OR IS OTHERWISE SUBJECT TO THE PROVISIONS OF EXECUTIVE
ORDER 13224 ISSUED ON SEPTEMBER 24, 2001 ("EO13224"); (II) WHOSE NAME APPEARS ON
THE UNITED STATES TREASURY DEPARTMENT'S OFFICE OF FOREIGN ASSETS CONTROL
("OFAC") MOST CURRENT LIST OF "SPECIFICALLY DESIGNATED NATIONAL AND BLOCKED
PERSONS" (WHICH LIST MAY BE PUBLISHED FROM TIME TO TIME IN VARIOUS MEDIUMS
INCLUDING, BUT NOT LIMITED TO, THE OFAC WEBSITE,
); (III) WHO COMMITS, THREATENS TO COMMIT OR
39
SUPPORTS "TERRORISM", AS THAT TERM IS DEFINED IN EO13224; OR (IV) WHO IS
OTHERWISE AFFILIATED WITH ANY ENTITY OR PERSON LISTED ABOVE (ANY AND ALL PARTIES
OR PERSONS DESCRIBED IN CLAUSES (I) THROUGH (IV) ABOVE ARE HEREIN REFERRED TO AS
A "PROHIBITED PERSON").
B.
WITH RESPECT TO EVERY PURCHASED MORTGAGE LOAN, EACH SELLER REPRESENTS AND
WARRANTS TO BUYER AS OF THE APPLICABLE PURCHASE DATE FOR ANY TRANSACTION AND
EACH DATE THEREAFTER THAT EACH REPRESENTATION AND WARRANTY SET FORTH ON
SCHEDULE 1 IS TRUE AND CORRECT IN ALL MATERIAL RESPECTS.
C.
THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT SHALL SURVIVE
TRANSFER OF THE PURCHASED MORTGAGE LOANS TO BUYER AND SHALL CONTINUE FOR SO LONG
AS THE PURCHASED MORTGAGE LOANS ARE SUBJECT TO THIS AGREEMENT.
UPON DISCOVERY
BY THE SELLERS, SERVICER OR BUYER OF ANY MATERIAL BREACH OF ANY OF THE
REPRESENTATIONS OR WARRANTIES SET FORTH IN THIS AGREEMENT, THE PARTY DISCOVERING
SUCH BREACH SHALL PROMPTLY GIVE NOTICE OF SUCH DISCOVERY TO THE OTHERS.
SUBJECT
TO THE BUYER'S RIGHT TO DETERMINE THE MARKET VALUE OF THE PURCHASED MORTGAGE
LOANS, THE SELLERS SHALL HAVE UP TO FIVE (5) BUSINESS DAYS TO VERIFY ANY ALLEGED
BREACH OF A REPRESENTATION OR WARRANTY FOR ANY PURCHASED MORTGAGE LOAN.
BUYER
HAS THE RIGHT TO REQUIRE, IN ITS UNREVIEWABLE DISCRETION, THE SELLERS TO
REPURCHASE WITHIN 1 BUSINESS DAY AFTER COMPLETION OF THE SELLERS' VERIFICATION
REVIEW ANY PURCHASED MORTGAGE LOAN FOR WHICH A BREACH OF ONE OR MORE OF THE
REPRESENTATIONS AND WARRANTIES REFERENCED IN SECTION 13(A) EXISTS AND WHICH
BREACH HAS A MATERIAL ADVERSE EFFECT ON THE VALUE OF SUCH MORTGAGE LOAN OR THE
INTERESTS OF THE BUYER.
14.
COVENANTS
Each Seller jointly and severally covenants with Buyer that, during the term of
this facility:
A.
MINIMUM CONSOLIDATED ADJUSTED TANGIBLE NET WORTH.
THE SELLERS SHALL
MAINTAIN A CONSOLIDATED ADJUSTED TANGIBLE NET WORTH OF AT LEAST $400 MILLION.
B.
INDEBTEDNESS TO CONSOLIDATED ADJUSTED TANGIBLE NET WORTH RATIO.
THE
SELLERS' RATIO OF CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED ADJUSTED TANGIBLE
NET WORTH SHALL NOT EXCEED 16:1.
C.
REPORTS.
THE SELLERS SHALL PROVIDE THE REPORTS AND NOTICES REQUIRED UNDER
SECTION 17 HEREOF.
D.
LITIGATION.
THE SELLERS WILL PROMPTLY, AND IN ANY EVENT WITHIN TEN (10)
DAYS AFTER SERVICE OF PROCESS ON ANY OF THE FOLLOWING, GIVE TO BUYER NOTICE OF
ALL LITIGATION, ACTIONS, SUITS, ARBITRATIONS, INVESTIGATIONS (INCLUDING, WITHOUT
LIMITATION, ANY OF THE FOREGOING WHICH ARE THREATENED OR PENDING) OR OTHER LEGAL
OR ARBITRABLE PROCEEDINGS AFFECTING THE SELLERS OR ANY OF THEIR SUBSIDIARIES OR
AFFECTING ANY OF THE PROPERTY OF ANY OF THEM BEFORE ANY GOVERNMENTAL AUTHORITY
THAT (I)