QUESTIONS
40
OR CHALLENGES THE VALIDITY OR ENFORCEABILITY OF ANY OF THE PROGRAM AGREEMENTS OR
ANY ACTION TO BE TAKEN IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY,
(II) MAKES A CLAIM INDIVIDUALLY IN AN AMOUNT GREATER THAN $5,000,000 OR CLAIMS
IN AN AGGREGATE AMOUNT GREATER THAN $10,000,000 OR (III) WHICH, INDIVIDUALLY OR
IN THE AGGREGATE, IF ADVERSELY DETERMINED, COULD BE REASONABLY LIKELY TO HAVE A
MATERIAL ADVERSE EFFECT.
E.
PROHIBITION OF FUNDAMENTAL CHANGES.
NO SELLER SHALL ENTER INTO ANY
TRANSACTION OF MERGER OR CONSOLIDATION OR AMALGAMATION, OR LIQUIDATE, WIND UP OR
DISSOLVE ITSELF (OR SUFFER ANY LIQUIDATION, WINDING UP OR DISSOLUTION) OR SELL
ALL OR SUBSTANTIALLY ALL OF ITS ASSETS; PROVIDED, THAT ANY SELLER MAY MERGE OR
CONSOLIDATE WITH (A) ANY WHOLLY OWNED SUBSIDIARY OF A SELLER, OR (B) ANY OTHER
PERSON IF SUCH SELLER IS THE SURVIVING CORPORATION; AND PROVIDED FURTHER, THAT
IF AFTER GIVING EFFECT THERETO, NO DEFAULT WOULD EXIST HEREUNDER.
F.
MAINTENANCE OF PROFITABILITY.
FIC SHALL NOT PERMIT, FOR ANY TWO CONSECUTIVE
TEST PERIODS, ITS CONSOLIDATED NET INCOME FOR ANY TEST PERIOD, BEFORE INCOME
TAXES FOR SUCH TEST PERIOD, DISTRIBUTIONS MADE DURING SUCH TEST PERIOD, AND
WITHOUT REGARD TO UNREALIZED GAINS OR LOSSES FROM MARK TO MARKET VALUATIONS
RESULTING FROM SELLER'S INTEREST RATE PROTECTION AGREEMENTS DURING SUCH TEST
PERIOD, TO BE LESS THAN $1.00.
G.
SERVICER; ASSET TAPE.
SELLERS SHALL CAUSE SERVICER TO PROVIDE TO BUYER,
ELECTRONICALLY, IN A FORMAT MUTUALLY ACCEPTABLE TO BUYER AND SELLER, AN ASSET
TAPE BY NO LATER THAN THE REPORTING DATE.
THE SELLERS SHALL NOT CAUSE THE
PURCHASED MORTGAGE LOANS TO BE SERVICED BY ANY SERVICER OTHER THAN A SERVICER
EXPRESSLY APPROVED IN WRITING BY BUYER, WHICH APPROVAL SHALL BE DEEMED GRANTED
BY BUYER WITH RESPECT TO THE SELLERS WITH THE EXECUTION OF THIS AGREEMENT.
H.
INSURANCE.
THE SELLERS WILL CONTINUE TO MAINTAIN, FOR EACH SELLER AND ITS
SUBSIDIARIES, INSURANCE COVERAGE WITH RESPECT TO EMPLOYEE DISHONESTY, FORGERY OR
ALTERATION, THEFT, DISAPPEARANCE AND DESTRUCTION, ROBBERY AND SAFE BURGLARY,
PROPERTY (OTHER THAN MONEY AND SECURITIES) AND COMPUTER FRAUD IN AN AGGREGATE
AMOUNT ACCEPTABLE TO FANNIE MAE AND FREDDIE MAC.
I.
TRUST RECEIPT.
THE SELLERS SHALL CAUSE THE CUSTODIAN TO DELIVER TO BUYER A
MORTGAGE LOAN SCHEDULE AND EXCEPTION REPORT, AND A TRUST RECEIPT, NO LATER THAN
THE DATE SET FORTH IN THE CUSTODIAL AGREEMENT.
IF UPON EXAMINATION OF THE
DOCUMENTS INCLUDED IN ANY MORTGAGE FILE, THE CUSTODIAN DETERMINES THAT SUCH
DOCUMENTS DO NOT SATISFY THE REQUIREMENTS SET FORTH IN THE CUSTODIAL AGREEMENT,
THE CUSTODIAN SHALL MARK SUCH MORTGAGE LOAN AS AN EXCEPTION ON ITS MORTGAGE LOAN
SCHEDULE AND EXCEPTION REPORT.
J.
NO ADVERSE CLAIMS.
THE SELLERS WARRANT AND WILL DEFEND, AND SHALL CAUSE ANY
SERVICER TO DEFEND, THE RIGHT, TITLE AND INTEREST OF BUYER IN AND TO ALL
REPURCHASE ASSETS AGAINST ALL ADVERSE CLAIMS AND DEMANDS.
41
K.
ASSIGNMENT.
EXCEPT AS PERMITTED HEREIN, NEITHER SELLER NOR ANY SERVICER
SHALL SELL, ASSIGN, TRANSFER OR OTHERWISE DISPOSE OF, OR GRANT ANY OPTION WITH
RESPECT TO, OR PLEDGE, HYPOTHECATE OR GRANT A SECURITY INTEREST IN