Exhibit 10.6
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
among
HOMEAMERICAN CREDIT, INC.,
and
AMERICAN BUSINESS MORTGAGE SERVICES, INC.
jointly and severally, as Sellers
and
PENN SQUARE EAST FUNDING, LLC
as Purchaser
Dated as of November 4, 2004
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of November 4, 2004 (this
"Agreement"), among HOME AMERICAN CREDIT, INC., a Pennsylvania corporation
("HAC"); AMERICAN BUSINESS MORTGAGE SERVICES, INC., a New Jersey corporation
("ABMS"; HAC and ABMS are referred to herein collectively as the "Sellers" and
each individually as a "Seller"); and PENN SQUARE EAST FUNDING, LLC, a Delaware
limited liability company (the "Purchaser").
W I T N E S S E T H
WHEREAS, each Seller owns and from time to time originates and acquires
certain Mortgage Loans (as defined in the Loan Agreement defined below) as
described in the APA Assignment (as hereinafter defined) secured primarily by
mortgages, deeds of trust and security deeds on certain Mortgaged Properties (as
defined in the Loan Agreement) and the Mortgage Loan Documents (as defined in
the Loan Agreement) related thereto;
WHEREAS, (a) the Mortgage Loans, (b) the related Mortgage Loan
Documents together with all promissory notes, and Servicing Records and any
other collateral pledged or otherwise relating to such Mortgage Loans, all
files, material documents, instruments, surveys, certificates, correspondence,
appraisals, computer records, computer storage media, accounting records and
books and records relating thereto, (c) the related Mortgaged Properties or any
interest in real property collateralizing any Mortgage Loan, (d) the related
Mortgage Files, (e) the related Servicing Files, (f) 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 Mortgage Loans and all claims and payments thereunder,
(g) all other insurance policies and insurance proceeds relating to any Mortgage
Loans or the related Mortgaged Property, (h) all Interest Rate Protection
Agreements, if any (as defined in the Loan agreement defined below), (i) all
rights under the Servicing Agreement (as defined in the Loan Agreement), the
Custodial Agreement (as defined in the Loan Agreement) or any other document
related to Mortgage Loans or the related Mortgaged Properties, and (j) all
purchase or take-out commitments relating to or constituting any or all of the
related Mortgage Loans or the Mortgaged Properties; together with any other
property and any other rights related thereto the foregoing assets and property
described in (a) through (j) are hereinafter referred to, collectively, as the
"Assets");
WHEREAS, the parties hereto desire that on each Transfer Date (as
defined in the related APA Assignment) the Sellers sell all of their right,
title and interest in and to certain of the Assets to Purchaser pursuant to the
terms of this Agreement; and
WHEREAS, the Purchaser and Fortress Credit Corp. (together with its
successors and assigns, the "Lender") will be parties to the Master Loan and
Security Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified and in effect from time to time, the "Loan Agreement"),
pursuant to which the Lender shall agree, subject to the terms and conditions of
the Loan Agreement, to make revolving credit loans to the Purchaser to finance
the Purchaser's acquisition of the Assets.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions. For purposes of this Agreement all
capitalized terms used but not defined herein shall have the meanings assigned
thereto in the Loan Agreement.
Section 1.02 Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the term "including" is not limiting, and the
term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement or such
other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document. Section, subsection, clause, schedule,
and exhibit references herein are to this Agreement unless otherwise specified.
Any reference in this Agreement or in the other Loan Documents to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to any Person shall be construed to include such Person's
successors and assigns. Any requirement of a writing contained herein or in the
other Loan Documents shall be satisfied by the transmission of a record and any
record transmitted shall constitute a representation and warranty as to the
accuracy and completeness of the information contained therein.
ARTICLE II
SALE OF ASSETS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Assets to Purchaser. On the terms and conditions
of this Agreement:
(a) On each Transfer Date (as defined in each APA Assignment), each
Seller agrees to offer for sale, and to sell, transfer, assign, set over and
otherwise convey, absolutely and not as collateral security, without recourse,
the Assets described in the related APA Assignment substantially in the form
attached hereto as Exhibit A (the "APA Assignment") to the Purchaser and to
deliver, transfer, assign, set over and otherwise convey, absolutely and not as
collateral security, without recourse, all of its rights under and to the
related Mortgage Loan Documents, to the Purchaser or such other Person at the
Purchaser's direction, as applicable, and the Purchaser agrees to purchase such
Assets offered for sale by the applicable Seller.
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(b) The cash price paid by the Purchaser for the Assets sold on each
Transfer Date (the "Sales Price") shall be the sum of the Collateral Values as
of the Transfer Date with respect to the Assets conveyed on such date
(determined after giving effect to all payments of principal received thereon on
or prior to the Cut-off Date as set forth in the related APA Assignment).
(c) On each Transfer Date, each Seller shall sell, transfer, assign,
set over and otherwise convey, absolutely and not as collateral security,
without recourse, to the Purchaser the Assets and the Purchaser shall pay or
cause to be paid to the applicable Seller (or to such other Person as may be
specified by such Seller) the Sales Price in respect of such Assets; provided,
however, that the Purchaser's obligation under this clause (c) shall be subject
to the satisfaction of each of the following conditions on or prior to such
Transfer Date:
(i) the applicable Seller shall have delivered to the
Purchaser a duly executed APA Assignment with respect to all of the
Assets conveyed on such Transfer Date, which shall have attached
thereto an Asset Schedule (as defined in the APA Assignment) setting
forth the appropriate information with respect to all Assets conveyed
on such Transfer Date and shall have delivered to the Lender a computer
readable transmission of such Asset Schedule;
(ii) all collections received with respect to each of the
Assets relating to the period after the applicable Cut-off Date shall
have been deposited into the related Collection Account (as set forth
in the related APA Assignment);
(iii) as of such date, neither the Sellers nor the Purchaser
shall (A) be insolvent, (B) be made insolvent by its respective sale or
purchase of Assets or (C) have reason to believe that its insolvency is
imminent;
(iv) the applicable Seller shall have delivered the underlying
Mortgage Files conveyed on such Transfer Date to the Custodian in
accordance with the Custodial Agreement (in addition, the APA
Assignment shall be delivered to the Custodian promptly after the
Transfer Date), and the Purchaser and the Lender shall have received a
copy of the Custodian Loan Transmission and Exception Report and a copy
of the Trust Receipt;
(v) each of the representations and warranties made by each
Seller set forth in Schedules 1 and 2 shall be true and correct as of
the related Transfer Date with the same effect as if then made, and
each Seller shall have performed all obligations to be performed by it
under each of the related Mortgage Loan Documents on and prior to such
Transfer Date;
(vi) the applicable Seller shall, at its own expense, on the
Transfer Date, indicate in its computer files that the Assets
identified in the related APA Assignment have been sold to the
Purchaser pursuant to this Agreement and provide evidence of the same
to the Purchaser and the Lender, in form and substance satisfactory to
the Lender, within one Business Day of the Transfer Date;
(vii) the applicable Seller shall have taken any action
requested by the Purchaser or the Lender required to maintain the
ownership interest of the Purchaser in the Collateral and the perfected
first priority security interest therein of the Lender; and
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(viii) all conditions precedent in Sections 2.03, 5.01 and
5.02 of the Loan Agreement shall have been satisfied.
(d) Each of the conveyances contemplated hereby shall be sales from the
Sellers to the Purchaser of all of the Sellers' right, title and interest in and
to the Assets. Notwithstanding the foregoing, in the event that, despite the
parties expressed intentions that such transactions are sales, the transactions
set forth herein are deemed not to be sales, each Seller hereby grants to the
Purchaser a first priority security interest in all of such Seller's right,
title and interest in, to and under the Assets, whether now existing or
hereafter created, to secure each Seller's obligations hereunder, and this
Agreement shall constitute a security agreement under applicable law, in which
event Purchaser shall have all the rights and remedies of a secured party under
the Uniform Commercial Code and other applicable law.
Section 2.02 Obligations of Sellers.
(a) Within ten days after the Closing Date (or such other time as may
be agreed to by the Lender, including as agreed to in the Custodial Agreement)
and on or prior to each Transfer Date, the Lender shall have received evidence
satisfactory to it of (i) the completion of all recordings, registrations and
filings as may be necessary or, in the opinion of the Lender, desirable to
perfect or evidence the sale and assignment by the Sellers to the Purchaser of
the Sellers' ownership interest in the Assets, the related property and the
proceeds thereof and (ii) the completion of all recordings, registrations and
filings as may be necessary or, in the opinion of the Lender, desirable to
perfect or evidence the grant of a perfected first priority security interest in
the Assets, the related property and the proceeds thereof granted by the Sellers
in favor of the Purchaser (as contemplated by Section 2.01(d)). Each Seller
agrees to file all necessary continuation statements and any amendments to the
UCC-1 financing statements necessary to perfect the interest of the Purchaser
and the Lender in and to the Assets and the Purchaser's rights under this
Agreement and to take such other action as may be necessary or, in the opinion
of the Purchaser or the Lender, desirable to perfect or evidence the Purchaser's
and the Lender's interest in the Assets and the Purchaser's rights under this
Agreement conveyed under the Loan Documents.
(b) (i) In connection with each sale of an Asset hereunder, each Seller
shall deliver to and deposit with the Custodian, on behalf of the Purchaser for
the benefit of the Lender as set forth in the Loan Agreement, the underlying
Mortgage File with respect to each Asset conveyed on such Transfer Date on or
before the related Transfer Date. In connection with each sale of an Asset
hereunder that is a wet ink mortgage loan, each Seller shall cause the related
Settlement Agent to deliver to and deposit with the Custodian, on behalf of the
Purchaser for the benefit of the Lender as set forth in the Loan Agreement, the
underlying Mortgage File with respect to each Asset conveyed within six (6)
Business Days of such Transfer Date; provided, that each Seller shall cause the
related Settlement Agent to directly deliver to and deposit with the Custodian,
within one (1) Business Day of the Transfer Date, the Mortgage Note. With
respect to any Assets that are set forth as exceptions in the Custodian Loan
Transmission and Exception Report, each Seller hereby agrees and covenants that
it shall take all such actions and shall perform all such obligations, on behalf
of the Purchaser and the Lender, as are necessary to cure such exceptions or
repurchase such Assets in accordance with Section 5 of the Custodial Agreement.
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(ii) It is understood and agreed that the obligations set
forth in Section 2.02(b)(i) shall survive delivery of the Mortgage
Files to the Custodian (as the agent of the Purchaser and the Lender)
and shall inure to the benefit of the Purchaser and the Lender.
(c) Each Seller hereby further confirms to the Purchaser that, within
one Business Day of the Closing Date and each Transfer Date, it shall provide
evidence to the Purchaser and the Lender that the portions of such Seller's
electronic ledger relating to the Assets have been clearly and unambiguously
marked to indicate that the Assets have been sold to the Purchaser hereunder and
the Assets have been pledged to the Lender by the Purchaser.
(d) On and after each Transfer Date, the Purchaser shall own the Assets
which have been identified as being sold by the applicable APA Assignment and
the Sellers shall not take any action inconsistent with such ownership and shall
not claim any ownership interest in any such conveyed Asset.
Section 2.03 Dispositions.
Each Seller hereby agrees and covenants that in connection with each
disposition of Assets it shall perform, on behalf of the Purchaser, such duties
and take such actions as specified in Sections 7.17, 7.20, 7.21, 7.22, 7.27,
11.16 and 11.21 of the Loan Agreement.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Sellers' Representations and Warranties. (a) Each Seller
makes each of the representations and warranties set forth in Schedule 1 hereto
to the Purchaser (i) as of the Closing Date, and (ii) as of each Transfer Date
with respect to the Assets conveyed on such Transfer Date.
(b) Each Seller further makes, as of the Closing Date and as of each
Transfer Date, each of the representations and warranties set forth in Schedule
2 hereto.
It is understood and agreed that the representations and warranties set forth in
this Section 3.01 shall survive delivery of the respective Mortgage Files to the
Custodian (as the agent of the Purchaser and the Lender) and shall inure to the
benefit of the Purchaser, the Servicer, the Custodian and the Lender. Upon the
discovery by the Servicer, the Custodian, the Sellers, the Purchaser or the
Lender of a breach of any of the representations and warranties of the Sellers
set forth in Schedule 1 or 2 hereto that materially and adversely affects the
value of any of the Assets, or the interests of the Lender in any Asset, with
respect to which such representation or warranty is made, the Sellers shall be
jointly and severally obligated to (a) promptly cure such breach in all material
respects, or (b) purchase such Mortgage Loan on the next succeeding Payment
Date, at the Repurchase Price (as hereinafter defined). "Repurchase Price" shall
mean, with respect to any Mortgage Loan, the principal balance of such Mortgage
Loan as of the date of re-purchase, plus all accrued and unpaid interest on such
principal balance computed, as of the date of re-purchase, at the Mortgage
Interest Rate, plus the amount of any unreimbursed Servicing Advances (as
defined in the Servicing Agreement) made by the Servicer with respect to such
Mortgage Loan, which purchase price shall be deposited in the Collection Account
on the next succeeding Determination Date (as defined in the Servicing
Agreement), after deducting therefrom any amounts received in respect of such
repurchased Mortgage Loan or Loans and being held in the Collection Account for
future payment to the extent such amounts have not yet been applied to principal
or interest on such Mortgage Loan. The obligations of the Sellers set forth
herein to cure such breach or repurchase an affected Asset or, as the case may
be, shall constitute the sole remedies available hereunder to the Purchaser
respecting a breach of the representations and warranties contained in Section
3.01(a) and (b) hereof or Schedules 1 and 2 hereto.
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Section 3.02 Reconstitution of Mortgage Loans.
(a) The Sellers acknowledge that, with respect to some or all of the
Mortgage Loans, such Mortgage Loans may be subject to:
(i) one or more sales as whole loan transfers by the Purchaser
(each, a "Whole Loan Transfer"); and/or
(ii) one or more sales as public or private pass-through
transfers (each, a "Pass-Through Transfer").
(b) With respect to each Whole Loan Transfer or Pass-Through Transfer,
as the case may be, the Sellers agree:
(i) to cooperate with any prospective purchaser with respect
to all reasonable requests and due diligence procedures (including
participating in a reasonable number of meetings with rating agencies,
bond insurers and such other parties as Purchaser shall designate and
participating in meetings with prospective purchasers of the Mortgage
Loans or interests therein and providing information as reasonably
requested by such purchasers), and with respect to the preparation
(including, but not limited to, the endorsement, delivery, assignment,
and execution) of the Mortgage Loan documents and other related
documents, and with respect to servicing requirements reasonably
requested by the rating agencies and credit enhancers;
(ii) to execute all reconstitution agreements reasonably
required to be executed by the Sellers in connection with such
Pass-Through Transfer or Whole Loan Transfer (including a mutually
acceptable assignment assumption and recognition agreement);
(iii) to deliver for inclusion in any prospectus or other
offering material such publicly available information regarding the
Sellers, their financial condition and their mortgage loan delinquency,
foreclosure and loss experience and any additional information
reasonably requested, and which the Sellers are capable of providing
without unreasonable effort or expense, and to deliver any similar non
public, unaudited financial information and such statements and audit
letters of reputable, certified public accountants pertaining to
information provided by the Sellers pursuant to the above as shall be
reasonably requested, and to indemnify certain Persons for material
misstatements or omissions contained in such information;
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(iv) to deliver such statements and audit letters of
reputable, certified public accountants pertaining to information
pursuant to clause (iv) above as shall be reasonably requested; and
(v) to deliver such legal documents and in-house opinions of
counsel as are customarily delivered by originators or servicers, as
the case may be in connection with Whole Loan Transfers or Pass-Through
Transfers.
(c) With respect to each Whole Loan Transfer or Pass-Through Transfer,
as the case may be, the Sellers in their capacity as Servicer agree to make all
the representations and warranties set forth in Schedule 1 and 2, as of the date
of the Whole Loan Transfer or Pass-Through Transfer and (1) modified to the
extent necessary to reflect the pool statistics of the Mortgage Loans as of the
date of such Whole Loan Transfer or Pass-Through Transfer, (2) supplemented by
additional representations and warranties that are not unreasonable under the
circumstances as of the date of such Whole Loan Transfer or Pass-Through
Transfer and to the extent that any events or circumstances, including changes
in applicable law occurring subsequent to the related closing date(s), would
render a related Mortgage Loan unmarketable to a material segment of the
secondary mortgage or mortgage-backed securities market if such additional
representations and warranties were not made, and (3) subject to exceptions
relating to conditions or circumstances with respect to the Mortgage Loans that
arose after the Transfer Date and are identified by the Sellers in their
capacity as Servicer.
ARTICLE IV
SELLER COVENANTS
Section 4.01 No Further Sale or Transfer. Each Seller hereby covenants
that, except for the sales hereunder, such Seller will not sell, pledge, assign
or transfer to any other Person, or grant, create, incur, assume or suffer to
exist any lien on, any Asset, or any interest therein.
Section 4.02 Defense of Right, Title and Interest. Each Seller will
defend the right, title and interest of the Purchaser in, to and under the
Assets against all claims of third parties claiming through or under such
Seller.
Section 4.03 Separateness Covenants. Each Seller hereby covenants that
it will not take any actions or fail to take any actions which would cause the
Purchaser to violate the covenants set forth in Article V.
Section 4.04 Further Assurances. Whenever and so often as reasonably
requested by the Purchaser or the Lender, each Seller shall promptly execute and
deliver or cause to be executed and delivered all such other and further
instruments, documents, or assurances, and promptly do or cause to be done all
such other things, as may be necessary and reasonably required to vest more
fully in the requesting party all rights, both directly and indirectly,
interests, powers, benefits, privileges and advantages conferred or intended to
be conferred upon it by this Agreement.
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ARTICLE V
PURCHASER COVENANTS
The Purchaser hereby covenants as follows:
(a) The Purchaser shall not amend, alter, change or repeal the
definition of "Independent Director" or Sections 5(c), 7, 8, 9, 10, 16, 20, 21,
22, 23, 24, 25, 26, 29 or 31 or Schedule A of the Operating Agreement without
the unanimous written consent of its board, including the Independent Director,
as set forth in the Operating Agreement.
(b) The Purchaser shall not, without the prior unanimous written
consent of its members and its board (including the Independent Director), take
any Material Action (as defined in the Operating Agreement).
(c) The Purchaser shall do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights (charter and
statutory) and franchises; provided, however, that the Purchaser shall not be
required to preserve any such right or franchise if its board shall determine
that the preservation thereof is no longer desirable for the conduct of its
business and that the loss thereof is not disadvantageous in any material
respect to the Purchaser. The Purchaser also shall:
(i) maintain its own separate books and records and bank
accounts;
(ii) at all times hold itself out to the public and all other
Persons as a legal entity separate from its members and any other
Person;
(iii) have a board of directors separate from that of its
members and any other Person;
(iv) file its own tax returns, if any, as may be required
under applicable law, to the extent (1) not part of a consolidated
group filing a consolidated return or returns or (2) not treated as a
division for tax purposes of another taxpayer, and pay any taxes so
required to be paid under applicable law;
(v) except as contemplated by the Basic Documents (as set
forth in the Operating Agreement), not commingle its assets with assets
of any other Person;
(vi) conduct its business in its own name and strictly comply
with all organizational formalities to maintain its separate existence;
(vii) maintain separate financial statements;
(viii) pay its own liabilities only out of its own funds;
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(ix) maintain an arm's length relationship with its Affiliates
and any member;
(x) pay the salaries of its own employees, if any;
(xi) not hold out its credit or assets as being available to
satisfy the obligations of others;
(xii) allocate fairly and reasonably any overhead for shared
office space;
(xiii) use separate stationery, invoices and checks;
(xiv) except as contemplated by the Basic Documents, not
pledge its assets for the benefit of any other Person;
(xv) correct any known misunderstanding regarding its separate
identity;
(xvi) maintain adequate capital in light of its contemplated
business purpose, transactions and liabilities;
(xvii) cause its board of directors to meet at least annually
or act pursuant to written consent and keep minutes of such meetings
and actions and observe all other Delaware limited liability company
formalities;
(xviii) not acquire any securities of any Member;
(xix) cause its directors, officers, agents and other
representatives of the Purchaser to act at all times with respect to
the Purchaser consistently and in furtherance of the foregoing and in
the best interests of the Purchaser; and
(xx) Failure of the Purchaser, or its members or board on
behalf of the Purchaser, to comply with any of the foregoing covenants
or any other covenants contained in this Agreement shall not affect the
status of the Purchaser as a separate legal entity or the limited
liability of its members or its directors.
(d) The Purchaser shall not:
(i) except as contemplated by the Basic Documents, guarantee
any obligation of any Person, including any Affiliate;
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(ii) engage, directly or indirectly, in any business other
than the actions required or permitted to be performed under Section 7 of the
Operating Agreement, the Basic Documents or Section 9(j) of the Operating
Agreement;
(iii) incur, create or assume any indebtedness other than as
expressly permitted under the Basic Documents;
(iii) make or permit to remain outstanding any loan or advance
to, or own or acquire any stock or securities of, any Person, except that the
Purchaser may invest in those investments permitted under the Basic Documents
and may make any advance required or expressly permitted to be made pursuant to
any provisions of the Basic Documents and permit the same to remain outstanding
in accordance with such provisions;
(iv) to the fullest extent permitted by law, engage in any
dissolution, liquidation, consolidation, merger, asset sale or transfer of
ownership interests other than such activities as are expressly permitted
pursuant to any provision of the Basic Documents; or
(v) form, acquire or hold any subsidiary (whether corporate,
partnership, limited liability company or other).
ARTICLE VI
TERMINATION
Section 6.01 Termination. The respective obligations and
responsibilities of the Sellers and the Purchaser created hereby shall terminate
upon payment in full of all Obligations under the Loan Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01 Amendment. This Agreement may be amended from time to time
with the prior written consent of the Lender, in its sole discretion, by a
written agreement signed by the Sellers and the Purchaser.
Section 7.02 Governing Law. This Agreement shall be governed by and
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. With respect to all legal proceedings arising out of
or relating to this Agreement or the transactions contemplated hereby, each
party irrevocably submits to the non-exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough of
Manhattan, City of New York, and each party irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party, provided that service of process is made by any
lawful means. Nothing in this Section 7.02 shall affect the right of any party
hereto or its assignees, or of the Lender or its assignees, to bring any other
action or proceeding against any party hereto or its property in the courts of
other jurisdictions.
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Section 7.03 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given upon receipt
thereof if (i) personally delivered or mailed by registered mail, postage
prepaid, or (ii) transmitted by facsimile (with a copy delivered by overnight
courier) upon telephone confirmation of receipt of such transmission, as
follows:
(a) if to the Sellers:
American Business Financial Services, Inc.
The ▇▇▇▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Blank Rome LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
or, such other persons and at such other addresses, facsimile numbers and
confirmation numbers as may hereafter be furnished to the Purchaser in writing
by ABFS.
(b) if to the Purchaser:
Penn Square East Funding, LLC The ▇▇▇▇▇▇▇▇▇
Building ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Attention:
Telecopy number:
Telephone number:
with a copy to:
Blank Rome LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone number: (▇▇▇) ▇▇▇-▇▇▇▇
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or such other addresses, facsimile numbers and confirmation numbers as may
hereafter be furnished to the Sellers in writing by the Purchaser.
Section 7.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, 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 7.05 Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 7.06 Further Agreements. Each Seller and the Purchaser each
agree to execute and deliver to the other such amendments to documents and such
additional documents, instruments or agreements as reasonably may be necessary
or appropriate to effectuate the purposes of this Agreement or in connection
with the offering of securities representing interests in the Assets.
Section 7.07 Recordation and Sales. The Purchaser is hereby purchasing
the Assets and each Seller is hereby selling the Assets. Accordingly, as of the
Closing Date and as of each Transfer Date, the sale of each of the Assets
conveyed by the Sellers on the Closing Date or such Transfer Date shall be
reflected on the balance sheets and other financial statements (including the
footnotes thereto) of the Sellers as a sale of such Assets by the Sellers under
GAAP.
Section 7.08 Successors and Assigns; Assignment of Purchase Agreement.
This Agreement shall bind each Seller and the Purchaser and inure to the benefit
of and be enforceable by each Seller and the Purchaser, together with the Lender
as a third party beneficiary. The obligations of the Sellers under this
Agreement cannot be assigned or delegated to a third party without the consent
of each of the Purchaser and the Lender, which consent shall be at each such
Person's sole discretion. The parties hereto acknowledge that the Purchaser will
borrow under the Loan Agreement, with its obligations thereunder secured by the
Assets. As an inducement to the Purchaser to purchase the Assets and to the
Lender to enter into the Loan Agreement with the Purchaser, each Seller
acknowledges and consents to the assignment by the Purchaser to the Lender of
all of the Purchaser's rights against the Sellers pursuant to this Agreement and
to the enforcement or exercise of any right or remedy against the Sellers
pursuant to this Agreement by the Purchaser or the Lender. Such enforcement of a
right or remedy by the Purchaser or the Lender, shall have the same force and
effect as if the right or remedy had been enforced or exercised by the Purchaser
directly.
Section 7.09 Survival. The representations and warranties set forth in
Article III and the provisions of Articles II, IV, V, VI and VII shall survive
the Purchaser's purchase of the Assets hereunder.
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Section 7.10 Restrictions on Transfer. Aside from any of Seller's
repurchase obligations pursuant to Section 3.01(c), the Purchaser shall not be
permitted to transfer, assign, set over, contribute or sell the Assets to the
Sellers except as set forth in Section 2.07(a) of the Loan Agreement. Any such
transfer shall be null and void and of no force and effect whatsoever.
Section 7.11 Joint and Several Liability. The Sellers hereby
acknowledge and agree that the obligations of each Seller hereunder shall be
joint and several.
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IN WITNESS WHEREOF, each Seller and the Purchaser have caused this
Asset Purchase Agreement to be duly executed on their behalf by their respective
officers thereunto duly authorized as of the day and year first above written.
HOME AMERICAN CREDIT, INC., d/b/a
UPLAND MORTGAGE,
as a Seller
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President, General Counsel
and Secretary
AMERICAN BUSINESS MORTGAGE SERVICES, INC.,
as a Seller
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President, General Counsel
and Secretary
PENN SQUARE EAST FUNDING, LLC,
as Purchaser
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS
As to each Mortgage Loan that forms part of the Assets being
transferred hereunder (and the related Mortgage, Mortgage Note, Assignment of
Mortgage and Mortgaged Property), each Seller shall make the following
representations and warranties to the Purchaser:
(a) The information set forth in each Mortgage Loan Data
Transmission with respect to such Mortgage Loan is complete, true and correct;
(b) The information provided by the Borrower or any Related
Party in connection with such Mortgage Loan will be true and correct in all
material respects on the date or dates when such information is furnished;
(c) Except as set forth in clause (n) below, such Mortgage is
a valid and enforceable first or second lien on a fee simple (or its equivalent
under applicable state law) estate in the real property securing the amount owed
by the Mortgagor under such Mortgage Note subject only to Permitted Liens (other
than Borrower);
(d) The Borrower has good title to, and is the sole owner of
such Mortgage Loan, free of any interest, including, without limitation, any and
all liens, charges or security interests of any nature of any other Person
(other than the Lender), and the Borrower has granted a valid and enforceable
first priority security interest in such Mortgage Loan to the Lender, which
security interest is perfected. Furthermore, immediately prior to the grant of
the aforementioned security interest to Lender, neither such Mortgage Loan nor
any of the related Mortgage Loan Documents were subject to any liens, charges or
security interests of any nature of any other Person;
(e) At origination, such Mortgage Loan had an original term to
maturity of no greater than 360 months;
(f) There is no mechanics' lien or claim for work, labor or
material (and no rights are outstanding that under law could give rise to such
lien) affecting the premises subject to such Mortgage which is or may be a lien
prior to, or equal or coordinate with, the lien of such Mortgage, except those
which are insured against by the title insurance policy referred to in clause
(aa) below;
(g) There is no delinquent tax or assessment lien against such
Mortgaged Property;
(h) Such Mortgage Loan, Mortgage and Mortgage Note, including,
without limitation, the obligation of the Mortgagor to pay the unpaid principal
of and interest on such Mortgage Note, are each not subject to any right of
rescission (or any such rescission right has expired in accordance with
applicable law), set-off, counterclaim, or defense, including the defense of
usury, nor will the operation of any of the terms of such Mortgage Note or such
Mortgage, or the exercise of any right thereunder, render either such Mortgage
Note or such 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;
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(i) Such Mortgaged Property is free of any material damage and
is in generally good repair, and there is no pending or threatened proceeding
for the total or partial condemnation of such Mortgaged Property;
(j) Neither the Company, the Borrower, or any Related Party
has received a notice of default of any mortgage loan secured by such Mortgaged
Property which has not been cured by a party;
(k) Such Mortgage Note and Mortgage are in substantially the
forms previously provided to the Lender on behalf of the Borrower;
(l) Such Mortgage Loan had, at the date of origination, a
Combined LTV of 100.00% or less;
(m) Such Mortgage Loans was (i) originated by an Approved
Mortgage Originator in the normal course of its business or purchased by an
Approved Mortgage Purchaser pursuant to an Approved Purchase Agreement, (ii) not
selected by any Approved Mortgage Purchaser for sale to the Borrower under an
Approved Purchase Agreement on any basis adverse to the Borrower relative to the
portfolio of similar mortgage loans of the Approved Mortgage Purchaser, and
(iii) prior to the Closing Date, serviced by the Approved Mortgage Originator or
an Affiliate thereof in accordance with Accepted Servicing Practices;
(n) In the event a material portion of the estate of the
Mortgagor under such Mortgage Loan is a leasehold estate, the cost of the
leasehold expense has been factored into the debt-to-income calculations with
respect to the such Mortgagor and the maturity date of the ground lease is later
than the maturity date of such Mortgage Loan. In addition, the aforementioned
ground lease is prior to any mortgage or other lien upon the related fee
interest and the landlord under the ground lease has not entered into any
agreement to subordinate the ground lease to future mortgages or liens on the
fee interest;
(o) Such Mortgage and Mortgage Note contain customary and
enforceable provisions which render the rights and remedies of the holder
thereof adequate for the realization against the such Mortgaged Property of the
benefits of the security including (A) if such Mortgage is designated as a deed
of trust, by trustee's sale, and (B) otherwise, by judicial foreclosure. There
is no homestead or other exemption available to the related Mortgagor which
would materially interfere with the right to sell such Mortgaged Property at a
trustee's sale or the right to foreclose such Mortgage. Such Mortgage contains
customary and enforceable provisions for the acceleration of the payment of the
principal balance of such Mortgage Loan in the event all or any part of such
Mortgaged Property is sold or otherwise transferred without the prior written
consent of the holder thereof;
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(p) The proceeds of such Mortgage Loan have been fully
disbursed, including reserves set aside by the Approved Mortgage Originator, and
there is no requirement for, and neither the Borrower, the Company, or any
Related Party shall make any, future advances thereunder. Any future advances
made prior to the applicable Funding Date have been consolidated with the
principal balance secured by such Mortgage, and such principal balance, as
consolidated, bears a single interest rate and single repayment term reflected
on the applicable Mortgage Loan Data Transmission. The principal balance of such
Mortgage Loan as of the applicable Funding Date does not exceed the original
principal amount of such Mortgage Loan. Any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or recording such Mortgage Loan have been paid;
(q) Such Mortgage Loans was originated in compliance with the
Approved Underwriting Guidelines;
(r) Since origination, the terms of such Mortgage and Mortgage
Note have not been impaired, waived, altered, or modified in any respect, except
by a written instrument which has been recorded, if necessary, to protect the
interest of the mortgagee and which has been delivered to the Custodian. The
substance of any such alteration or modification will be reflected on the
applicable Mortgage Loan Data Transmission and, to the extent necessary, has
been or will be approved by (i) the insurer under the applicable mortgage title
insurance policy, and (ii) the insurer under any other insurance policy required
hereunder for such Mortgage Loan where such insurance policy requires approval
and the failure to procure approval would impair coverage under such policy;
(s) No instrument of release, waiver, alteration or
modification has been executed in connection with such Mortgage Loan, and the
related Mortgagor has not been released, in whole or in part, except in
connection with an assumption agreement which has been approved by the insurer
under any insurance policy required hereunder for such Mortgage Loan where such
policy requires approval and the failure to procure approval would impair
coverage under such policy, and which is part of the mortgage file and has been
delivered to the Custodian, and the terms of which are reflected in the
applicable Mortgage Loan Data Transmission;
(t) Except as disclosed in the applicable Mortgage Loan Data
Transmission, there is no default, breach, violation or event of acceleration
existing under such Mortgage or 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 such a default, breach, violation or event of acceleration, and
neither the Approved Mortgage Originator nor the Borrower has waived any such
default, breach, violation or event of acceleration. All taxes, governmental
assessments (including assessments payable in future installments), insurance
premiums, water, sewer, and municipal charges, leaseholder payments or ground
rents which previously became due and owing in respect of or affecting such
Mortgaged Property have been paid. Neither the Approved Mortgage Originator nor
the Borrower has advanced funds or induced, solicited or knowingly received any
advance of funds by a party other than the related Mortgagor, directly or
indirectly, for the payment of any amount required by such Mortgage or Mortgage
Note;
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(u) All of the improvements which were included for the
purposes of determining the Appraised Value of such Mortgaged Property were
completed prior to or at the time that such Mortgage Loan was originated and lie
wholly within the boundaries and building restriction lines of such Mortgaged
Property. No improvements on adjoining properties encroach upon such Mortgaged
Property. No improvement located on or being part of such 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 such Mortgaged Property (including all such improvements
which were included for the purpose of determining such Appraised Value) and,
with respect to the use and occupancy of the same, including, but not limited,
to certificates of occupancy and fire underwriter's certificates, have been made
or obtained from the appropriate authorities and such Mortgaged Property is
lawfully occupied under applicable law. In addition, such Mortgaged Property (i)
is located on or adjacent to a dedicated road, or has access to an irrevocable
easement permitting ingress and egress, (ii) is served by public utilities,
water and sewer (or septic facilities), and (iii) has parking as required under
applicable law;
(v) There do not exist any circumstances or conditions with
respect to such Mortgage, such Mortgaged Property, the related Mortgagor or such
Mortgagor's credit standing that can be reasonably expected to cause such
Mortgage Loan to become delinquent or adversely affect the value or
marketability of such Mortgage Loan, other than any such circumstances or
conditions expressly permitted under the Approved Underwriting Guidelines;
(w) All parties which have had any interest in such Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (i) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
such Mortgaged Property is located, and (ii) (A) organized under the laws of
such state, (B) qualified to do business in such state, (C) federal savings and
loan associations or national banks having principal offices in such state, (D)
not doing business in such state, or (E) not required to qualify to do business
in such state;
(x) such Mortgage Note and Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and except that the
equitable remedy of specific performance and other equitable remedies are
subject to the discretion of the courts. All parties to such Mortgage Note and
Mortgage had legal capacity to execute such Mortgage Note and Mortgage and to
convey the estate therein purported to be conveyed, and such Mortgage Note and
Mortgage have been duly and properly executed by such parties or pursuant to a
valid power-of-attorney that has been recorded with such Mortgage;
(y) The sales, transfers and conveyances of such Mortgage Note
and Mortgage as and in the manner contemplated by the Asset Purchase Agreement,
and this Loan Agreement (the "Prior Conveyance Agreements") are sufficient (i)
to fully transfer to the Borrower all right, title and interest of the
transferor thereto as note holder and mortgagee, and (ii) to the extent that the
transferor retains an interest in such Mortgage Note or Mortgage despite such
sale, transfer and conveyance, to grant to the Borrower the security interest
referred to in the prior Conveyance Agreements hereof and thereafter, and to
pledge the interest of the Borrower to the Lender. Such Mortgage has been duly
assigned by the Approved Mortgage Originator to the Lender, and such Mortgage
Note has been duly endorsed as required under the terms of this Loan Agreement.
The related Assignment of Mortgage delivered pursuant to Section 2(a) and Annex
14 of the Custodial Agreement is in recordable form and is acceptable for
recording under the laws of the applicable jurisdiction. The endorsement of such
Mortgage Note, the delivery to the Custodian, on behalf of the Lender, of the
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endorsed Mortgage Note, and such Assignment of Mortgage, and the delivery of
such Assignment of Mortgage to the Custodian are sufficient to permit the Lender
to avail itself of all protection available under applicable law against the
claims of any present or future creditors of the Borrower, the Related Parties
or the Approved Mortgage Originator, and are sufficient to prevent any other
sale, transfer, assignment, pledge or hypothecation of such Mortgage Note or
Mortgage by the Borrower, the Related Parties or the Approved Mortgage
Originator from being enforceable, even if the Lender does not record such
Assignment of Mortgage in the applicable recording office. After the transfer
pursuant to Section 4.01, the Lender shall have a first priority perfected
security interest in such Mortgage Loan;
(z) Any and all requirements of any federal, state, or local
law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity,
predatory and abusive lending or disclosure laws applicable to such Mortgage
Loan have been complied with, and the Initial Servicer shall maintain in its
possession, available for the Lender's inspection, and shall deliver to the
Lender or its designee upon demand, evidence of compliance with all such
requirements. The consummation of the transactions contemplated by this Loan
Agreement will not cause the violation of any such laws;
(aa) Such Mortgage Loan is covered by an ALTA mortgage title
insurance policy or such other generally used and acceptable form of policy,
issued by and the valid and binding obligation of a title insurer qualified to
do business in the jurisdiction where such Mortgaged Property is located,
insuring the Originator and its successors and assigns, as to the first or
second priority lien, as applicable, of such Mortgage in the original principal
amount of such Mortgage Loan. The assignment to the Lender of the Borrower's
interest in such mortgage title insurance policy does not require the consent of
or notification to the insurer. Such mortgage title insurance policy is in full
force and effect and will be in full force and effect and inure to the benefit
of the Lender upon the consummation of the transactions contemplated by this
Loan Agreement. No claims have been made under such mortgage title insurance
policy and none of the Company, the Borrower, or any Related Party, or any prior
holder of such Mortgage has done, by act or omission, anything which would
impair the coverage of such mortgage title insurance policy;
(bb) All improvements upon such Mortgaged Property are insured
against loss by fire, hazards of extended coverage, and such other hazards as
are customary in the area where such Mortgaged Property is located, including,
without limitation, earthquake hazards, pursuant to insurance policies
conforming to the requirements of the Accepted Servicing Practices and
consistent with the Approved Underwriting Guidelines. If such Mortgaged Property
at origination was located in an area identified on a flood hazard boundary map
or flood insurance rate map issued by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available),
such Mortgaged Property was covered by flood insurance at origination. Each
individual insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Borrower upon the consummation of the transactions
contemplated by this Loan Agreement, and contain a standard mortgage clause
naming the originator of such Mortgage Loan, and its successors and assigns, as
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mortgagee and loss payee. All premiums thereon have been paid. In addition each
insurance policy requires prior notice to the insured of termination or
cancellation and no such notice has been received. Such Mortgage obligates the
related Mortgagor to maintain all such insurance at such Mortgagor's cost and
expense, and upon such Mortgagor's failure to do so, authorizes the holder of
such Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense and to seek reimbursement therefor from such Mortgagor, and none of the
Company, the Borrower, the Related Parties, or any prior holder of such Mortgage
has acted or failed to act so as to impair the coverage of any such insurance
policy or the validity, binding effect, and enforceability thereof;
(cc) If such Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by Borrower or any other Person to any
trustee under the deed of trust, except in connection with a trustee's sale
after default by the related Mortgagor;
(dd) Such Mortgaged Property consists of one or more parcels
of real property separately assessed for tax purposes. To the extent there is
erected thereon a detached or an attached one-family residence or a detached
two-to-six-family dwelling, or an individual condominium unit in a low-rise
condominium, or an individual unit in a planned unit development, or a
commercial property, a manufactured home, or a mixed use or multiple purpose
property, such residence, dwelling or unit is not (i) a unit in a cooperative
apartment, (ii) a property constituting part of a syndication, (iii) a time
share unit, (iv) a property held in trust, (v) a mobile home, (vi) a
log-constructed home, or (vii) a recreational vehicle;
(ee) There exist no material deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made or which the Borrower
expects not to be cured, and no escrow deposits or payments of other charges or
payments due the mortgagee have been capitalized under such Mortgage or Mortgage
Note. All escrow deposits and similar payments required pursuant to such
Mortgage Loan are in the Escrow Account;
(ff) Such Mortgage Loan was not originated at a below market
interest rate. Such Mortgage Loan does not have a shared appreciation feature,
or other contingent interest feature, or negative amortization;
(gg) The origination and collection practices used by the
Borrower and the Initial Servicer with respect to such Mortgage Loan have been
in all respects legal, proper, prudent, and customary in the mortgage
origination and servicing business with respect to mortgage loans similar to
such Mortgage Loan. No fraudulent acts were committed by the Company, the
Borrower, any Related Party, or the Initial Servicer in connection with or
related to the origination, servicing or collection of such Mortgage Loan;
(hh) The related Mortgagor has, to the extent required by
applicable law, executed a statement to the effect that such Mortgagor has
received all disclosure materials, if any, required by applicable law with
respect to the making of fixed-rate mortgage loans. The Initial Servicer has
maintained or caused to be maintained such statement in the Servicing File;
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(ii) All amounts received by the Approved Mortgage Originators
with respect to such Mortgage Loan after the applicable Cut-Off Date and
required to be deposited in the Collection Accounts have been so deposited in
the Collection Accounts and are, as of the Closing Date, or will be as of the
Funding Date, as applicable, in the Collection Accounts;
(jj) The appraisal report with respect to such Mortgaged
Property contained in the Servicing File was signed prior to the approval of the
application for such Mortgage Loan by a qualified appraiser, duly appointed by
the originator of such Mortgage Loan, who had no interest, direct or indirect,
in such Mortgaged Property or in any loan made on the security thereof and whose
compensation is not affected by the approval or disapproval of such application;
(kk) Except as disclosed in the related Mortgage Loan Data
Transmission, the related Mortgagor represented at the time of origination that
such Mortgagor would occupy such Mortgaged Property as such Mortgagor's primary
residence;
(ll) There has been no governmental or regulatory action or
third party claim made, instituted or threatened in writing with respect to such
Mortgaged Property relating to a violation of any applicable federal, state or
local environmental law, statute, ordinance, regulation, order, decree or
standard;
(mm) Such Mortgage Loan is eligible to be a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code assuming a REMIC
election were to be made and an Eligible Mortgage Loan;
(nn) With respect to any Second Lien Mortgage Loan:
(oo) the related Mortgagor has not received notice from the
holder of the prior mortgage that such prior mortgage is in default;
(pp) no consent from the holder of the prior mortgage is
needed for the creation of the related second lien Mortgage or, if required, has
been obtained and is in the related Servicing File;
(qq) if the prior mortgage has a negative amortization, the
Combined LTV was determined using the maximum loan amount of such prior
mortgage; and
(rr) the related first mortgage loan encumbering the related
Mortgaged Property does not have a mandatory future advance provision.
(ss) No error, omission, misrepresentation, negligence, fraud
or similar occurrence with respect to such 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 other party involved in the
origination of such Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;
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(tt) Such Mortgaged Property is in compliance with all
environmental laws, ordinances, rules, regulations and orders of federal, state
or governmental authorities relating thereto. No hazardous material has been or
is incorporated in, stored on or under (other than properly stored materials
used for reasonable residential purposes), released from, treated on,
transported to or from, or disposed of on or from, such Mortgaged Property such
that, under applicable law (A) any such hazardous material would be required to
be eliminated before such Mortgaged Property could be altered, renovated,
demolished or transferred, or (B) the owner of such Mortgaged Property, or the
holder of a security interest therein, could be subjected to liability for the
removal of such hazardous material or the elimination of the hazard created
thereby. Neither Borrower, the Company nor any Related Party has received
notification from any federal, state or other governmental authority relating to
any hazardous materials on or affecting such Mortgaged Property or to any
potential or known liability under any environmental law arising from the
ownership or operation of such Mortgaged Property. For the purposes of this
subsection, the term "hazardous materials" shall include, without limitation,
gasoline, petroleum products, explosives, radioactive materials, polychlorinated
biphenyls or related or similar materials, asbestos or any material containing
asbestos, lead, lead-based paint and any other substance or material as may be
defined as a hazardous or toxic substance by any federal, state or local
environmental law, ordinance, rule, regulation or order, including, without
limitation, CERCLA, the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and any
regulations promulgated pursuant thereto;
(uu) Such Mortgage Loan is not a loan the proceeds of which
were to be used for business purposes, except for those indicated by code in the
Mortgage Loan Data Transmission;
(vv) Such Mortgage Loan has not been made to limited or no
documentation borrowers unless such Mortgage Loan conforms to a limited or no
documentation program identified in the Approved Underwriting Guidelines;
(ww) Such Mortgage Loan is not cross-collateralized or
cross-defaulted except as has been disclosed to and approved by Lender in
writing;
(xx) Such Mortgage Loan is not (a) subject to the provisions
of the Homeownership and Equity Protection Act of 1994 as amended ("HOEPA"), (b)
a "high cost" mortgage loan, "covered" mortgage loan or "predatory" mortgage
loan or any other comparable term, no matter how defined, under any federal,
state or local law, or (c) subject to any comparable effective federal, state or
local statutes or regulations, including, without limitation, the provisions of
the Georgia Fair Lending Act, the City of Oakland, California Anti-Predatory
Lending Ordinance No. 12361 or any other statute or regulation providing
assignee liability to holders of such mortgage loans. The total combined points
and fees charged in connection with the origination of such consumer Mortgage
Loan does not exceed 8% of the original principal balance of such Mortgage Loan;
(yy) No predatory, abusive or deceptive lending practices,
including but not limited to, the extension of credit to the related Mortgagor
without regard for such Mortgagor's ability to repay such Mortgage Loan and the
extension of credit to a mortgagor which has no apparent benefit to such
Mortgagor, were employed in connection with the origination of such Mortgage
Loan;
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(zz) such Mortgage Loan complies with all applicable consumer
credit statutes and regulations, including, without limitation, the respective
Uniform Consumer Credit Code laws in effect in Colorado, Idaho, Indiana, Iowa,
Kansas, Maine, Oklahoma, South Carolina, Utah and Wyoming, has been originated
by a properly licensed entity or by an entity not required to be licensed in
certain states, as applicable, and in all other respects, complies with all of
the material requirements of any such applicable laws;
(aaa) The information set forth in the related Mortgage Loan
Schedule is complete, true and correct in all material respects and each
prepayment charge is permissible, enforceable and collectable under applicable
federal and state law;
(bbb) If such Mortgage Loan is secured by a Mortgaged Property
located in the State of Georgia, such Mortgage Loan was not originated prior to
March 7, 2003;
(ccc) Such Mortgage Loan is eligible for sale in the secondary
market or for inclusion in a pass-through transfer without unreasonable credit
enhancement;
(ddd) All points, fees and charges related to such Mortgage
Loan (whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of such Mortgage Loan) were
disclosed in writing to the related Mortgagor in accordance with applicable
state and federal law and regulation. Such Mortgagor was not charged "points and
fees" (whether or not financed) in an amount greater than 5% of the principal
amount of such Mortgage Loan;
(eee) Except as set forth on the related Mortgage Loan
Schedule, such Mortgage Loan is not subject to a prepayment penalty. If such
Mortgage Loan was originated prior to October 1, 2002 and is subject to a
prepayment penalty, such prepayment penalty does not extend beyond five years
after the date of origination. If such Mortgage Loan was originated on or
following October 1, 2002 and is subject to a prepayment penalty, such
prepayment penalty does not extend beyond three years after the date of
origination. If such Mortgage Loan contains a provision permitting imposition of
a premium upon a prepayment prior to maturity: [(i) prior to such Mortgage
Loan's origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction, (ii)
prior to such Mortgage Loan's origination, such Mortgagor was offered the option
of obtaining a Mortgage Loan that did not require payment of such a premium,]
(iii) the prepayment premium is disclosed to such Mortgagor in the loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, no Approved Mortgage Originator shall
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of such Mortgagor's default in making the loan
payments;
(fff) Each Approved Mortgage Originator has complied with all
applicable anti-money laundering laws and regulations, including without
limitation the USA Patriot Act of 2001, as amended (collectively, the
"Anti-Money Laundering Laws"); the Approved Mortgage Originator has established
an anti-money laundering compliance program as required by the Anti-Money
Laundering Laws, has conducted the requisite due diligence in connection with
the origination of such Mortgage Loan for purposes of the Anti-Money Laundering
Laws, including with respect to the legitimacy of the related Mortgagor and the
origin of the assets used by the such Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
such Mortgagor for purposes of the Anti-Money Laundering Laws;
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(ggg) Such Mortgage Loan is not secured by real property or
secured by a manufactured home located in the state of Georgia unless (x) such
Mortgage Loan was originated prior to October 1, 2002 or after March 6, 2003, or
(y) the property securing such Mortgage Loan is not, nor will be, occupied by
the related Mortgagor as such Mortgagor's principal dwelling. Such Mortgage Loan
is not a "High Cost Home Loan" as defined in the Georgia Fair Lending Act, as
amended (the "Georgia Act"). If such Mortgage Loan is a "Home Loan" under the
Georgia Act, such Mortgage Loan complies with all applicable provisions of the
Georgia Act. If such Mortgage Loan is secured by owner-occupied real property or
an owner-occupied manufactured home located in the State of Georgia, such
Mortgage Loan was originated (or modified) on or after October 1, 2002 and or
before March 6, 2003;
(hhh) The related Mortgagor was not encouraged or required to
select a Mortgage Loan product offered by such Mortgage Loan's originator which
is a higher cost product designed for less creditworthy borrowers, unless at the
time of such Mortgage Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt to income ratios for a lower cost credit
product then offered by such Mortgage Loan's originator or any affiliate of such
Mortgage Loan's originator;
(iii) The methodology used in underwriting the extension of
credit for such Mortgage Loan employs objective mathematical principles which
relate the related Mortgagor's income, assets and liabilities to the proposed
payment, and such underwriting methodology does not rely on the extent of such
Mortgagor's equity in the collateral as the principal determining factor in
approving such credit extension. Such underwriting methodology confirmed that at
the time of origination (application/approval) such Mortgagor had a reasonable
ability to make timely payments on such Mortgage Loan;
(jjj) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of such Mortgage Loan have been disclosed in
writing to the related Mortgagor in accordance with applicable state and federal
law and regulation;
(kkk) If such Mortgage Loan is secured by manufactured
housing, such Mortgage Loan satisfies the requirements for inclusion in
residential mortgage backed securities transactions rated by Standard & Poor's
Ratings Services;
(lll) The Mortgage File delivered to the Custodian pursuant to
the terms hereof with respect to such Mortgage Loan is complete in all material
respects; and
(mmm) No proceeds from such Mortgage Loan were used to finance
single-premium credit life insurance.
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(nnn) Unless such Mortgage Loan is a Wet Mortgage Loan, such
Mortgage Note, such Mortgage, such Assignment of Mortgage and any other
documents required to be delivered under the Custodial Agreement for such
Mortgage Loan have been delivered to the Custodian. The Borrower or its agent is
in possession of a complete, true and materially accurate Mortgage File for such
Mortgage Loan in compliance with the Custodial Agreement, except for such
documents the originals or copies of which have been delivered to the Custodian.
(ooo) Unless such Mortgage Loan has been assigned to MERS, the
assignment of such Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which such Mortgaged Property is
located.
(ppp) The related Mortgagor has not notified the Borrower, and
the Borrower has no knowledge of, any relief requested or allowed to such
Mortgagor under the Servicemembers' Civil Relief Act of 2003.
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SCHEDULE 2
REPRESENTATIONS AND WARRANTIES RE: SELLER
Each Seller represents and warrants to the Purchaser that:
(a) Existence. The Seller (a) is corporation duly incorporated, validly
existing and in good standing under the laws of the state of its incorporation,
(b) has all requisite corporate or other power, and has all governmental
licenses, authorizations, consents and approvals, necessary to own its assets
and carry on its business as now being or as proposed to be conducted, except
where the lack of such licenses, authorizations, consents and approvals would
not be reasonably likely to have a Material Adverse Effect; and (c) is qualified
to do business and is in good standing in all other jurisdictions in which the
nature of the business conducted by it makes such qualification necessary,
except where failure so to qualify would not be reasonably likely (either
individually or in the aggregate) to have a Material Adverse Effect, and (d) is
in compliance in all material respects with all Requirements of Law.
(b) Financial Condition. The Seller has heretofore furnished to the
Lender the related consolidated statements of income and retained earnings and
of cash flows for American Business Financial Services, Inc. and its
consolidated Subsidiaries for the one year period ending June 30, 2004, setting
forth comparative form the figures for the previous year. All such financial
statements are materially complete and correct and fairly present the
consolidated financial condition of the Seller and its Subsidiaries and the
consolidated results of their operations for the fiscal year ended on said date,
all in accordance with GAAP applied on a consistent basis. Except as disclosed
in the Loan Agreement, there has been no development or event nor any
prospective development or event which has had or should reasonably be expected
to have a Material Adverse Effect.
(c) Litigation. Except as disclosed in the Loan Agreement, there are no
actions, suits, arbitrations, investigations or proceedings pending or, to its
knowledge, threatened against the Seller or any of its Subsidiaries or affecting
any of the property thereof before any Governmental Authority, (i) as to which
individually or in the aggregate there is a reasonable likelihood of an adverse
decision which would be reasonably likely to have a Material Adverse Effect, or
(ii) which questions the validity or enforceability of this Agreement, the Loan
Documents or any action to be taken in connection with the transactions
contemplated hereby or thereby and there is a reasonable likelihood of a
materially adverse decision or a Material Adverse Effect. The disclosure of any
action, suit, arbitrations, investigations or proceedings in Schedule 6.03 of
the Loan Agreement shall not operate as a consent to such matter, or a waiver or
an amendment of any right, power, or remedy of Lender with respect to such
matter, including Lender's right to exercise its remedies in the event that any
matter listed on Schedule 6.03 of the Loan Agreement is, results in, or has a
Material Adverse Change or has a Material Adverse Effect.
(d) No Breach. Neither (a) the execution and delivery of this Agreement
or any of the other the Loan Documents nor (b) the consummation of the
transactions herein and therein contemplated in compliance with the terms and
provisions hereof and thereof, will conflict with or result in a breach of the
charter or by-laws of the Seller, or any applicable law, rule or regulation, or
any order, writ, injunction or decree of any Governmental Authority, or any
other instrument, indenture or other material agreement to which the Seller or
any of its Subsidiaries is a party or by which any of them or any of their
property is bound or to which any of them is subject, or constitute a default
under any such instrument, indenture or other material agreement, or (except for
the Liens created pursuant to the Loan Agreement) result in the creation or
imposition of any Lien upon any property of the Seller or any of its
Subsidiaries, pursuant to the terms of any such agreement or instrument.
(e) Action. The Seller has all necessary corporate or other power,
authority and legal right to execute, deliver and perform its obligations
hereunder and under each of the Loan Documents to which it is a party; the
execution, delivery and performance by the Seller of this Agreement and each of
the Loan Documents to which it is a party has been duly authorized by all
necessary corporate or other action on its part; and this Agreement and each
Loan Document to which it is a party has been duly and validly executed and
delivered by the Seller and constitutes a legal, valid and binding obligation of
the Seller, enforceable against it in accordance with its terms.
(f) Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority, or any other Person,
are necessary for the execution, delivery or performance by the Seller of this
Agreement, and each of the Loan Documents to which it is a party or for the
legality, validity or enforceability hereof and thereof, except for filings and
recordings in respect of the Liens created pursuant to the Loan Agreement.
(g) Taxes. The Seller and its Subsidiaries have filed all Federal
income tax returns and all other material tax returns that are required to be
filed by them and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by any of them, except for any such taxes, if any,
that are being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Seller and its
Subsidiaries in respect of taxes and other governmental charges are adequate.
(h) Investment Company Act. Neither the Seller nor any of its
Subsidiaries is an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended. Neither the Seller, nor any of its Subsidiaries is subject to any
Federal or state statute or regulation which limits its ability to incur
indebtedness.
(i) No Legal Bar. The execution, delivery and performance of this
Agreement, will not violate any Requirement of Law or Contractual Obligation of
the Seller or of any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien (other than the Liens created under the Loan
Agreement) on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation.
(j) No Default. Neither the Seller nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which should reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
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(k) Chief Operating Office. The Seller's chief executive office and
operating office on the Effective Date are located at the locations described in
the Loan Agreement.
(l) Location of Books and Records. The location where the Seller keeps
its books and records including all computer tapes and records relating to the
Assets is its chief executive office or chief operating office.
(m) Collateral; Collateral Security.
(i) Neither the Seller nor any of its Subsidiaries has
assigned, pledged, or otherwise conveyed or encumbered any Collateral (including
the Mortgage Loans) to any other Person other than the Purchaser. Immediately
prior to the pledge of any Mortgage Loan to the Purchaser, the Seller represents
that it is the sole owner of such Mortgage Loan and has good and marketable
title thereto, free and clear of all Liens, in each case except for Liens to be
released simultaneously with the Liens granted in favor of the Purchaser
hereunder and no Person other than the Purchaser has any Lien on any Mortgage
Loan.
(ii) The provisions of this Agreement are effective to create
in favor of the Purchaser a valid first priority security interest in all right,
title and interest of the Seller and its Subsidiaries in, to and under the
Collateral.
(iii) Upon receipt by the Purchaser of each Mortgage Note,
endorsed in blank by a duly authorized officer of the payee or last endorsee,
the Purchaser shall have a fully perfected first priority security interest
therein, in the Mortgage Loan evidenced thereby and in the mortgagee's interest
in the related Mortgaged Property.
(iv) Upon the filing of financing statements on Form UCC-1
naming the Purchaser as "Secured Party" and the Seller as "Debtor", and
describing the Collateral, in the jurisdictions and recording offices listed on
Schedule 6.12(d), the security interests granted hereunder in the Collateral
will constitute fully perfected, first priority security interests under the
Uniform Commercial Code in all right, title and interest of the Seller and its
Subsidiaries in, to and under such Collateral, which can be perfected by filing
under the Uniform Commercial Code.
(v) Pursuant to the Custodial Agreement, the Seller and its
Subsidiaries (or its predecessor in interest) have delivered to the Purchaser
the Mortgage File (including the Mortgage Note) relating to each Mortgage Loan
(other than any Wet Mortgage Loan) that is subject to the provisions of this
Loan Agreement.
(n) True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Seller to the Purchaser or the Lender in connection with the negotiation,
preparation or delivery of this Agreement, the Loan Agreement, the other Loan
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole, do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by or on
behalf of the Seller to the Purchaser or the Lender in connection with this
Agreement, the Loan Agreement, and the other Loan Documents and the transactions
contemplated hereby and thereby will be true, complete and accurate in every
material respect, or (in the case of projections) based on reasonable estimates,
on the date as of which such information is stated or certified. There is no
Material Adverse Change and no fact known to a Responsible Officer that, after
due inquiry, could reasonably be expected to have a Material Adverse Effect that
has not been disclosed herein, the Loan Agreement in the other Loan Documents or
in a report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Lender for use in connection with the transactions
contemplated hereby or thereby.
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(o) ERISA. Each Plan to which the Seller or its Subsidiaries make
direct contributions, and, to the knowledge of Seller, each other Plan and each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law. No event or
condition has occurred and is continuing as to which the Seller would be under
an obligation to furnish a report to the Lender under the Loan Agreement. No
accumulated funding deficiency (as defined in Section 412 of the Code or Section
302 of ERISA) has occurred with respect to any Plan. Neither the Seller nor any
ERISA Affiliate is subject to any present or potential liability under Title IV
of ERISA which, individually or in the aggregate, could have a Materially
Adverse Effect. No material liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Plan or trust established under
Title IV of ERISA has been, or is expected by the Seller or any ERISA Affiliate
to be, incurred by the Seller or any ERISA Affiliate. None of the Seller nor any
ERISA Affiliate has any contingent liability with respect to any post-retirement
benefit under any "welfare plan" (as defined in Section 3(1) of ERISA), other
than liability for continuation coverage under Part 6 of Title I of ERISA. No
lien under Section 412(n) of the Code or 302(f) of ERISA or requirement to
provide security under Section 401(a)(29) of the Code or Section 307 of ERISA
has been or is reasonably expected by the Seller or ERISA Affiliate to be
imposed on the assets of the Seller or any member ERISA Affiliate. Neither the
Seller nor any ERISA Affiliate has engaged in any transaction prohibited by
Section 408 of ERISA or Section 4975 of the Code. As of the Closing Date and
throughout the term of the Agreement, the Seller is not and will not be an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, and none of the assets of the Seller will constitute "plan
assets" of one or more such plans for purposes of Title I of ERISA or section
4975 of the Code.
(p) No Licenses. The Purchaser will not be required as a result of
acquiring title to the Assets hereunder to be licensed, registered or approved
or to obtain permits or otherwise qualify (i) to do business in any state in
which it currently is not so required or (ii) under any state consumer lending,
fair debt collection or other applicable state statute or regulation.
(q) Relevant States. The Seller is licensed (or exempt from licensing)
to originate Mortgage Loans in its own name or through brokers on the date of
this Agreement in all states where it originates Mortgage Loans.
(r) True Sales. Any and all interest of a Qualified Originator in, to
and under any Mortgage funded in the name of or acquired by such Qualified
Originator or seller which is an Affiliate of the Purchaser has been sold,
transferred, conveyed and assigned to the Seller pursuant to a legal sale and
such Qualified Originator retains no legal or equitable interest in such
Mortgage Loan, and if so requested by the Purchaser, is covered by an opinion of
counsel to that effect in form and substance acceptable to the Purchaser.
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(s) No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Seller or any of its Subsidiaries has been enacted or entered
into since the date of the financial statements previously delivered to the
Lender which would preclude Seller from continuing its operations consistent
with past practices or which is reasonably expected to have a Material Adverse
Effect.
(t) Subsidiaries. All of the Subsidiaries of the Seller at the date
hereof are listed on Schedule 6.22 to the Loan Agreement.
(u) Origination and Acquisition of Mortgage Loans. The Mortgage Loans
were either (i) originated by a Approved Mortgage Originator, and the
origination and collection practices used by the Approved Mortgage Originator,
any subsequent mortgagee and any servicer therefor, as applicable, with respect
to the Mortgage Loans have been, in all material respects, legal, proper,
prudent and customary in the residential mortgage loan servicing business, and
are in accordance with the Approved Underwriting Guidelines, or (ii) acquired by
the Seller in conformity with the Approved Underwriting Guidelines and under an
Approved Purchase Program.
(v) No Adverse Selection. Neither the Seller nor any of its
Subsidiaries used any selection procedures that identified the Mortgage Loans as
being less desirable or valuable than other comparable Mortgage Loans owned by
such party.
(w) No Broker. Neither the Seller nor any of its Subsidiaries has dealt
with any broker, investment banker, agent, or other person, except for the
Lender and SSG Capital Advisors, LP, who may be entitled to any commission or
compensation in connection with the financing of Mortgage Loans pursuant to the
Loan Agreement.
(x) Representations and Warranties Regarding Mortgage Loans; Delivery
of Mortgage Loan File. With respect to each Mortgage Loan (other than a Wet
Mortgage Loan), the Mortgage Note, the Mortgage, the Assignment of Mortgage and
any other documents required to be delivered under this Agreement for such
Mortgage Loan have been delivered to the Lender or the Custodian on behalf of
the Purchaser. The Seller and its Subsidiaries or its designee is in possession
of a complete, true and accurate Mortgage Loan File with respect to each
Mortgage Loan (other than a Wet Mortgage Loan), except for such documents the
originals of which have been delivered to the Custodian.
(y) Seller Solvent; Fraudulent Conveyance. As of the date hereof and
immediately following each Transfer Date after giving effect to the applicable
transfer, the fair value of the assets of the Seller is greater than the fair
value of its respective liabilities (including, without limitation, contingent
liabilities if and to the extent required to be recorded as a liability on the
financial statements of the Seller in accordance with GAAP), and the Seller is
and will be solvent, is and will be able to pay its debts as they mature and
does not and will not have an unreasonably small capital to engage in the
business in which it is engaged and proposes to engage. The Seller does not
intend to incur, nor believes that it has incurred, debts beyond its ability to
pay such debts as they mature. The Seller is not contemplating the commencement
of insolvency, bankruptcy, liquidation or consolidation proceedings or the
appointment of a receiver, liquidator, conservator, trustee or similar official
in respect of the Seller or any of its assets. The Seller is not transferring
any Mortgage Loans with any intent to hinder, delay or defraud any of its
respective creditors.
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS; CONSTRUCTION..................................................................2
Section 1.01 Definitions.......................................................................2
Section 1.02 Construction......................................................................2
ARTICLE II SALE OF ASSETS; PAYMENT OF PURCHASE PRICE..................................................2
Section 2.01 Sale of Assets to Purchaser.......................................................2
Section 2.02 Obligations of Sellers............................................................4
Section 2.03 Dispositions......................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH........................................5
Section 3.01 Sellers' Representations and Warranties...........................................5
ARTICLE IV SELLER COVENANTS...........................................................................6
Section 4.01 No Further Sale or Transfer.......................................................6
Section 4.02 Defense of Right, Title and Interest..............................................6
Section 4.03 Separateness Covenants............................................................6
Section 4.04 Further Assurances................................................................6
ARTICLE V PURCHASER COVENANTS........................................................................6
ARTICLE VI TERMINATION................................................................................7
Section 6.01 Termination.......................................................................7
ARTICLE VII MISCELLANEOUS PROVISIONS...................................................................7
Section 7.01 Amendment.........................................................................7
Section 7.02 Governing Law.....................................................................8
Section 7.03 Notices...........................................................................8
Section 7.04 Severability of Provisions........................................................9
Section 7.05 Counterparts......................................................................9
Section 7.06 Further Agreements................................................................9
Section 7.07 Recordation and Sales.............................................................9
Section 7.08 Successors and Assigns; Assignment of Purchase Agreement..........................9
Section 7.09 Survival..........................................................................9
TABLE OF CONTENTS
(continued)
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EXHIBIT A Form of APA Assignment
Schedule A Asset Schedule
Schedule 1 Representations and Warranties re: Mortgage Loans
Schedule 2 Representations and Warranties re: Seller
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