ANY LIEN, ENCUMBRANCE OR IMPEDIMENT TO TRANSFER (INCLUDING ANY "ADVERSE
CLAIM" AS DEFINED IN SECTION 8-102(A)(L) OF THE UCC), AND SELLER IS THE RECORD
AND BENEFICIAL OWNER OF AND HAS GOOD AND MARKETABLE TITLE TO AND THE RIGHT TO
SELL AND TRANSFER SUCH PURCHASED LOANS TO BUYER AND, UPON TRANSFER OF SUCH
PURCHASED LOANS TO BUYER, BUYER SHALL BE THE OWNER OF SUCH PURCHASED LOANS FREE
OF ANY ADVERSE CLAIM (OTHER THAN ANY ADVERSE CLAIMS OR LIENS CREATED BY BUYER).
IN THE EVENT THE RELATED TRANSACTION IS RECHARACTERIZED AS A SECURED FINANCING
OF THE PURCHASED LOANS, THE PROVISIONS OF THIS AGREEMENT ARE EFFECTIVE TO CREATE
IN FAVOR OF BUYER A VALID SECURITY INTEREST IN ALL RIGHTS, TITLE AND INTEREST OF
SELLER IN, TO AND UNDER THE PURCHASED LOANS AND BUYER SHALL HAVE A VALID,
PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE PURCHASED LOANS.
(VII)
NO DEFAULT. NO DEFAULT OR EVENT OF DEFAULT EXISTS UNDER OR WITH
RESPECT TO THE TRANSACTION DOCUMENTS.
(VIII)
REPRESENTATIONS AND WARRANTIES REGARDING PURCHASED LOANS; DELIVERY
OF PURCHASED LOAN FILE. SELLER REPRESENTS AND WARRANTS TO BUYER THAT EACH
PURCHASED LOAN SOLD HEREUNDER AND EACH POOL OF PURCHASED LOANS SOLD IN A
31
TRANSACTION HEREUNDER, AS OF EACH PURCHASE DATE FOR A TRANSACTION CONFORM TO THE
APPLICABLE REPRESENTATIONS AND WARRANTIES SET FORTH IN EXHIBIT VI OR EXHIBIT VII
ATTACHED HERETO, EXCEPT AS DISCLOSED TO BUYER IN WRITING PRIOR TO THE RELATED
PURCHASE DATE FOR THE TRANSACTION IN WHICH SUCH PURCHASED LOAN IS PURCHASED BY
BUYER; PROVIDED, HOWEVER, THAT SELLER DOES NOT MAKE THE REPRESENTATIONS AND
WARRANTIES SET FORTH IN EXHIBIT VI OR EXHIBIT VII WITH RESPECT TO ANY PURCHASED
LOAN ORIGINATED BY BUYER OR ANY OF ITS AFFILIATES. IT IS UNDERSTOOD AND AGREED
THAT THE REPRESENTATIONS AND WARRANTIES SET FORTH IN EXHIBIT VI OR EXHIBIT VII
HERETO, IF ANY, SHALL SURVIVE DELIVERY OF THE RESPECTIVE PURCHASED LOAN FILE TO
BUYER OR ITS DESIGNEE (INCLUDING THE CUSTODIAN). WITH RESPECT TO EACH PURCHASED
LOAN, THE MORTGAGE NOTE OR MEZZANINE NOTE, THE MORTGAGE (IF ANY), THE ASSIGNMENT
OF MORTGAGE (IF ANY) AND ANY OTHER DOCUMENTS REQUIRED TO BE DELIVERED UNDER THIS
AGREEMENT AND THE CUSTODIAL AGREEMENT FOR SUCH PURCHASED LOAN HAVE BEEN
DELIVERED TO BUYER OR THE CUSTODIAN ON ITS BEHALF. SELLER OR ITS DESIGNEE IS IN
POSSESSION OF A COMPLETE, TRUE AND ACCURATE PURCHASED LOAN FILE WITH RESPECT TO
EACH PURCHASED LOAN, EXCEPT FOR SUCH DOCUMENTS THE ORIGINALS OF WHICH HAVE BEEN
DELIVERED TO THE CUSTODIAN. ANY PROVISION HEREOF TO THE CONTRARY
NOTWITHSTANDING, BUYER'S REMEDY FOR A BREACH OF THIS REPRESENTATION AND WARRANTY
WITH RESPECT TO ANY PURCHASED LOAN SHALL BE TO MARK SUCH PURCHASED LOAN TO
MARKET; PROVIDED, HOWEVER, THAT IN THE EVENT THAT A BREACH OF THIS
REPRESENTATION AND WARRANTY CAUSES A BREACH OF SOME OTHER COVENANT OF SELLER
HEREUNDER (SUCH AS TO MAINTAIN ADEQUATE MARGIN), THEN BUYER SHALL BE ENTITLED TO
EXERCISE ALL RIGHTS AND REMEDIES GRANTED TO IT HEREUNDER.
(IX)
ADEQUATE CAPITALIZATION:
NO FRAUDULENT TRANSFER. EACH SELLER
HAS, AS OF SUCH PURCHASE DATE, ADEQUATE CAPITAL