parties may agree with respect to any Transaction (or, in
the absence of any such agreement, as Buyer shall reasonably determine in its
sole discretion), on the Repurchase Date following the date any Income is
received by Buyer (or a servicer on its behalf) either (i) transfer (or permit
the servicer to transfer) to Sellers such Income with respect to any Purchased
Loans subject to such Transaction, or (ii) if a Margin Deficit then exists,
apply the Income payment to reduce the amount, if any, to be transferred to
Buyer by Sellers upon termination of such Transaction.
Buyer shall not be
obligated to take any action pursuant to the preceding sentences (A) to the
extent that such action would result in the creation of a Margin Deficit, unless
prior thereto or simultaneously therewith Sellers transfer to Buyer cash or
Additional Purchased Loans sufficient to eliminate such Margin Deficit, or (B)
if an Event of Default with respect to any Seller has occurred and is then
continuing at the time such Income is paid.
8.
SECURITY INTEREST; BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT
(A)
EACH SELLER AND BUYER INTEND THAT THE TRANSACTIONS HEREUNDER BE
SALES TO BUYER OF THE PURCHASED LOANS AND NOT LOANS FROM BUYER TO ANY SELLER
SECURED BY THE PURCHASED LOANS.
HOWEVER, IN ORDER TO PRESERVE BUYER'S RIGHTS
UNDER THIS AGREEMENT IN THE EVENT THAT A COURT OR
25
OTHER FORUM RECHARACTERIZES THE TRANSACTIONS HEREUNDER AS OTHER THAN SALES, AND
AS SECURITY FOR EACH SELLER'S PERFORMANCE OF ALL OF ITS OBLIGATIONS, EACH SELLER
HEREBY GRANTS BUYER A FULLY PERFECTED FIRST PRIORITY SECURITY INTEREST IN THE
FOLLOWING PROPERTY, WHETHER NOW EXISTING OR HEREAFTER ACQUIRED: (I) ALL
PURCHASED LOANS IDENTIFIED ON A TRANSACTION NOTICE DELIVERED BY ANY SELLER TO
THE BUYER AND THE CUSTODIAN FROM TIME TO TIME, (II) ALL LOAN DOCUMENTS,
INCLUDING WITHOUT LIMITATION ALL PROMISSORY NOTES, AND ALL RECORDS, AND ANY
OTHER COLLATERAL PLEDGED OR OTHERWISE RELATING TO SUCH PURCHASED LOANS, TOGETHER
WITH ALL FILES, MATERIAL DOCUMENTS, INSTRUMENTS, SURVEYS (IF AVAILABLE),
CERTIFICATES, CORRESPONDENCE, APPRAISALS, COMPUTER RECORDS, COMPUTER STORAGE
MEDIA, LOAN ACCOUNTING RECORDS AND OTHER BOOKS AND RECORDS RELATING THERETO,
(III) ALL MORTGAGE GUARANTIES AND INSURANCE (ISSUED BY GOVERNMENTAL AGENCIES OR
OTHERWISE) AND ANY MORTGAGE INSURANCE CERTIFICATE OR OTHER DOCUMENT EVIDENCING
SUCH MORTGAGE GUARANTIES OR INSURANCE RELATING TO ANY PURCHASED LOANS AND ALL
CLAIMS AND PAYMENTS THEREUNDER, (IV) ALL OTHER INSURANCE POLICIES AND INSURANCE
PROCEEDS RELATING TO ANY PURCHASED LOANS OR THE RELATED MORTGAGED PROPERTY, (V)
ALL INTEREST RATE PROTECTION AGREEMENTS RELATING TO ANY OR ALL OF THE FOREGOING,
(VI) ANY PURCHASE AGREEMENTS OR OTHER AGREEMENTS OR CONTRACTS RELATING TO OR
CONSTITUTING ANY OR ALL OF THE FOREGOING, (VII) ALL PURCHASE OR TAKE-OUT
COMMITMENTS RELATING TO OR CONSTITUTING ANY OR ALL OF THE FOREGOING, (VIII) ALL
"ACCOUNTS", "CHATTEL PAPER", "COMMERCIAL TORT CLAIMS", "DEPOSIT ACCOUNTS",
"DOCUMENTS," "EQUIVALENT", "GENERAL INTANGIBLES", "GOODS", "INSTRUMENTS",
"INVENTORY", "INVESTMENT PROPERTY", "LETTER OF CREDIT RIGHTS", AND "SECURITIES'
ACCOUNTS" AS EACH OF THOSE TERMS IS DEFINED IN THE UNIFORM COMMERCIAL CODE AND
ALL CASH AND CASH EQUIVALENTS AND ALL