Exhibit 99.2
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc.
as Purchaser,
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Credit Corporation
as Mortgage Loan Seller,
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of February 1, 2003
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Table of Contents
Page
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ARTICLE I.
DEFINITIONS
Section 1.01. Definitions..................................................4
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of the Mortgage Loans...................................4
Section 2.02. Obligations of Mortgage Loan Seller Upon Sale................5
Section 2.03. Payment of Purchase Price for the Mortgage Loans.............7
Section 2.04. Sale of the Subsequent Mortgage Loans........................7
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Mortgage Loan Seller Representations and Warranties..........7
Section 3.02. Mortgage Loan Seller Representations and Warranties
Relating to the Mortgage Loans...............................9
Section 3.03. Repurchase or Substitution of the Mortgage Loans in Case
of Breach of Representations and Warranties.................16
Section 3.04. Purchaser Representation and Warrants.......................16
ARTICLE IV.
MORTGAGE LOAN SELLER'S COVENANTS
Section 4.01. Covenants of the Mortgage Loan Seller.......................17
Section 4.02. Covenant of the Mortgage Loan Seller Concerning Payment
of Expenses.................................................18
ARTICLE V.
SERVICING
Section 5.01. Servicing...................................................18
ARTICLE VI.
TERMINATION
Section 6.01. Termination.................................................18
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ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment...................................................18
Section 7.02. Governing Law...............................................19
Section 7.03. Notices.....................................................19
Section 7.04. Severability of Provisions..................................19
Section 7.05. Counterparts................................................19
Section 7.06. Further Agreements..........................................19
Section 7.07. Successors and Assigns: Assignment of Purchase Agreement....20
Section 7.08. Survival....................................................20
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MORTGAGE LOAN PURCHASE AGREEMENT, dated as of February 1, 2003 (this
"Agreement"), between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Credit Corporation, a
Delaware corporation (the "Mortgage Loan Seller"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Capital I Inc., a Delaware corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Mortgage Loan Seller is the owner of the notes or other
evidence of indebtedness (the "Mortgage Notes") so indicated on Schedule I
hereto, and Related Documentation (as defined below) (collectively, the
"Mortgage Loans"); and
WHEREAS, the Mortgage Loan Seller owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including but not limited to rights to (a) acquire property by
foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds
of any insurance policies in respect of the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Mortgage Loan Seller sell
the Mortgage Loans to the Purchaser pursuant to the terms of this Agreement;
and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement
dated as of February 1, 2003 (the "Pooling and Servicing Agreement") among the
Purchaser, as depositor, the Mortgage Loan Seller, as Mortgage Loan Seller and
servicer, and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee (the "Trustee"),
the Purchaser will convey the Mortgage Loans to the Trust Fund.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions. Capitalized terms used but not defined
herein shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.
ARTICLE II.
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01. Sale of the Mortgage Loans. The Mortgage Loan Seller,
concurrently with the execution and delivery of this Agreement, does hereby
sell, assign, set over, and otherwise convey to the Purchaser, without
recourse (except as otherwise provided herein), all of its right, title and
interest in, to and under the following, whether now existing or hereafter
created: (i) each Mortgage Loan, including, without limitations, the related
Mortgage File and all
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collections in respect thereof received after the Cut-off Date; (ii) property
that secures a Mortgage Loan that is acquired by foreclosure or deed in lieu
of foreclosure; (iii) the interest of the Mortgage Loan Seller in any
insurance policies in respect of the Mortgage Loans; (iv) all rights under any
guaranty executed in connection with a Mortgage Loan; (v) the security
interest of the Mortgage Loan Seller in and to any Additional Collateral for
the FlexSource(TM) Loans and the Mortgage Loan Seller's rights under the
pledge and security agreement and the account control agreement for each
FlexSource(TM) Loan; (vi) all reserve accounts, lockbox accounts, escrow
accounts and other accounts with respect to the Mortgage Loan and (vii) all
proceeds of the foregoing.
Section 2.02. Obligations of Mortgage Loan Seller Upon Sale. In
connection with any transfer pursuant to Section 2.01 hereof, the Mortgage
Loan Seller further agrees, at its own expense, on or prior to the Closing
Date, (a) to indicate in its books and records that the Mortgage Loans have
been sold to the Purchaser, pursuant to this Agreement and (b) to deliver to
the Purchaser a Mortgage Loan Schedule containing a true and complete list of
all such Mortgage Loans specifying for each such Mortgage Loan, among other
things, as of the Cut-Off Date (i) its account number and (ii) the related
balance as of the Cut-Off Date. Such Mortgage Loan Schedule is attached to the
Pooling and Servicing Agreement as Exhibits A-1 and A-2 and shall also be
marked as Schedule I to this Agreement and is hereby incorporated into and
made a part of this Agreement.
The Mortgage Loan Seller agrees to prepare, execute and file a UCC-1
financing statement with the Secretary of State in the State of Illinois
(which shall have been filed on or before the Closing Date with respect to the
Mortgage Loans) describing the applicable Mortgage Loans and naming the
Mortgage Loan Seller as debtor and the Purchaser as secured party (and
indicating that such loans have been assigned to the Trustee) and all
necessary continuation statements and any amendments to the UCC-1 financing
statements required to reflect a change in the name or corporate structure of
the Mortgage Loan Seller or the filing of any additional UCC-1 financing
statements due to the change in the principal offices of the Mortgage Loan
Seller, and as are necessary to perfect and protect the Trustee's interest in
each Mortgage Loan and the proceeds thereof.
With respect to each FlexSource(TM) Loan, within ninety (90) days of
the Closing Date the Depositor shall to the extent required under the Pooling
and Servicing Agreement to the Trustee a UCC-3 statement giving notice of the
assignment of the related security interest to the Trust Fund and the Servicer
shall thereafter cause the timely filing of all necessary continuation
statements with regard to such financing statements.
In connection with any conveyance by the Mortgage Loan Seller, the
Mortgage Loan Seller will deliver to the Trustee, on behalf of the Purchaser,
the following documents or instruments with respect to each Mortgage Loan (the
"Related Documentation"):
(i) the original or, if accompanied by a "lost note" affidavit,
a copy of the Mortgage Note endorsed in blank or to the order of the
Trustee;
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(ii) the original recorded Mortgage or, if, in connection with
any Mortgage Loan, the original recorded Mortgage with evidence of
recording thereon cannot be delivered on or prior to the Closing
Date because of a delay caused by the public recording office where
such original Mortgage has been delivered for recordation or because
such original Mortgage has been lost, the Mortgage Loan Seller shall
deliver or cause to be delivered to the Trustee, a true and correct
copy of such Mortgage (i) certified by the Mortgage Loan Seller or
(ii) in the case of an original Mortgage that has been lost,
together with a certificate by the appropriate county recording
office where such Mortgage is recorded;
(iii) if applicable, the original intervening assignments, if
any ("Intervening Assignments"), with evidence of recording thereon,
showing a complete chain of title to the Mortgage from the
originator to the Mortgage Loan Seller or, if any such original
Intervening Assignment has not been returned from the applicable
recording office or has been lost, a true and correct copy thereof,
together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Mortgage Loan
Seller stating that such original Intervening Assignment has been
dispatched to the appropriate public recording official for
recordation or (ii) in the case of an original Intervening
Assignment that has been lost, a certificate by the appropriate
county recording office where such Mortgage is recorded;
(iv) the original policy of title insurance (or a commitment
for title insurance, if the policy is being held by the title
insurance company pending recordation of the Mortgage);
(v) the original of any guaranty executed in connection with
the Mortgage Note;
(vi) the original of each assumption, modification,
consolidation or substitution agreement, if any, relating to the
Mortgage Loan;
(vii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage; and
(viii) all related FlexSource(TM)documents.
The Mortgage Loan Seller shall cause the Assignments of Mortgage with
respect to each mortgage loan to be prepared, completed in blank and delivered
to the Trustee, on behalf of the Purchaser, no later than the 45th day
following the Closing Date. To the extent the recording information with
respect to the related Mortgage has not been received from the related
recording office, an Assignment of Mortgage may omit such recording
information. If (a) the short-term senior unsecured debt rating of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co. by Standard & Poor's is reduced below "A-1" or (b)
the long-term senior unsecured debt obligations of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
& Co. are downgraded below a rating of "A3" by ▇▇▇▇▇'▇ or "A-" by
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Standard & Poor's, the Mortgage Loan Seller shall cause the Assignments
of Mortgage as so completed to be delivered for recording (which may
be a blanket assignment if permitted by applicable law) in the appropriate
public office for real property records within 60 days of the occurrence of
such event, except that the Mortgage Loan Seller need not cause to be recorded
any Assignment of Mortgage which relates to a Mortgage Loan in any
jurisdiction under the laws of which the recordation of such assignment is not
necessary to protect the Trustee's and the Certificateholders' interest in the
related Mortgage Loan.
The Mortgage Loan Seller further hereby confirms to the Purchaser
that, as of the Closing Date, it has caused the records of the Mortgage Loan
Seller relating to the Mortgage Loans maintained by the Mortgage Loan Seller
to be clearly and unambiguously marked to indicate that the Mortgage Loans
have been sold to the Purchaser.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to this Section 2.02.
The parties hereto intend to treat the transfer of the Mortgage Loans
as provided herein as a sale for accounting and other purposes, by the
Mortgage Loan Seller to the Purchaser of all the Mortgage Loan Seller's right,
title and interest in and to the Mortgage Loans and other property described
above. In the event such transfer is deemed not to be a sale, the Mortgage
Loan Seller hereby grants to the Purchaser a security interest in all of the
Mortgage Loan Seller's right, title and interest in, to and under the Mortgage
Loans and other property described above, whether now existing or hereafter
created, to secure all of the Mortgage Loan Seller's obligations hereunder;
and this Agreement shall constitute a security agreement under applicable law.
Section 2.03. Payment of Purchase Price for the Mortgage Loans. In
consideration of the sale of the Mortgage Loans from the Mortgage Loan Seller
to the Purchaser on the Closing Date, the Purchaser agrees (a) to pay to the
Mortgage Loan Seller on the Closing Date by transfer of immediately available
funds, an amount equal to $[ ] (the "Purchase
Price") and (b) to deliver the Class A-R Certificates.
Section 2.04. Sale of the Subsequent Mortgage Loans. The Purchaser
does hereby agree to purchase and the Mortgage Loan Seller does hereby agree
to sell, assign, set over and otherwise convey to the Purchaser, all of its
right, title and interest in, to and under the Subsequent Mortgage Loans
pursuant to Section 2.03 of the Pooling and Servicing Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.01. Mortgage Loan Seller Representations and Warranties. The
Mortgage Loan Seller represents and warrants to the Purchaser as of the
Closing Date:
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(i) The Mortgage Loan Seller is a Delaware corporation, validly
existing and in good standing under the laws of the State of
Delaware, and has the corporate power to own its assets and to
transact the business in which it is currently engaged. The Mortgage
Loan Seller is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the character
of the business transacted by it or any properties owned or leased by
it requires such qualification and in which the failure to so qualify
would have a material adverse effect on the business, properties,
assets, or condition (financial or other) of the Mortgage Loan
Seller;
(ii) The Mortgage Loan Seller has the power and authority to
make, execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of
the Mortgage Loan Seller enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and by the availability of equitable remedies;
(iii) The Mortgage Loan Seller is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or
authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be, prior to the Closing Date;
(iv) The execution, delivery and performance of this Agreement
by the Mortgage Loan Seller will not violate any provision of any
existing law or regulation or any order or decree of any court
applicable to the Mortgage Loan Seller or any provision of the
Certificate of Incorporation or Bylaws of the Mortgage Loan Seller,
or constitute a material breach of any mortgage, indenture, contract
or other agreement to which the Mortgage Loan Seller is a party or by
which the Mortgage Loan Seller may be bound; and
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the
knowledge of the Mortgage Loan Seller threatened, against the
Mortgage Loan Seller or any of its properties or with respect to this
Agreement which in the opinion of the Mortgage Loan Seller has a
reasonable likelihood of resulting in a material adverse effect on
the transactions contemplated by this Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive the sale and assignment of the
Mortgage Loans to the Purchaser, but the Mortgage Loan Seller shall have no
further obligations hereunder upon termination of this Agreement pursuant to
Section 6.01. The Mortgage Loan Seller shall cure a breach of any
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representations and warranties in accordance with the Pooling and Servicing
Agreement. It is understood and agreed that the remedy specified in the
Pooling and Servicing Agreement shall constitute the sole remedy against the
Mortgage Loan Seller respecting such breach.
Section 3.02. Mortgage Loan Seller Representations and Warranties
Relating to the Mortgage Loans. The Mortgage Loan Seller represents and
warrants to the Purchaser as of the Cut-off Date, unless otherwise specifically
set forth herein, with respect to the Mortgage Loans, or each Mortgage Loan,
as the case may be:
(i) The information set forth in the Mortgage Loan Schedule
(Schedule I to this Agreement) was true and correct in all material
respects at the date or dates respecting which such information is
furnished as specified in the Mortgage Loan Schedule;
(ii) Immediately prior to the transfer and assignment
contemplated herein, the Mortgage Loan Seller was the sole owner and
holder of the Mortgage Loan free and clear of any and all liens,
pledges, charges or security interests of any nature and has full
right and authority to sell and assign the same and immediately
following the transfer and assignment contemplated by the Pooling and
Servicing Agreement, the trust will be the sole owner and holder of
the Mortgage Loan free and clear of any and all liens, pledges,
charges or security interests of any nature and has full right and
authority to sell and assign the same;
(iii) The Mortgage is a valid, subsisting and enforceable first
lien on the property therein described, and the Mortgaged Property is
free and clear of all encumbrances and liens having priority over or
parity with the first lien of the Mortgage except for liens for real
estate taxes and special assessments not yet due and payable and
liens or interests arising under or as a result of any federal, state
or local law, regulation or ordinance relating to hazardous wastes or
hazardous substances, and, if the related Mortgaged Property is a
condominium unit, any lien for common charges permitted by statute or
homeowners association fees; and if the Mortgaged Property consists
of shares of a cooperative housing corporation, any lien for amounts
due to the cooperative housing corporation for unpaid assessments or
charges or any lien of any assignment of rents or maintenance
expenses secured by the real property owned by the cooperative
housing corporation; and any security agreement, chattel mortgage or
equivalent document related to, and delivered to the Trustee with,
any Mortgage that establishes in the Mortgage Loan Seller a valid and
subsisting first lien on the property described therein and which
respect to which the Mortgage Loan Seller has full right to sell and
assign the same to the Trustee;
(iv) Neither the Mortgage Loan Seller nor any prior holder of
the Mortgage or the related Mortgage Note has modified the Mortgage
or the related Mortgage Note in any material respect, satisfied,
canceled or subordinated the Mortgage in whole or in part, released
the Mortgaged Property in whole or in part from the lien of the
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Mortgage, or executed any instrument of release, cancellation,
modification or satisfaction (except to the extent set forth in any
assumption, modification, consolidation or substitution agreement
included in the related Mortgage File), except that a Mortgage Loan
may have been modified by a written instrument which has been
recorded, if necessary to protect the interests of the owner of such
Mortgage Loan, and which has been delivered to the Trustee;
(v) With respect to those Mortgage Loans which are required to
deposit funds into an escrow account for payment of taxes,
assessments, insurance premiums and similar items as they become due,
all escrow deposits have been collected, are under the control of
Mortgage Loan Seller, and have been applied by Mortgage Loan Seller
to the payment of such items in a timely fashion, in accordance with
such Mortgage. With respect to those Mortgage Loans for which escrow
deposits are not required there are no delinquent taxes or other
outstanding charges affecting the related Mortgaged Property which
constitute a lien on the related Mortgaged Property; and the Mortgage
Loan Seller has not advanced funds, or received any advance of funds
by a party other than the Mortgagor, directly or indirectly for the
payment of any amount required by the Mortgage, except for interest
accruing from the date of the Mortgage Note or date of disbursement
of the Mortgage Loan proceeds, whichever is later, to the day which
precedes by thirty days the first Due Date under the related Mortgage
Note;
(vi) To the best of the Mortgage Loan Seller's knowledge, the
Mortgaged Property is undamaged by water, fire, earthquake, earth
movement other than earthquake, windstorm, flood, tornado or similar
casualty, so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the
premises were intended or any such damage is covered by a hazard
insurance policy in effect with respect to such property, and there
is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property;
(vii) The Mortgaged Property is free and clear of all
mechanics' and materialmen's liens or liens in the nature thereof;
provided, however, that this warranty shall be deemed not to have
been made at the time of the initial issuance of the Certificates if
a title policy affording, in substance, the same protection afforded
by this warranty is furnished to the Trustee by the Mortgage Loan
Seller;
(viii) The Mortgaged Property consists of a fee simple estate
in real property or leasehold estate; all of the improvements which
are included for the purpose of determining the appraised value of
the Mortgaged Property lie in all material respects wholly within the
boundaries and building restriction lines of such property and no
improvements on adjoining properties encroach in any material respect
upon the Mortgaged Property (unless insured against under the related
title insurance policy); and the Mortgaged Property and all
improvements thereon comply in all material
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respects with all requirements of any applicable zoning and
subdivision laws and ordinances; with respect to Mortgage Loans that
are secured by a leasehold estate, to the Mortgage Loan Seller's
knowledge: (i) the lease is valid, in full force and effect, and
conforms to all of ▇▇▇▇▇▇ Mae's requirements for leasehold estates;
(ii) all rents and other payments due under the lease have been paid;
(iii) the lessee is not in default under any provision of the lease;
(iv) the term of the lease exceeds the maturity date of the related
Mortgage Loan by at least ten (10) years; and (v) the terms of the
lease provide a Mortgage with an opportunity to cure any defaults.
(ix) The Mortgage Loan meets, or is exempt from, applicable
state or federal laws, regulations and other requirements, pertaining
to usury, and the Mortgage Loan is not usurious;
(x) All material inspections, licenses and certificates
required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy
of the same, including, but not limited to, certificates of occupancy
and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(xi) No Mortgage Loan is more than 30 days delinquent as of the
Cut-off Date;
(xii) The Mortgage Note, the related Mortgage and other
agreements executed in connection therewith 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 or other
similar laws affecting the enforcement of creditors' rights generally
and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and
all parties to the Mortgage Note and the Mortgage had legal capacity
to execute the Mortgage Note and the Mortgage and each Mortgage Note
and Mortgage has been duly and properly executed by the Mortgagor;
(xiii) Any and all requirements of any federal, state or local
law with respect to the origination of the Mortgage Loans including,
without limitation, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the Mortgage Loans have been complied
with in all material respects;
(xiv) The proceeds of the Mortgage Loans have been fully
disbursed, there is no requirement for future advances thereunder and
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 in all material respects (except for escrow
funds for exterior items which could not be completed due to
weather); and all material costs, fees and expenses incurred in
making, closing or recording the
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Mortgage Loan have been paid, except recording fees with
respect to Mortgages not recorded as of the Closing Date;
(xv) The Mortgage Loan is covered by an American Land Title
Association mortgagee title insurance policy or other generally
acceptable form of policy or insurance acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac insuring the originator, its successors and assigns, as
to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan and subject only to (A) the lien of
current real property taxes and assessments not yet due and payable,
(B) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording of
such Mortgage acceptable to mortgage lending institutions in the area
in which the Mortgaged Property is located or specifically referred
to in the appraisal performed in connection with the origination of
the related Mortgage Loan, (C) liens created pursuant to any federal,
state or local law, regulation or ordinance affording liens for the
costs of clean-up of hazardous substances or hazardous wastes or for
other environmental protection purposes and (D) such other matters to
which like properties are commonly subject which do not individually,
or in the aggregate, materially interfere with the benefits of the
security intended to be provided by the Mortgage; the Mortgage Loan
Seller is the sole insured of such mortgagee title insurance policy,
the assignment to the Trustee, of the Mortgage Loan Seller's interest
in such mortgagee title insurance policy does not require any consent
of or notification to the insurer which has not been obtained or
made, such mortgagee title insurance policy is in full force and
effect and will be in full force and effect and inure to the benefit
of the Trustee, no claims have been made under such mortgagee title
insurance policy, and neither the Mortgage Loan Seller nor any other
prior holder of the related Mortgage has done, by act or omission,
anything which would impair the coverage of such mortgagee title
insurance policy;
(xvi) The Mortgaged Property securing each Mortgage Loan is
insured against loss by fire and such hazards as are covered under a
standard extended coverage endorsement, in an amount which is not
less than the lesser of 100% of the insurable value of the Mortgaged
Property and the outstanding principal balance of the Mortgage Loan,
but in no event less than the minimum amount necessary to fully
compensate for any damage or loss on a replacement cost basis; if the
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the project; if upon
origination of the Mortgage Loan, the improvements on the Mortgaged
Property were reported in the appraisal to be in an area identified
in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least
of (A) the outstanding principal balance of the
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Mortgage Loan, (B) the full insurable value of the Mortgaged
Property and (C) the maximum amount of insurance which was available
under the National Flood Insurance Act of 1968, as amended; and each
Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's cost and expense;
(xvii) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related 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 a default,
breach, violation or event of acceleration; the Mortgage Loan Seller
has not waived any default, breach, violation or event of
acceleration and has not commenced any foreclosure action with
respect to the Mortgage Loan;
(xviii) No Mortgage Note or Mortgage is subject to any right of
rescission, set-off, counterclaim or defense, including the defense
of usury, nor will the operation of any of the terms of the Mortgage
Note or Mortgage, or the exercise of any right thereunder, render the
Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject it 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;
(xix) Each Mortgage Note is payable in monthly payments,
resulting in complete amortization of the Mortgage Loan over a term
of not more than 360 months;
(xx) Each Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property
of the benefits of the security, including realization by judicial
foreclosure (subject to any limitation arising from any bankruptcy,
insolvency or other law for the relief of debtors), and there is no
homestead or other exemption available to the Mortgagor which would
interfere with such right of foreclosure;
(xxi) No Mortgagor is a debtor in any state or federal
bankruptcy or insolvency proceeding;
(xxii) Each Mortgaged Property is located in the United States
and consists of a one- to four-unit residential property, which may
include a detached home, townhouse, condominium unit or a unit in a
planned unit development;
(xxiii) The Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;
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(xxiv) With respect to each Mortgage where a lost note
affidavit has been delivered to the Trustee in place of the related
Mortgage Note, the related Mortgage Note is no longer in existence;
and
(xxv) Each Mortgage Loan was originated by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act, a savings and loan
bank, a commercial bank, a credit union, an insurance company, or a
similar institution which is supervised and examined by a federal or
state authority.
(xxvi) The Mortgage Loan Seller has caused and will cause to be
performed any and all acts required to be performed to preserve the
rights and remedies of the Trustee in any insurance policies
applicable to each Mortgage Loan, including any necessary
notifications of insurers, assignments of policies or interests
therein, and establishment of co-insured, joint loss payee and
mortgagee rights in favor of the Trustee;
(xxvii) Each original Mortgage has been recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage (other than the assignment from the Mortgage Loan
Seller to the Trustee and any assignment to the Mortgage Loan Seller
or an affiliate thereof or except as provided in the Pooling and
Servicing Agreement) have been recorded in the appropriate
jurisdictions as to which no Opinion of Counsel was delivered
pursuant to Section 2.02 hereof or such Mortgages and assignments are
in the process of being recorded);
(xxviii) No Mortgage Note (other than a FlexSource(TM) Loan, as
provided in the Pooling and Servicing Agreement) is or has been
secured by any collateral, pledged account or other security other
than the lien of the corresponding Mortgage;
(xxix) No Mortgage Loan was originated under a buydown plan;
(xxx) No Mortgage Loan has a shared appreciation feature or
other contingent interest feature;
(xxxi) Each Mortgage Loan contains a provision for the
acceleration of the payment of the unpaid principal balance of such
Mortgage Loan in the event the related Mortgaged Property is sold
without the prior consent of the mortgagee thereunder;
(xxxii) Any advances made to the Mortgagor after the date of
origination of a Mortgage Loan but prior to the related Cut-off Date
have been consolidated with the outstanding principal amount secured
by the related Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term
reflected on the Mortgage Loan Schedule. The consolidated principal
amount as
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of the related Cut-off Date does not exceed the original
principal amount of the related Mortgage Loan and is reflected as the
current principal amount of such Mortgage Loan on the Mortgage Loan
Schedule;
(xxxiii) With respect to each Mortgage that is 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 the
Certificateholders or the Trust to any trustee under any deed of
trust, except in connection with a trustee's sale after default by
the related Mortgagor;
(xxxiv) Approximately 88.16% of the Stated Principal Balance of
the Initial Mortgage Loans are secured by Mortgaged Properties that
are maintained by the related Mortgagors as primary residences;
(xxxv) No Mortgage Loan was selected by the Mortgage Loan
Seller for inclusion in the Trust on any basis intended to adversely
affect the Trust;
(xxxvi) A full appraisal of each Mortgaged Property was
performed in connection with the origination of the related Mortgage
Loan, and such appraisal is the appraisal referred to in determining
the Loan-to-Value Ratio of such Mortgaged Property;
(xxxvii) The Mortgage Loan Seller has not required the
Mortgagor to sign a letter in connection with the origination of any
Mortgage Loan in which such Mortgagor indicates its inability to
repay such Mortgage Loan in accordance with the terms of the related
Mortgage Note;
(xxxviii) As of the related Cut-off Date no Mortgage Loan was
secured by more than one Mortgaged Property;
(xxxix) All insurance policies, other than any primary mortgage
insurance policies purchased by the Mortgage Loan Seller or Servicer
or any of its affiliates, are the valid and binding obligation of the
insurer and contain a standard mortgagee clause naming the
originator, its successors and assigns, as mortgagee. Such insurance
policies require prior notice to the insured of termination or
cancellation and no such notice has been received, each Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to
do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(xl) All Mortgage Loans were underwritten or re-underwritten in
accordance with the underwriting guidelines of the Mortgage Loan
Seller;
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(xli) There was no fraud involved in the origination of any
Mortgage Loans by the mortgagee or the Mortgagor; and
(xlii) Each Mortgage Loan at the time it was made complied in
all material respects with applicable local, state, and federal laws,
including, but not limited to, all applicable predatory and abusive
lending laws.
Notwithstanding the foregoing, no representations or
warranties are made by the Mortgage Loan Seller as to the environmental
condition of any Mortgaged Property; the absence, presence or effect of
hazardous wastes or hazardous substances on any Mortgaged Property; any
casualty resulting from the presence or effect of hazardous wastes or
hazardous substances on, near or emanating from any Mortgaged Property; the
impact on Certificateholders of any environmental condition or presence of any
hazardous substance on or near any Mortgaged Property; or the compliance of
any Mortgaged Property with any environmental laws, nor is any agent, person
or entity otherwise affiliated with the Mortgage Loan Seller authorized or
able to make any such representation, warranty or assumption of liability
relative to any Mortgaged Property. In addition, no representations or
warranties are made by the Mortgage Loan Seller with respect to the absence or
effect of fraud in the origination of any Mortgage Loan.
It is understood and agreed that the representations and
warranties set forth in this Section 3.02 shall survive delivery of the
respective Mortgage Files to the Trustee and shall inure to the benefit of the
Trustee, notwithstanding any restrictive or qualified endorsement or
assignment.
Section 3.03. Repurchase or Substitution of the Mortgage Loans
in Case of Breach of Representations and Warranties. Upon discovery by either
the Mortgage Loan Seller, Servicer or the Trustee that any of the
representations and warranties made in Section 3.02 above is not accurate
(referred to herein as a "breach") and that such breach materially and
adversely affects the value of the related Mortgage Loan or the interests of
the Certificateholders, in the related Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties. Within 90
days of the earlier of its discovery or its receipt of notice of any such
breach, the Mortgage Loan Seller shall cure such breach in all material
respects or shall either repurchase, or substitute for, the Mortgage Loan or
any property acquired in respect thereof from the Trust Fund pursuant to the
terms of the Pooling and Servicing Agreement. It is understood and agreed that
the obligation of the Mortgage Loan Seller to repurchase or substitute for any
Mortgage Loan or property as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such breach available
to Certificateholders or the Trustee on behalf of Certificateholders, and such
obligation shall survive until termination of the Trust Fund under Article X
of the Pooling and Servicing Agreement.
Section 3.04. Purchaser Representation and Warrants. The Purchaser
represents and warrants to the Mortgage Loan Seller as of the Closing Date:
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(i) The Purchaser is a Delaware corporation, validly existing
and in good standing under the laws of the State of Delaware, and has
the corporate power to own its assets and to transact the business in
which it is currently engaged. The Purchaser is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it
or any properties owned or leased by it requires such qualification
and in which the failure so to qualify would have a material adverse
effect on the business, properties, assets, or condition (financial
or other) of the Purchaser;
(ii) The Purchaser has the power and authority to make,
execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of
the Purchaser enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and by the availability of equitable remedies;
(iii) The Purchaser is not required to obtain the consent of
any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement,
except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as
the case may be, prior to the Closing Date;
(iv) The execution, delivery and performance of this Agreement
by the Purchaser will not violate any provision of any existing law
or regulation or any order or decree of any court applicable to the
Purchaser or any provision of the Certificate of Incorporation or
Bylaws of the Purchaser, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which the
Purchaser is a party or by which the Purchaser may be bound; and
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the
knowledge of the Purchaser threatened, against the Purchaser or any
of its properties or with respect to this Agreement which in the
opinion of the Purchaser has a reasonable likelihood of resulting in
a material adverse effect on the transactions contemplated by this
Agreement.
ARTICLE IV.
MORTGAGE LOAN SELLER'S COVENANTS
Section 4.01. Covenants of the Mortgage Loan Seller. The Mortgage
Loan Seller hereby covenants that except for the transfer hereunder, the
Mortgage Loan Seller will not sell,
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pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on any Mortgage Loan, or any interest
therein; the Mortgage Loan Seller will notify the Trustee, as assignee of the
Purchaser, of the existence of any lien on any Mortgage Loan immediately upon
discovery thereof; and the Mortgage Loan Seller will defend the right, title
and interest of the Trustee, as assignee of the Purchaser, in, to and under
the Mortgage Loans, against all claims of third parties claiming through or
under the Mortgage Loan Seller; provided, however, that nothing in this
Section 4.01 shall prevent or be deemed to prohibit the Mortgage Loan Seller
from suffering to exist upon any of the Mortgage Loans any liens for municipal
or other local taxes and other governmental charges if such taxes or
governmental charges shall not at the time be due and payable or if the
Mortgage Loan Seller shall currently be contesting the validity thereof in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto.
Section 4.02. Covenant of the Mortgage Loan Seller Concerning
Payment of Expenses. The Mortgage Loan Seller hereby covenants that it shall
reimburse the Purchaser for all out-of-pocket expenses (including the fees and
disbursements of its counsel) reasonably incurred by the Purchaser in
connection with the performance of this Agreement.
ARTICLE V.
SERVICING
Section 5.01. Servicing. The Mortgage Loan Seller will be the
Servicer of the Mortgage Loans pursuant to the terms and conditions of the
Pooling and Servicing Agreement.
ARTICLE VI.
TERMINATION
Section 6.01. Termination. The respective obligations and
responsibilities of the Mortgage Loan Seller and the Purchaser created hereby,
including but not limited to any obligations with respect to breaches of
representations and warranties made herein, shall terminate upon the
termination of the Trust Fund as provided in Article XI of the Pooling and
Servicing Agreement.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment. This Agreement may be amended from time to
time by the Mortgage Loan Seller and the Purchaser by written agreement signed
by the Mortgage Loan Seller and the Purchaser.
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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.
Section 7.03. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid,
addressed as follows:
(i) if to the Mortgage Loan Seller:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Credit Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel with copies to:
the Senior Vice President Financial and Credit Risk Management
or, such other address as may hereafter be furnished to the Purchaser in
writing by the Mortgage Loan Seller.
(ii) if to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Capital I 2003-HYB1 Trust
or such other address as may hereafter be furnished to the Mortgage Loan
Seller 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
of 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. The Purchaser and the Mortgage Loan
Seller each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or reasonable and
appropriate to effectuate the purposes of this Agreement
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or in connection with the issuance of any series of Investor Certificates
representing interests in the Mortgage Loans.
Section 7.07. Successors and Assigns: Assignment of Purchase
Agreement. This Agreement shall bind and inure to the benefit of and be
enforceable by the Mortgage Loan Seller, the Purchaser and the Trustee. The
obligations of the Mortgage Loan Seller under this Agreement cannot be
assigned or delegated to a third party without the consent of the Purchaser,
except that the Purchaser acknowledges and agrees that the Mortgage Loan
Seller may assign its obligations hereunder to any Person into which the
Mortgage Loan Seller is merged or any corporation resulting from any merger,
conversion or consolidation to which the Mortgage Loan Seller is a party or
any Person succeeding to the business of the Mortgage Loan Seller. The parties
hereto acknowledge that the Purchaser is acquiring the Mortgage Loans for the
purpose of contributing them to a trust that will issue a series of
Certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Mortgage Loan
Seller acknowledges and consents to the assignment by the Purchaser to the
Trustee of all of the Purchaser's rights against the Mortgage Loan Seller
pursuant to this Agreement and to the enforcement or exercise of any right or
remedy against the Mortgage Loan Seller pursuant to this Agreement by the
Trustee under the Pooling and Servicing Agreement. Such enforcement of a right
or remedy by the Trustee shall have the same force and effect as if the right
or remedy had been enforced or exercised by the Purchaser directly.
Section 7.08. Survival. The representations and warranties set forth
in Article III shall survive the purchase of the Mortgage Loans hereunder.
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IN WITNESS WHEREOF, the Mortgage Loan Seller and the Purchaser have
caused their names to be signed to this Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CAPITAL I INC.,
as Purchaser
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CREDIT
CORPORATION, as Mortgage Loan Seller
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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Schedule I
1