Loans backing the Group 1 Certificates do not
contain the first and/or second lien mortgage loans relating to a
single Mortgaged Property if the aggregate original principal
balance of such Mortgage Loans exceeds Freddie Mac's loan limits. To
the best of Seller's knowledge, the pool of Mortgages backing the
Group 1 Certificates will not result in a violation of Freddie Mac's
loan limitations;
(li) No Mortgage Loan has a prepayment penalty longer than five
years after its origination, and each Servicing Agreement prohibits the
related Servicer from waiving any prepayment penalty with respect to the
Mortgage Loans (except in the case of bankruptcy or default of such
Mortgage Loan), without the prior written consent of the Master Servicer;
(lii) As of May 1, 2000, no Mortgagor on any of the Mortgage Loans
has filed for bankruptcy protection;
(liii) The related Servicer has not sent a notice of default with
respect to any Mortgage Loan; and
(liv) To the best of Seller's knowledge, none of the Mortgage Loans
which were originated by Ameriquest Mortgage Company are subject to
pending litigation.
With respect to any representation in this subsection (c) that is made to
the best of Seller's knowledge or as to which Seller has no knowledge, if it
is discovered by Seller, the Master Servicer, the Guarantor, the Trustee or
the Custodian that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan then, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation and warranty being
inaccurate at the time the representation and warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
(d) The Seller further represents and warrants to the Depositor, to the
Trustee on behalf of the Certificateholders and to the Guarantor upon delivery
of such Mortgage Loans to be included in Pool 2 on the Closing Date, but
solely as to each Mortgage Loan to be included in Pool 2, the representations
and warranties set forth in subsection (c) paragraph (ii) (but substituting
"90 days" for "60" days, 9.72% for 1.58%, 2.89% for 0.20%, and 16.18% for
7.16%, in each case where such latter percentages appear therein), paragraph
(iii) (but inserting "(other than 0.09% of the Mortgage Loans)" after the
words "is due" in the third line therein, and substituting 0.37% for 0.29% and
0.00% for 0.06%, in each case where such latter percentages appear therein),
paragraph (iv) (but substituting 0.50% for 0.15%, 1.08% for 1.37%, 31.54% for
30.29%, and 102.44% for 100%, in each case where such latter percentages
appear therein), paragraph (vi) (but substituting 0.45% for 2.56%, where such
latter percentage appears therein), paragraphs (vii), (viii), (ix), (x),
paragraph (xi) (but substituting 0.000019% for the word "None"), paragraphs
(xii), (xiii), (xvi), (xvii), (xviii), (xix), (xxi), (xxvi), (xxviii),
(xxxii), (xxxiii), (xxxiv), (xxxix), paragraph (xliv) (but substituting the
date "September 12, 1978" for "October 1, 1983") and paragraphs (li), (lii)
and (liii).
(e) It is understood and agreed that the representations and warranties
set forth in subsections (c) and (d) of this Section 1.04 and the obligations
of the Seller set forth in this subsection (e) survive delivery of the
Mortgage Files and the Assignment of Mortgage of each Mortgage Loan to the
Depositor. Upon discovery by any of the Seller, the Depositor, the Guarantor
or the Trustee of a breach of any of such foregoing representations and
warranties in subsection (c) with respect to the Pool 1 Mortgage Loans or
subsection (d) with respect to the Pool 2 Mortgage Loans or of any of the
representations or warranties made in the Transfer Agreements or Reconstituted
Servicing Agreements that adversely and materially affects the value of the
related Mortgage Loan (except that any breach of the representations and
warranties set forth in Sections 1.04(c)(xl), (xli), (xlii), and (li) shall be
deemed to adversely and materially affect the value of the related Mortgage
Loan), the party discovering such breach shall give prompt written notice to
the other party. Within 90 days of the discovery of any such breach, the
Seller shall either (i) cure such breach in all material respects, (ii)
repurchase such Mortgage Loan or any property acquired in respect thereof from
the Depositor at the applicable Purchase Price or (iii) within the two-year
period following the Closing Date, substitute a Qualifying Substitute Mortgage
Loan for the affected Mortgage Loan. In the event of a breach of any of the
representations and warranties made with respect to the Mortgage Loans by the
Transferor under the Transfer Agreements or Reconstituted Servicing
Agreements, the Trustee may enforce its rights to cause a repurchase or
substitution of a defective Mortgage Loan directly against the Seller pursuant
to the immediately preceding sentence and shall not be required to first seek
redress of any remedies against the related Transferor under the related
Transfer Agreement for the benefit of Certificateholders; provided, however,
if such remedy is enforced directly against the Seller, the Seller shall be
subrogated to the rights of the Trustee under the Transfer Agreement.
Section 1.05. Grant Clause. It is intended that the conveyance of the
Seller's right, title and interest in and to Mortgage Loans and other property
conveyed pursuant to this Agreement shall constitute, and shall be construed
as, a sale of such property and not a grant of a security interest to secure a
loan. However, if such conveyance is deemed to be in respect of a loan, it is
intended that: (a) the rights and obligations of the parties shall be
established pursuant to the terms of this Agreement; (b) the Seller hereby
grants to the Depositor a first priority security interest in all of the
Seller's right, title and interest in, to and under, whether now owned or
hereafter acquired, the Mortgage Loans and other property; and (c) this
Agreement shall constitute a security agreement under applicable law.
Section 1.06. Assignment by Depositor. Concurrently with the execution of
this Agreement, the Depositor shall assign its interest under this Agreement
with respect to the Mortgage Loans to the Trustee, and the Trustee then shall
succeed to all rights of the Depositor under this Agreement. All references to
the rights of the Depositor in this Agreement shall be deemed to be for the
benefit of and exercisable by its assignee or designee, specifically including
the Trustee.
ARTICLE II.
MISCELLANEOUS PROVISIONS
Section 2.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 2.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied,
oral or written, of any nature whatsoever with respect to the subject matter
hereof. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms
hereof.
Section 2.03. Amendment. (a) This Agreement may be amended from time to
time by the Seller and the Depositor, without notice to or the consent of any
of the Certificateholders but with the consent of the Guarantor, (i) to cure
any ambiguity, (ii) to cause the provisions herein to conform to or be
consistent with or in furtherance of the statements made with respect to the
Certificates, the Trust Fund, the Trust Agreement or this Agreement in the
Information Circular; or to correct or supplement any provision herein which
may be inconsistent with any other provisions herein, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement
or (iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the REMIC
Provisions. No such amendment effected pursuant to clause (iii) of the
preceding sentence shall adversely affect in any material respect the
interests of any Certificateholder. Any such amendment shall be deemed not to
adversely affect in any material respect any Certificateholder, if the Trustee
receives written confirmation from each Rating Agency that such amendment will
not cause such Rating Agency to reduce the then current rating assigned to the
Certificates (and any Opinion of Counsel requested by the Trustee in
connection with any such amendment may rely expressly on such confirmation as
the basis therefor).
(b) This Agreement may also be amended from time to time by the Seller
and the Depositor with the consent of the Certificateholders of not less than
66-2/3% of the Class Principal Amount (or Percentage Interest) of each Class
of Certificates affected thereby for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Certificateholders;
provided, however, that no such amendment may (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which
are required to be distributed on any Certificate without the consent of the
Certificateholder of such Certificate or (ii) reduce the aforesaid percentages
of Class Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class, the Certificateholders of which are required to
consent to any such amendment without the consent of the Certificateholders of
100% of the Class Principal Amount or Class Notional Amount (or Percentage
Interest) of each Class of Certificates affected thereby.
(c) It shall not be necessary for the consent of Certificateholders under
this Section 2.03 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Section 2.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 2.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
Section 2.06. Indulgences; No Waivers. Neither the failure nor any delay
on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other
or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with
respect to any occurrence be construed as a waiver of such right, remedy,
power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have
granted such waiver.
Section 2.07. Headings Not to Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 2.08. Benefits of Agreement. The parties to this Agreement agree
that it is appropriate, in furtherance of the intent of such parties set forth
herein, that the Guarantor enjoy the full benefit of the provisions of this
Agreement as an intended third party beneficiary; provided, however, nothing
in this Agreement, express or implied, shall give to any Person, other than
the parties to this Agreement and their successors hereunder, the Trustee, the
Certificateholders and the Guarantor, any benefit or legal or equitable right,
power, remedy or claim under this Agreement.
Section 2.09. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the Seller and the Depositor have caused their names
to be signed hereto by their respective duly authorized officers as of the
date first above written.
LEHMAN BROTHERS HOLDINGS INC.,
as Seller
By: /s/ Stanley Labanowski
-----------------------------------------
Name: Stanley Labanowski
Title: Authorized Signatory
STRUCTURED ASSET SECURITIES
CORPORATION,
as Purchaser
By: /s/ Ellen Kiernan
-----------------------------------------
Name: Ellen Kiernan
Title: Vice President
ACKNOWLEDGED BY:
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Stephanie J. Purdy
-------------------------------------
Name: Stephanie J. Purdy
Title: Trust Officer
FEDERAL HOME LOAN MORTGAGE CORPORATION
as Guarantor
By: /s/ Charles W. Pearson
--------------------------------------
Name: Charles W. Pearson
Title: Director-Securities Servicing & Processing
<PAGE>
SCHEDULE A
MORTGAGE LOAN SCHEDULE
<PAGE>
EXHIBIT A
UNDERWRITING CRITERIA OF EACH TRANSFEROR
[[To be provided by Lehman Capital]]
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