MORTGAGE LOAN SALE AGREEMENT
IHE FUNDING CORP.
PURCHASER
and
▇▇▇▇▇ UNION BANK AND TRUST COMPANY
SELLER
Dated as of December 6, 1995
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions ............................ 2
ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.1 Agreement to Purchase .................. 6
Section 2.2 Purchase Price ........................ 6
Section 2.3 Conveyance of Mortgage Loans;
Possession of Mortgage Files ........... 6
Section 2.4 Delivery of Mortgage Loan
Documents .............................. 7
Section 2.5 Acceptance of Mortgage Loans ........... 10
Section 2.6 Transfer of Mortgage Loans; Assign-
ment of Agreement ..................... 12
Section 2.7 Examination of Mortgage Files ......... 12
Section 2.8 Books and Records ..................... 12
Section 2.9 Cost of Delivery and Recordation of
Documents ............................. 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties as
to the Seller ........................ 13
Section 3.2 Representations and Warranties
Relating to the Mortgage Loans ....... 15
Section 3.3 Representations and Warranties of
the Purchaser ........................ 28
Section 3.4 Repurchase Obligation for Defective
Documentation and for Breach of a
Representation or Warranty .......... 29
ARTICLE IV
THE SELLER
Section 4.1 Covenants of the Seller .............. 33
Section 4.2 Merger or Consolidation .............. 33
i
Section 4.3 [RESERVED] ........................... 33
Section 4.4 Indemnification ...................... 33
ARTICLE V
CONDITIONS OF CLOSING
Section 5.1 Conditions of Purchaser's Obliga-
tions ................................ 35
Section 5.2 Conditions of Seller's Obligations .... 35
Section 5.3 Termination of Purchaser's Obliga-
tions ................................ 36
ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices ............................... 37
Section 6.2 Severability of Provisions ........... 37
Section 6.3 Agreement of Seller ................... 37
Section 6.4 Survival ............................. 37
Section 6.5 Effect of Headings and Table of
Contents .............................. 38
Section 6.6 Successors and Assigns ................ 38
Section 6.7 Confirmation of Intent; Grant of
Security Interest ..................... 38
Section 6.8 Miscellaneous ......................... 39
Section 6.9 Amendments ........................... 39
Section 6.11 GOVERNING LAW; CONSENT TO JURISDIC-
TION; WAIVER OF JURY TRIAL ........... 39
Section 6.12 Execution in Counterparts ........... 39
Exhibits
Exhibit A - Mortgage Loan Schedule
Exhibit B - Officer's Certificate
ii
This Mortgage Loan Sale Agreement, dated as of December 6, 1995, by and
between IHE Funding Corp., a Delaware corporation, its successors and assigns
(the "Purchaser"), and ▇▇▇▇▇ Union Bank and Trust Company, an Indiana banking
corporation and its successors (the "Seller").
W I T N E S S E T H:
WHEREAS, Exhibit A attached hereto and made a part hereof lists
certain home equity loans secured by mortgages on one- to four-family
residential properties owned by the Seller that the Seller desires to sell to
the Purchaser and that the Purchaser desires to purchase;
WHEREAS, it is the intention of the Seller and the Purchaser
that simultaneously with the Seller's conveyance of the Mortgage Loans (as
defined herein) to the Purchaser on the Closing Date, (a) the Purchaser shall
sell the Mortgage Loans to Prudential Securities Secured Financing Corporation
(the "Depositor") pursuant to a Purchase and Sale Agreement of even date
herewith (the "Purchase and Sale Agreement"), (b) the Depositor shall deposit
the Mortgage Loans in a trust (the "Trust") pursuant to a Pooling and Servicing
Agreement to be dated as of December 6, 1995 (the "Pooling and Servicing
Agreement"), to be entered into by and among the Depositor, as depositor, ▇▇▇▇▇
Home Equity Corporation, as servicer (in such capacity, the "Servicer") and The
Chase Manhattan Bank, N.A., as trustee (the "Trustee") and (c) the Trustee shall
issue certificates evidencing beneficial ownership interests in the property of
the trust fund formed by the Pooling and Servicing Agreement to the Depositor
and, at the request and pursuant to the directions of the Purchaser hereunder
and in recognition of the Seller's continuing obligation to fund the Additional
Balances (as defined herein) on the Mortgage Loans deposited in the Trust, shall
issue the Exchangeable Certificate (as defined herein), representing the
beneficial interest in such Additional Balances on such Mortgage Loans, to the
Seller;
WHEREAS, as a matter of convenience and in light of the ultimate
transfer of the Mortgage Notes and the Mortgage Loans securing the obligations
of each Mortgagor under the related Mortgage Notes into the Trust, the Seller
has caused the Mortgage Notes to be endorsed in a manner suitable for the
delivery to the Trustee and has caused the assignment of the Mortgage Loans to
be made directly to the Trustee, without providing or indicating on any
endorsement of the Mortgage Notes or assignment of the Mortgage Loans the
respective interim endorsees or interim assignees, it being understood that the
Trustee shall hold the Mortgage Notes as bailee for the Purchaser until the
Purchaser transfers the Mortgage Notes to the Depositor pursuant to the Purchase
and Sale Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used herein, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in the
Pooling and Servicing Agreement.
"Additional Balance" shall mean any amounts added to the
principal balance of a Mortgage Loan after the Cut-Off Date as a result of the
Mortgagor on the related Mortgage Note exercising the right to borrow additional
amounts under such Mortgage Loan.
"Agreement" means this Mortgage Loan Sale Agreement, as amended
or supplemented in accordance with the provisions hereof.
"Closing Date" shall have the meaning ascribed thereto in
Section 2.1(c) hereof.
"Cut-Off Date Aggregate Principal Balance" means the aggregate
unpaid principal balance of the Mortgage Loans as of the Cut-Off Date. The Cut-
Off Date Aggregate Principal Balance is $51,583,721.78.
"Cut-Off Date Principal Balance" means as to each Mortgage Loan,
its unpaid Principal Balance as of the Cut-Off Date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Index" means, as to any Mortgage Loan, a rate per annum equal
to the highest prime rate published in the "Money Rates" section of The Wall
Street Journal on the last Business Day in the applicable period, or as
otherwise determined in accordance with the related Mortgage Note.
"Interest Adjustment Date" means the date on which the Mortgage
Interest Rate is or may be adjusted with respect to each Mortgage Loan.
"Mortgage Interest Rate" means, as to any Mortgage Loan, the per
annum rate at which interest accrues on the unpaid Principal Balance thereof, as
adjusted from time to time in accordance with the provisions of the related
Mortgage Note, which rate is (a) prior to the first Interest Adjustment Date for
each such Mortgage Loan occurring after the Cut-Off Date, the initial Mortgage
Interest Rate for such Mortgage Loan indicated on the Mortgage Loan Schedule and
(b) from and after such first Interest Adjustment Date, the sum of the Index
applicable to the most recent Interest Adjustment Date, and the Gross Margin,
rounded as set forth in such Mortgage Note, subject to the Lifetime Cap and the
Lifetime Floor and any applicable statutory maximum interest rate as set forth
in the related Mortgage Note, that may be applicable to such Mortgage Loan at
any time during the life of such Mortgage Loan.
"Mortgage Loans" means (i) the home equity revolving credit line
loans identified on the Mortgage Loan Schedule on the Closing Date, (ii) any
additional such home equity revolving credit line loans identified on the
Mortgage Loan Schedule after the Closing Date, as such schedule is amended and
supplemented from time to time in accordance with the terms of the Pooling and
Servicing Agreement, (iii) each Mortgage Note evidencing any credit line loan
referred to in (i) or (ii) above, including all amounts now or hereafter due
under such Mortgage Notes whether relating to such credit line loans or other
loans which may be made from time to time and (iv) the related Mortgages; in
each case other than payments of interest that accrued on each Mortgage Loan up
to and including the Due Date immediately preceding the applicable cut-off date.
"Mortgage Loan Schedule" shall have the meaning ascribed thereto
in the Pooling and Servicing Agreement. The Mortgage Loan Schedule is attached
hereto as Exhibit A.
"Payment Adjustment" means, with respect to any Mortgage Loan
(i) the adjustment of the amount of the Monthly Payment due on the Mortgage Loan
which adjustment may result from the capitalizing of accrued and unpaid interest
on such Mortgage Loan in accordance with the amortization schedule at the time
applicable thereto and (ii) the adjustment of the Monthly Payment due on the
Mortgage Loan which adjustment may result from the conversion, after the first
ten years of the life of the Mortgage Loan, from a Monthly Payment representing
interest only, to a Monthly Payment such that the principal outstanding balance
of the Mortgage Loan will be fully amortized over the remaining life of such
Mortgage Loan.
"Payment Adjustment Date" means, with respect to a Mortgage Loan
the date on which a Payment Adjustment may occur.
"Pooling and Servicing Agreement" shall have the meaning
ascribed thereto in the recitals hereof.
"Prospectus" means the Prospectus dated August 4, 1995 relating
to the offering by the Depositor from time to time of its Pass-Through
Certificates (Issuable in Series) in the form in which it was or will be filed
with the Securities and Exchange Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Certificates.
"Purchase and Sale Agreement" shall have the meaning ascribed
thereto in the recitals hereof.
"Registration Statement" means that certain registration
statement on Form S-3, as amended (Registration No. 33-91148) relating to the
offering by the Depositor from time to time of its Pass-Through Certificates
(Issuable in Series) as heretofore declared effective by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means ▇▇▇▇▇ Union Bank and Trust Company, in its
capacity as Seller of the Mortgage Loans under this Agreement and any successor
to ▇▇▇▇▇ Union Bank and Trust Company, whether through merger, consolidation,
purchase and assumption of ▇▇▇▇▇ Union Bank and Trust Company or all or
substantially all of its assets or otherwise.
"Servicer" means ▇▇▇▇▇ Home Equity Corporation, in its capacity
as servicer of the Mortgage Loans and as the Servicer under the Pooling and
Servicing Agreement, or any successor appointed pursuant to the Pooling and
Servicing Agreement.
"Termination Event" means the existence of any one or more of
the following conditions:
(a) a stop order suspending the effectiveness of the Registration
Statement shall have been issued or a proceeding for that purpose shall have
been initiated or threatened by the Commission; or
(b) subsequent to the execution and delivery of this Agreement, a
downgrading, or public notification of a possible change, without indication of
direction, shall have occurred in the rating afforded any of the debt securities
or claims paying ability of any person providing any form of credit enhancement
for any of the Certificates, by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act; or
(c) subsequent to the execution and delivery of this Agreement,
there shall have occurred an adverse change in the condition, financial or
otherwise, earnings, affairs, regulatory situation or business prospects of the
Certificate Insurer or the Seller reasonably determined by the Purchaser or the
Depositor to be material; or
(d) subsequent to the date of this Agreement there shall have
occurred any of the following: (i) a suspension or material limitation in
trading in securities substantially similar to the Certificates; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the engagement by the United
States in hostilities, or the escalation of such hostilities, or any calamity or
crisis, if the effect of any such event specified in this clause (iii) in the
reasonable judgment of the Depositor makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Certificates on the
terms and in the manner contemplated in the Prospectus Supplement.
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ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.1 Agreement to Purchase. (a) Subject to the
terms and conditions of this Agreement, the Seller hereby sells, transfers,
conveys, and assigns and the Purchaser hereby purchases the Mortgage Loans, it
being understood by the parties hereto that the Seller is transferring all
rights with respect to each Mortgage Loan but retains, has reserved and is not
transferring hereby, the obligation to fund any Additional Balance on each such
Mortgage Loan.
(b) Subject to Section 2.7, the Purchaser and the Seller
have agreed upon which of the Seller's Mortgage Loans are purchased by the
Purchaser pursuant to this Agreement, and the Seller has prepared a Mortgage
Loan Schedule. The Mortgage Loan Schedule is attached hereto as Exhibit A. The
Mortgage Loan Schedule shall be amended from time to time to reflect the
addition or removal of any Additional Balances on the Mortgage Loans, or in
connection with the issuance of any certificates.
(c) The closing for the purchase and sale of the Mortgage
Loans shall take place at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇,
New York, New York, at 10:00 a.m., New York time, on December 6, 1995 or such
other place and time as the parties shall agree (such time being herein referred
to as the "Closing Date").
Section 2.2 Purchase Price. On the Closing Date, as full
consideration for the Seller's sale of the Mortgage Loans to the Purchaser, the
Purchaser will deliver to the Seller an amount in cash equal to $54,162,907.98,
payable in immediately available funds. In recognition of the Seller's
continuing obligation to fund the Additional Balances drawn by the Mortgagor
under the related Mortgage Loan, the Purchaser shall, pursuant to the Purchase
and Sale Agreement and the Pooling and Servicing Agreement, cause the Depositor
to direct the Trustee to issue the Exchangeable Certificate, representing the
right to receive payments allocable to the Additional Balances, to the Seller.
Section 2.3 Conveyance of Mortgage Loans; Possession of
Mortgage Files. (a) Effective as of the Closing Date, the Seller hereby sells,
transfers, assigns, sets over and conveys to the Purchaser, without recourse but
subject to the terms of this Agreement, all right, title and interest in and to
the Mortgage Loans, the insurance policies relating to each such Mortgage Loan,
if any, and all right, title and interest in and to the proceeds of such
insurance policies from and after the Closing Date.
(b) Upon the sale of such Mortgage Loans, the ownership of
each related Mortgage Note, each related Mortgage and the contents of the
related Mortgage File shall immediately vest in the Purchaser and the ownership
of all related records and documents with respect to each Mortgage Loan prepared
by or which come into the possession of the Seller shall immediately vest in the
Purchaser. The contents of any Mortgage File in the possession of the Seller at
any time after such sale, and any scheduled payments of principal and interest
on the Mortgage Loans due after the Cut-Off Date and received by the Seller
(excluding interest accruing on or prior to the Due Date immediately preceding
the Cut-Off Date, which shall be retained by the Seller), shall be held in trust
by the Seller for the benefit of the Purchaser as the owner thereof, and shall
be promptly delivered by the Seller to or upon the order of the Purchaser.
(c) Pursuant to the Purchase and Sale Agreement, the
Purchaser shall, on the Closing Date, irrevocably sell, transfer, setover,
convey and assign all of its right, title and interest in and to the Mortgage
Loans to the Depositor.
(d) Pursuant to the Pooling and Servicing Agreement, the
Depositor shall, on the Closing Date, irrevocably transfer, assign, set over and
otherwise convey all of its right, title and interest in and to the applicable
Mortgage Loans and all of its rights (exclusive of its obligations) under the
Purchase and Sale Agreement and this Agreement to the Trustee for the benefit of
the Certificateholders, the holder of the Exchangeable Certificate and of any
Additional Certificate and the Certificate Insurer.
Section 2.4 Delivery of Mortgage Loan Documents. (a) On or
prior to the Closing Date, the Seller shall deliver to the Trustee each of the
following documents for each applicable Mortgage Loan:
(i) The original Mortgage Note, endorsed by the holder of
record without recourse in the following form: "Pay to the order of
, without recourse" and signed in the name of the holder of record, and if by
the Seller, by an authorized officer;
(ii) The original Mortgage with evidence of recording
indicated thereon; provided, that if such Mortgage has not been returned from
the applicable recording office, then such recorded Mortgage shall be delivered
when so returned;
(iii) An assignment of the original Mortgage, in suitable form
for recordation in the jurisdiction in which the related Mortgaged Property is
located, in the name of the holder of record of the Mortgage Loan by an
authorized officer (with evidence of submission for recordation of such
assignment in the appropriate real estate recording office for such Mortgaged
Property to be received by the Trustee within 14 days of the Closing Date);
provided, however, that assignments of mortgages shall not be required to be
submitted for recording with respect to any Mortgage Loan if the Seller shall
have delivered no later than 14 days after the Closing Date an opinion of
counsel in form and substance satisfactory to the Purchaser, the Depositor, the
Trustee, each of the Rating Agencies and the Certificate Insurer stating that,
in such counsel's opinion, the failure to record such assignment shall not have
a materially adverse effect on the security interest of the Purchaser, the
Depositor or the Trustee in the Mortgage; provided, further, that any assignment
not submitted for recordation within 14 days of the Closing Date shall be
recorded upon the earlier to occur of (i) receipt by the Trustee of the
Certificate Insurer's written direction to record such Mortgage, (ii) the
occurrence of any Event of Default, as such term is defined in the Pooling and
Servicing Agreement, or (iii) a bankruptcy or insolvency proceeding involving
the Mortgagor is initiated or foreclosure proceedings are initiated against the
Mortgaged Property as a consequence of an event of default under the Mortgage
Loan; provided, further, that if the related Mortgage has not been returned
from the applicable recording office, then such assignment shall be delivered
when so returned (and a blanket assignment with respect to such unrecorded
Mortgage Loan shall be delivered on the Closing Date);
(iv) Any intervening assignments of the Mortgage with
evidence of recording thereon;
(v) Any assumption, modification, consolidation or extension
agreements; and
(vi) The 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) and the certificate of primary mortgage guaranty
insurance, if any, issued with respect to such Mortgage Loan, provided, however,
that Mortgage Loans with a principal balance under $15,000 as of the Cut-Off
Date which are in a second lien position and have been submitted for review of
title after July 10, 1995 shall be exempt from this requirement.
(b) In the event that any such Assignment of Mortgage
referred to in clause (a)(iii) above is not in a suitable form for recording or
is lost or, upon an attempt to record such Assignment of Mortgage, is returned
unrecorded because of a defect therein, the Seller shall promptly prepare a
substitute Assignment of Mortgage or cure such defect, as the case may be.
(c) The Seller shall, within five Business Days after the
receipt thereof, and in any event, no later than 120 days after the Closing
Date, deliver or cause to be delivered to the Trustee or its designee: (i) the
original recorded Mortgage and related power of attorney, if any, in those
instances where a copy thereof certified by the Seller was delivered to the
Purchaser; (ii) the original Assignment of Mortgage from the Seller to the
Purchaser (or at the direction of the Purchaser, to the Trustee) delivered
pursuant to the foregoing clause (a)(iii) above, which, together with any
intervening assignments of Mortgage, evidences a complete chain of assignment
from the originator of the Mortgage Loan to the Trustee in those instances where
copies of such Assignments certified by the Seller were delivered to the
Trustee; and (iii) the title insurance policy or title opinion required in
clause (a)(vi) above. Notwithstanding anything to the contrary contained in
this Section 2.4, in those instances where the public recording office retains
the original Mortgage, power of attorney, if any, assignment or Assignment of
Mortgage after it has been recorded or such original has been returned by the
recording office but has not yet arrived at the Seller, or it has been lost by
the recording office, the Seller shall be deemed to have satisfied its
obligations hereunder upon delivery to the Purchaser of a copy of such Mortgage,
power of attorney, if any, assignment or Assignment of Mortgage certified by the
public recording office to be a true copy of the recorded original thereof. From
time to time the Seller may forward or cause to be forwarded to the Purchaser
additional original documents evidencing an assumption or modification of a
Mortgage Loan.
(d) All original documents relating to the Mortgage Loans
that are not delivered to the Purchaser as permitted by this Section 2.4 are and
shall be held by the Seller in trust for the benefit of the Purchaser or its
assignee, or the assignees of its assignee. In the event that any such original
document is required pursuant to the terms of this Section 2.4 to be a part of a
Mortgage File, such document shall be delivered promptly to, or upon the
instruction of, the Purchaser. From and after the sale of the Mortgage Loans to
the Purchaser pursuant hereto, to the extent that the Seller retains legal title
of record to any Mortgage Loans prior to the vesting of legal title in the
Purchaser, and, pursuant to the Purchase and Sale Agreement, thereafter in the
Trustee (as assignee of the Depositor pursuant to the Pooling and Servicing
Agreement), such title shall be retained in trust for the Purchaser, on behalf
of and for the benefit of the Depositor as the owner of the Mortgage Loans and
the Trustee, as the Depositor's assignee.
Section 2.5 Acceptance of Mortgage Loans. (a) Pursuant to
the Pooling and Servicing Agreement, the Trustee has agreed to execute and
deliver on or prior to the Closing Date an acknowledgment of receipt of, for
each Mortgage Loan, the original Mortgage Note with respect to each Mortgage
Loan (with any exceptions noted), in the form attached as Exhibit E to the
Pooling and Servicing Agreement and declares that it will hold such documents
and any amendments, replacements or supplements thereto, as well as any other
assets included in the definition of Trust Fund in the Pooling and Servicing
Agreement and delivered to the Trustee, as Trustee in trust upon and subject to
the conditions set forth in the Pooling and Servicing Agreement for the benefit
of the Certificateholders and the Certificate Insurer. Pursuant to the Pooling
and Servicing Agreement, the Trustee has agreed, for the benefit of the
Certificateholders and the Certificate Insurer, to review (or cause to be
reviewed) each Trustee's Mortgage File within 45 Business Days after the Closing
Date (or, with respect to any Qualified Substitute Mortgage Loan, within 45
Business Days after the receipt by the Trustee thereof) and to deliver to the
initial Certificateholders, the Purchaser, the Servicer and the Certificate
Insurer a certification in the form attached to the Pooling and Servicing
Agreement as Exhibit F to the effect that, as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), (i) all documents required to be delivered to it hereunder,
pursuant to the Purchase and Sale Agreement and pursuant to the Pooling and
Servicing Agreement are in its possession, and (ii) each such document has been
reviewed by it, has been executed to the extent required, and has not been
mutilated, damaged, torn or otherwise physically altered (handwritten additions,
changes or corrections shall not constitute physical alteration if initialled by
the Mortgagor), appears regular on its face and relates to such Mortgage Loan.
The Pooling and Servicing Agreement provides that the Trustee shall be under no
duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they are other
than what they purport to be on their face. The Pooling and Servicing Agreement
also provides that, by December 6, 1996, the Trustee shall be required to
deliver (or cause to be delivered) to the Servicer, the Purchaser, the initial
Certificateholders and the Certificate Insurer a final certification in the form
attached to the Pooling and Servicing Agreement as Exhibit G to the effect that,
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), and as to any document
noted in an exception included in the Trustee's initial certification, (i) all
documents required to be delivered to it hereunder and in the Purchase and Sale
Agreement and pursuant to the Pooling and Servicing Agreement are in its
possession, and (ii) each such document has been reviewed by it, has been
executed to the extent required, and has not been mutilated, damaged, torn or
otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialled by the Mortgagor),
appears regular on its face and relates to such Mortgage Loan.
(b) The Pooling and Servicing Agreement also provides that,
if the Certificate Insurer or the Trustee during the process of reviewing the
Trustee's Mortgage Files finds any document constituting a part of a Trustee's
Mortgage File which is not executed, has not been received, is unrelated to the
Mortgage Loan identified in the Mortgage Loan Schedule, or does not conform to
the requirements of Section 2.4 or the description thereof as set forth in the
Mortgage Loan Schedule, the Trustee or the Certificate Insurer, as applicable,
shall promptly so notify the Servicer or the Purchaser, who shall notify the
Seller. The Seller agrees that in performing any such review, the Trustee may
conclusively rely on the Seller as to the purported genuineness of any such
document and any signature thereon. The Seller agrees to use reasonable efforts
to remedy a material defect in a document constituting part of a Mortgage File
of which it is notified. If, however, within 60 days after such notice the
Seller has not remedied the defect and the defect materially and adversely
affects the interest of the Purchaser in the related Mortgage Loan, then the
Seller shall either substitute in lieu of such Mortgage Loan a Qualified
Substitute Mortgage Loan or purchase such Mortgage Loan in the manner and
subject to the conditions set forth in Section 3.4.
(c) The failure of the Purchaser to give any notice
contemplated herein within the time periods specified above shall not affect or
relieve the Seller's obligation to repurchase for any Mortgage Loan pursuant to
this Section 2.5 or Section 3.4 of this Agreement.
(d) In the event that any Mortgage Note required to be
delivered pursuant to Section 2.4 is conclusively determined by any of the
Seller, the Servicer, the Custodian or the Trustee to be lost, stolen or
destroyed, the Seller shall, within 14 days of the Closing Date, deliver to the
Trustee a "lost note affidavit" in form and substance acceptable to the Trustee,
and shall simultaneously therewith request the obligor on such Mortgage Note to
execute and return a replacement Mortgage Note, and shall further agree to hold
the Purchaser, the Depositor, the Trustee and the Certificate Insurer harmless
from any loss or damage resulting from any action taken in reliance on the
delivery and possession by the Trustee of such lost note affidavit. Upon the
receipt of such replacement Mortgage Note, the Trustee shall return the lost
note affidavit and the Servicer shall have no further indemnification obligation
with respect to such lost note affidavit. The delivery of such lost note
affidavit shall not affect the obligations of the Seller pursuant to this
Section 2.5 or Section 3.4 of this Agreement.
Section 2.6 Transfer of Mortgage Loans; Assignment of
Agreement. The Seller hereby acknowledges and agrees that the Purchaser may
sell, transfer and assign its interest under this Agreement to the Depositor,
who in accordance with the Pooling and Servicing Agreement may assign its
interest to the Trustee as may be required to effect the purposes of the Pooling
and Servicing Agreement, without further notice to, or consent of, the Purchaser
or Seller, and the Trustee shall succeed to such of the rights and obligations
of the Depositor as shall be so assigned.
Section 2.7 Examination of Mortgage Files. Prior to the
Closing Date, the Seller shall make the Mortgage Files available to the
Purchaser or its designee for examination at the Seller's offices or at such
other place as the Seller shall reasonably specify. Such examination may be
made by the Purchaser or its designee at any time on or before the Closing Date.
If the Purchaser or its designee makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Purchaser as described in this Agreement, such Mortgage Loans shall be
deleted from the Mortgage Loan Schedule and may be replaced, prior to the
Closing Date, by substitute Mortgage Loans acceptable to the Purchaser. The
Purchaser may, at its option and without notice to the Seller, purchase all or
part of the Mortgage Loans without conducting any partial or complete
examination.
Section 2.8 Books and Records. The sale of each Mortgage
Loan shall be reflected on the Seller's accounting and other records, balance
sheet and other financial statements as a sale of assets by the Seller to the
Purchaser.
Section 2.9 Cost of Delivery and Recordation of Documents.
The costs relating to the delivery and recordation of the documents specified in
this Article II in connection with the Mortgage Loans shall be borne by the
Purchaser.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties as to the Seller.
The Seller hereby represents and warrants to the Purchaser, as of the Closing
Date, that:
(a) The Seller is an Indiana banking corporation duly
organized and validly existing under the banking laws of the State of Indiana
and has all licenses necessary to carry on its business as now being conducted
and is licensed, qualified and in good standing in each state where a Mortgaged
Property is located and is duly licensed and qualified in each such state that
requires licensing or qualification in order to conduct business of the type
conducted by the Seller and to perform its obligations as the Seller hereunder,
and in any event the Seller is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related Mortgage Loan;
the Seller has the full power and authority, corporate and otherwise, to execute
and deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Seller; and all requisite corporate action has been taken by
the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;
(b) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement or
the sale of the Mortgage Loans pursuant to the terms of this Agreement or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Closing Date;
(c) Neither the execution and delivery of this Agreement,
the acquisition or origination of the Mortgage Loans by the Seller or the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, has or will conflict with or result in a
breach of any of the terms, conditions or provisions of the Seller's charter or
by-laws or any legal restriction or any agreement or instrument to which the
Seller is now a party or by which it is bound or to which its property is
subject, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject, or impair the
ability of the Purchaser to realize on the Mortgage Loans, or impair the value
of the Mortgage Loans;
(d) Neither this Agreement nor the information contained in
the Prospectus Supplement under the caption "Description of the Mortgage Loans
-- Underwriting Criteria," "-- Origination Process" or "-- Mortgage Loan Closing
Procedures" nor any statement, report or other document prepared by the Seller
and furnished or to be furnished pursuant to this Agreement or in connection
with the transactions contemplated hereby contains any untrue statement or
alleged untrue statement of any material fact or omits to state a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading;
(e) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Seller, threatened before a court,
administrative agency or government tribunal against the Seller which, either in
any one instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or assets of the
Seller, or in any material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in any material
liability on the part of the Seller, or which would draw into question the
validity of this Agreement, the Mortgage Loans, or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would materially impair the ability of the Seller to perform under the
terms of this Agreement or that might prohibit its entering into this Agreement
or the consummation of any of the transactions contemplated hereby;
(f) The Seller is not in violation of or in default with
respect to, and the execution and delivery of this Agreement by the Seller and
its performance of and compliance with the terms hereof will not constitute a
violation or default with respect to, any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental
agency, which violation or default might have consequences that would materially
and adversely affect the condition (financial or other) or operations of the
Seller or its properties or might have consequences that would materially and
adversely affect its performance hereunder or under any subservicing agreement;
(g) Upon the receipt of each Mortgage File by the Purchaser
under this Agreement, the Purchaser will have good title to each related
Mortgage Loan free and clear of any lien created by the Seller (other than liens
which will be simultaneously released);
(h) The consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions or any federal or state regulations applicable
to a banking corporation in effect in any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the
Seller, the Seller acquired title to the Mortgage Loan in good faith, without
notice of any adverse claim not otherwise disclosed to the Purchaser;
(j) The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement. The Seller is solvent and the sale of the Mortgage Loans by the
Seller pursuant to the terms of this Agreement will not cause the Seller to
become insolvent. The sale of the Mortgage Loans by the Seller pursuant to the
terms of this Agreement was not undertaken with the intent to hinder, delay or
defraud any of the Seller's creditors;
(k) The Mortgage Loans are not intentionally selected by the
Seller for sale to the Purchaser in a manner so as to affect adversely the
interests of the Purchaser or of any transferee of the Purchaser (including the
Depositor or the Trustee);
(l) [Reserved]
(m) The Seller has not dealt with any broker or agent or
anyone else that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans to the Depositor other than to the Depositor
or an affiliate thereof; and
(n) The consideration received by the Seller upon the sale
of the Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans.
Section 3.2 Representations and Warranties Relating to the
Mortgage Loans. The Seller represents and warrants to the Purchaser as of the
Closing Date that, as to each Mortgage Loan, immediately prior to the sale and
transfer of such Mortgage Loan by the Seller to the Purchaser:
(a) The Mortgage Loans had, as of the Cut-Off Date, an
aggregate Principal Balance equal to $51,583,721.78, and all of the information
set forth in the Mortgage Loan Schedule is complete, true and correct;
(b) All payments required to be made up to the Cut-Off Date
for the Mortgage Loan under the terms of the Mortgage Note have been made and
credited. Unless otherwise specified on the Mortgage Loan Schedule, no payment
required under the Mortgage Loan is more than 30 days delinquent nor has any
payment under the Mortgage Loan been delinquent for more than 30 days more than
once in the 12 months preceding the Cut-Off Date; and the first Monthly Payment
has been made or shall be made, as the case may be, with respect to the Mortgage
Loan on the Due Date or within the grace period;
(c) To the best of Seller's knowledge, there are no defaults
in complying with the terms of the Mortgage and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid,
or an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is not yet
due and payable. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan;
(d) The terms of the Mortgage Note and Mortgage 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 interests of the
Purchaser, and delivered to the Purchaser. The substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the policy, and its terms are reflected on the Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement is part of the
Mortgage File delivered to the Purchaser and the terms of which are reflected in
the Mortgage Loan Schedule;
(e) The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, recoupment, counterclaim or defense,
including, without limitation, the defense of usury, and no such right of
rescission, set-off, recoupment, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Pursuant to the terms of the Mortgage, the Mortgaged
Property is subject to fire and casualty insurance with a standard mortgagee
clause and extended coverage in an amount which is not less than the replacement
value of the improvements securing such Mortgage Loan. The fire and casualty
insurance is standard for the industry for property similar (in terms of
property type, value and location) to the Mortgaged Property. If, the Mortgaged
Property is in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, a flood insurance
policy is in effect with respect to the Mortgaged Property meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the unpaid principal balance of the
Mortgage Loan, (ii) the full insurable value of the Mortgaged Property or (iii)
the maximum amount of insurance available under the Flood Disaster Protection
Act of 1973. To the best of Seller's knowledge, all such insurance policies
(collectively, the "hazard insurance policy") meet the requirements of the
current guidelines of the Federal Insurance Administration, conform to the
requirements of the FNMA Sellers' Guide and the FNMA Servicers' Guide, and are a
standard policy of insurance for the locale where the Mortgaged Property is
located. It is understood and agreed that such insurance is with insurers
approved by the Servicer and that no earthquake or other additional insurance is
to be required of any Mortgagor or to be maintained on property acquired in
respect of a defaulted loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. The hazard insurance policy names (and will name) the
Mortgagor as the insured and contains a standard mortgagee loss payable clause
in favor of the Seller, and its successors and assigns. The 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 hazard insurance policies
applicable to the Mortgage Loans including, without limitation, any necessary
notifications of insurers and assignments of policies or interests thereon. The
Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor; provided, however, that the addition of any such cost shall not
be taken into account for purposes of calculating the principal amount of the
Mortgage Note or the Mortgage Loan secured by the Mortgage Note. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium or the
common facilities of a planned unit development. To the best of Seller's
knowledge, the hazard 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 Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's or any subservicer's having engaged in, any
act or omission which would impair the coverage of any such policy, the benefits
of the endorsement provided for herein, or the validity and binding effect of
either. To the best of Seller's knowledge, and in connection with the issuance
of the hazard insurance policy, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) 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 or
disclosure laws applicable to the Mortgage Loan have been complied with and the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws;
(h) The Mortgage has not been satisfied, canceled,
subordinated (other than in connection with a refinancing of the first mortgage
on the Mortgaged Property) or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) The Mortgaged Property is located in the state
identified in the Mortgage Loan Schedule and consists either of a fee simple
estate or, in the case of certain Mortgage Loans secured by Mortgaged Property
located in the State of Illinois, a land trust, in a single parcel of real
property improved by a one- to four-family residential dwelling or a
manufactured dwelling (non-mobile, as defined in the FNMA Selling Guide);
(j) The Mortgage is a valid, subsisting, enforceable and
perfected first or second lien on the Mortgaged Property, including all
buildings on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or annexed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing. The lien of the Mortgage is subject only
to:
(i) in the case of Mortgage Loans in a second
priority lien position, a first mortgage;
(ii) the lien of current real property taxes and
assessments not yet due and payable;
(iii) covenants, conditions and restrictions, rights
of way, easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan; and
(iv) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Except for those Mortgage Loans subject to a first mortgage lien, any security
agreement, chattel mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid, subsisting
and enforceable first lien and first priority security interest on the property
described therein and immediately prior to the sale of such Mortgage Loan to the
Purchaser pursuant to this Agreement, the Seller had full right to sell and
assign the same to the Purchaser. As of the date of origination of the Mortgage
Loan, the Mortgaged Property was not subject to a mortgage, deed of trust, deed
to secure debt or other security instrument creating a lien subordinate to the
lien of the Mortgage;
(k) The Mortgage Note and the Mortgage and every other
agreement, if any, executed and delivered by the Mortgagor in connection with
the Mortgage Loan are genuine, and each is the legal, valid and binding
obligation of the maker thereof enforceable in accordance with its terms. All
parties to the Mortgage Note and the Mortgage and any other related agreement
had legal capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note, the Mortgage and such other related agreements, and the
Mortgage Note and the Mortgage and such other related agreements have been duly
and properly executed by such parties. The Seller has reviewed, or has caused
to be reviewed, all of the documents constituting the Mortgage File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) The Mortgage Loan has been closed and any proceeds of
the Mortgage Loan drawn by the Mortgagor as of the Cut-Off Date have been fully
disbursed and there is no requirement for future advances thereunder (except
that the Mortgagor has the right to make additional drawings thereunder), and
any and all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan and
the recording of the Mortgage were paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Immediately prior to the sale of the Mortgage Loan to
the Purchaser under this Agreement, (i) the Seller was the sole owner of record
and holder of the Mortgage Loan, (ii) the Mortgage Loan was not assigned or
pledged, (iii) the Seller had good, indefeasible and marketable title thereto,
(iv) the Seller had full right to transfer and sell the Mortgage Loan therein to
the Purchaser free and clear of any encumbrance, equity interest, participation
interest, lien, pledge, charge, claim or security interest, and (v) the Seller
had full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan to the
Purchaser under this Agreement, and following the sale of each Mortgage Loan,
the Purchaser will own such Mortgage Loan free and clear of any encumbrance,
equity interest, participation interest, lien, pledge, charge, claim or security
interest;
(n) All parties which had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, and including, without
limitation, the Seller, to the best knowledge of the Seller, 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 the Mortgaged Property is located to the extent required to avoid a
material adverse effect to the interest of the Purchaser, (ii) (1) organized
under the laws of such state, or (2) qualified to do business in such state, or
(3) federal savings and loan associations, savings banks, or national banks
having principal offices in such state, or (4) not doing business in such state;
(o) The Mortgage Loan has an original Loan-to-Value ratio
(calculated at the time of origination by dividing the outstanding principal
amount of the Mortgage Loan by the appraised value of the Mortgaged Property)
equal to or less than [100%];
(p) Each Mortgage Loan (x) in a first lien position or (y)
having a principal balance of $15,000 or more and which has not been submitted
for a review of title after July 10, 1995, is covered by either (i) an
attorney's opinion of title and abstract of title or (ii) an ALTA lender's title
insurance policy or other generally acceptable form of policy of insurance
issued by a title insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Seller, its successors and assigns,
as to the priority of its lien of the Mortgage in the original principal amount
of the Mortgage Loan, and subject only to the exceptions contained in clauses
(i), (ii), (iii) and (iv) of paragraph (j) above and against any loss by reason
of the invalidity or unenforceability of the lien resulting from the provisions
of the Mortgage. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. Immediately prior to the sale of the Mortgage
Loan to the Purchaser under the terms of this Agreement, the Seller, its
successors and assigns were the sole insureds of such lender's title insurance
policy. Such lender's title insurance policy is in full force and effect and
will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the Mortgage, including the
Seller, has done, by act or omission, anything which would impair the coverage
of such lender's title insurance policy. In connection with the issuance of
such lender's title insurance policy, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(q) To the best of Seller's knowledge, after reasonable due
diligence, there is no default, breach, violation or event of acceleration
existing under the Mortgage or the 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, and
neither the Seller nor its predecessors have waived any default, breach,
violation or event of acceleration;
(r) To the best of the Seller's knowledge, there are no
mechanics' or similar liens or claims which have been filed for work, labor or
material (and no rights are outstanding that under the law could give rise to
such liens) affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related Mortgage;
(s) To the best of Seller's knowledge, all improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property and no improvements on adjoining properties encroach upon the
Mortgaged Property. To the best of Seller's knowledge, no improvement located
on or being part of the Mortgaged Property is in violation of any applicable
zoning law or regulation; provided, that in no event shall a legal nonconforming
use of the Mortgaged Property be considered a violation of any such zoning law
or regulation;
(t) The Mortgage Note is payable on the fifteenth day of
each month. The Mortgage Interest Rate and Monthly Payment are adjusted in
accordance with the terms of the Mortgage Note. All required notices of
interest rate and payment amount adjustments have been sent to the Mortgagor on
a timely basis and the computations of such adjustments were properly
calculated. Installments of interest are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Adjustment Date, with
interest calculated and payable in arrears, sufficient to amortize the Mortgage
Loan fully by the stated maturity date over an original term of twenty years
from the closing date of the Mortgage Loan, however, the first ten years of
payments on the Mortgage Loan are not required to include principal payments but
are required to include at least the current interest due, calculated in
accordance with the applicable Mortgage Interest Rate. With respect to each
Mortgage Loan, the Payment Adjustments will be such that such Mortgage Loan will
fully amortize over twenty years notwithstanding any additions to the principal
balance of the Mortgage Loan due to capitalizing interest. All Mortgage
Interest Rate adjustments and Payment Adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has been
properly paid and credited;
(u) The 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 provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on,
or trustee's sale of, the Mortgaged Property pursuant to the proper procedures,
the holder of the Mortgage Loan will be able to deliver good and merchantable
title to the Mortgaged Property. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage
subject to applicable federal and state laws and judicial precedent with respect
to bankruptcy and right of redemption;
(v) To the best of Seller's knowledge, all inspections,
licenses and certificates required to be made are 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;
(w) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to in
(j) above;
(x) In the event the Mortgage constitutes a deed of trust, a
trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Trustee out
of the assets of the Trust Fund to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Mortgagor, provided
that this representation and warranty shall in no way obligate the Trustee to
pay any such amounts;
(y) The Mortgage Note, the Mortgage, the related Assignment
of Mortgage and any other documents required to be delivered by the Seller have
been delivered to the Trustee in accordance with Section 2.4 and with Section
2.5(d). The Trustee is in possession of a complete, true and accurate Mortgage
File in accordance with Section 2.3;
(z) The Mortgage contains a provision for the acceleration
of the payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior written
consent of the Mortgagee thereunder, at the option of the Mortgagee;
(aa) Each of the Mortgage and the Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(ab) The Mortgage Loan does not contain provisions pursuant
to which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor, nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(ac) Any future advances or drawings on the Mortgage Loan
made prior to the Cut-Off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to the Purchaser. Any such consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(ad) To the best of Seller's knowledge, there is no
proceeding pending or threatened for the total or partial condemnation of the
Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado, other types of water
damage, or other 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 and each Mortgaged Property is in good repair. There have not
been any condemnation proceedings with respect to the Mortgaged Property and the
Seller has no knowledge of any such proceedings in the future;
(ae) The origination and collection practices used by the
Seller with respect to the Mortgage Loan have been, and in all respects are in
compliance with the Accepted Servicing Practices and with all applicable laws
and regulations. Any escrow payments have been collected in full compliance
with state and federal law. Unless prohibited by applicable law, an escrow of
funds has been established in an amount sufficient to pay for every item which
remains unpaid and which has been assessed but is not yet due and payable, and
all such escrowed funds are held in the possession of the Servicer on behalf of
the Trustee for the benefit of the Certificateholders and the holder of the
Exchangeable Certificate, and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. No escrow deposits or escrow payments or other charges or payments due
the Seller have been capitalized under the Mortgage or the Mortgage Note;
(af) The Mortgage File contains an appraisal of the related
Mortgage Property signed prior to the approval of the Mortgage Loan application
by an appraiser acceptable to the Purchaser;
(ag) The Mortgagor has not notified the Seller, and the
Seller has no knowledge of any relief requested or allowed to the Mortgagor
under the Soldiers' and Sailors' Civil Relief Act of 1940.
(ah) To the best of the Seller's knowledge, there exists no
violation of any local, state, or federal environmental law, rule or regulation
in respect of the Mortgaged Property which violation has or could have a
material adverse effect on the market value of such Mortgaged Property. The
Seller has no knowledge of any pending action or proceeding directly involving
the related Mortgaged Property in which compliance with any environmental law,
rule or regulation is in issue; and, to the best of the Seller's knowledge,
nothing further remains to be done to satisfy in full all requirements of each
such law, rule or regulation constituting a prerequisite to the use and
employment of such Mortgaged Property;
(ai) No Mortgage Loan was made in connection with (i) the
construction of a Mortgaged Property or (ii) facilitating the trade-in or
exchange of a Mortgaged Property;
(aj) 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 or
disclosure laws, applicable to the Mortgage Loan have been complied with, and
the Seller has and shall maintain in its possession or in the possession of the
Servicer, available for the Purchaser's or to its assignee's inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance with all such
requirements;
(ak) The Mortgage Loans are representative of the mortgage
loans in the Seller's portfolio of adjustable rate one- to four-family home
equity lines of credit;
(al) All information regarding the Mortgage Loans which could
reasonably be expected to adversely affect the value or the marketability of any
Mortgaged Property or Mortgage Loan and of which the Seller is aware has been
provided by the Seller to the Purchaser;
(am) The Seller is a community bank supervised and examined
by a State authority. The Mortgage Loan was originated in accordance with the
Seller's underwriting guidelines and was underwritten in strict accordance
therewith. The documents, instruments and agreements submitted for loan
underwriting were not falsified by or with the knowledge of the Seller and
contain no untrue statement of material fact and do not omit to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading. The Seller has not made any representations
to the Mortgagor that are inconsistent with the mortgage instruments used;
(an) All amounts, with respect to the Mortgage Loans,
received after the Cut-Off Date and to which the Seller is not entitled, have
been deposited at the direction of the Purchaser into the Trustee Collection
Account;
(ao) To the best of the Seller's knowledge after due inquiry,
there is no delinquent recording or other tax or assessment lien on the Mortgage
Property;
(ap) The Seller has performed or directed the Servicer to
perform any and all acts required to be performed to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loan, including, without limitation, any necessary notification of insurers,
assignments of policies (other than the title policy) or interests therein, and
establishment of co-insurer, joint loan payer and mortgagee rights in favor of
the Purchaser or the assignee of the Purchaser;
(aq) The Mortgage Loan conforms, and all such Mortgage Loans
in the aggregate conform, to the description thereof set forth in the Prospectus
Supplement;
(ar) [Reserved];
(as) With respect to any Mortgage Loan that is located in any
of the 39 counties in California that have been declared federal disaster areas
due to flooding that has occurred in January, February and March 1995, if the
Seller, acting reasonably, has reason to believe that any Mortgaged Property has
been affected by flooding, the Seller will cause the Servicer to contact the
related obligor regarding the condition of the related property. The Servicer
shall be required to contact the related obligor regarding the condition of
Mortgaged Property if such obligor shall be five or more days late in making a
payment on the Mortgage Loan;
(at) As of the Cut-Off Date, no more than 0.70% of the
Mortgage Loans will be secured by Mortgaged Properties located within any single
zip code area;
(au) Approximately 0.46% of the outstanding principal balance
of the Mortgage Loans are non-owner occupied or second homes;
(av) Each Mortgage Loan constitutes a Qualified Mortgage, as
defined in the Pooling and Servicing Agreement; and
(aw) The enforceability of the Mortgage Loan and the
obligations of the Mortgagor under the Mortgage Note are not adversely affected
by the provisions in the Pooling and Servicing Agreement with respect to the
allocation and administration of collected principal and interest payments made
by a Mortgagor and any liquidation proceeds collected in respect of a defaulted
Mortgage Loan.
(ax) Each Mortgaged Property does not include cooperatives or
mobile homes attached to a foundation or otherwise and does not constitute other
than real property under state law.
(ay) Except as previously disclosed in writing to the Trustee
and the Certificate Insurer, with respect to each Mortgage Loan, there is only
one originally executed Mortgage Note not stamped as a duplicate.
(az) There do not exist any circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan.
(ba) No statement, report or other document constituting part
of the Mortgage File contains any untrue statement of fact or omits to state a
fact necessary to make the statements contained therein not misleading.
(bb) At the time of the origination or each Mortgage Loan
that is not a first mortgage loan, the related prior lien was not more than 30
days or more delinquent.
(bc) As of the Closing Date, there is no valid offset,
defense or counterclaim to any Mortgage Loan Agreement or Mortgage, including
without limitation, any offset defense or counterclaim against the obligation to
pay principal and interest in accordance with the Mortgage Loan Agreement.
(bd) As of the Closing Date, each Mortgage Loan and Mortgage
is an enforceable obligation of the related Mortgagor, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights generally and except as such enforceability may be limited by
general principles of equity (whether considered in a proceeding at law or in
equity); no instrument of release or waiver has been executed in connection with
any Mortgage Loan and no Mortgagor has been released, in whole or in part.
(be) The Mortgage Loans are not being transferred with any
intent to hinder, delay or defraud any creditors of the Seller.
(bf) As of the Closing Date, ▇▇▇▇▇ Union Bank and Trust
Company has not received and is not aware of, a notice of default of any senior
mortgage loan related to a Mortgaged Property which has not been cured.
(bg) No selection procedure reasonably believed by ▇▇▇▇▇
Union Bank and Trust Company to be materially adverse to the interests of the
Certificateholders or the Certificate Insurer was utilized in selecting the
Mortgage Loans.
(bh) Each Mortgage was recorded, and, except for the blanket
assignments made pursuant to Section 2.3(a)(iii) of the Pooling and Servicing
Agreement, all subsequent assignments of the original Mortgage have been
recorded in the appropriate jurisdictions wherein such recordation is necessary
to perfect the lien thereof against the creditors of the Seller.
Section 3.3 Representations and Warranties of the Purchaser.
The Purchaser hereby represents, warrants and covenants to the Seller, as of the
date of execution of this Agreement and the Closing Date, that:
(a) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Purchaser has the corporate power and authority to
purchase each Mortgage Loan and to execute, deliver and perform, and to enter
into and consummate all the transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Purchaser, and, assuming the due authorization,
execution and delivery hereof by the Seller, constitutes the legal, valid and
binding agreement of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Purchaser with this Agreement or the consummation by the Purchaser of any of the
transactions contemplated hereby, except such as have been made on or prior to
the Closing Date; and
(e) None of the execution and delivery of this Agreement,
the purchase of the Mortgage Loans from the Seller, the consummation of the
other transactions contemplated hereby, or the fulfillment of or compliance with
the terms and conditions of this Agreement, (i) conflicts or will conflict with
the charter or bylaws of the Purchaser or conflicts or will conflict with or
results or will result in a breach of, or constitutes or will constitute a
default or results or will result in an acceleration under, any term, condition
or provision of any indenture, deed of trust, contract or other agreement or
other instrument to which the Purchaser is a party or by which it is bound and
which is material to the Purchaser, or (ii) results or will result in a
violation of any law, rule, regulation, order, judgment or decree of any court
or governmental authority having jurisdiction over the Purchaser.
Section 3.4 Repurchase Obligation for Defective
Documentation and for Breach of a Representation or Warranty. (a) Each of the
representations and warranties contained in Sections 3.1 and 3.2 shall survive
the purchase by the Purchaser of the Mortgage Loans and the subsequent transfer
thereof by (i) the Purchaser to the Depositor and (ii) by the Depositor to the
Trustee, and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement, the Purchase and Sale Agreement or the
Pooling and Servicing Agreement.
(b) With respect to any representation or warranty contained
in Section 3.1 or 3.2 hereof that is made to the best of the Seller's knowledge,
if it is discovered by the Purchaser, the Servicer, any subservicer, the
Trustee, the Certificate Insurer or any Certificateholder or the holder of the
Exchangeable Certificate that the substance of such representation and warranty
was inaccurate as of the Closing Date and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the Seller's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach of
the applicable representation or warranty. Upon discovery by the Seller, the
Purchaser, the Servicer, any subservicer, the Trustee, the Certificate Insurer
or any Certificateholder or the holder of the Exchangeable Certificate of a
breach of any of such representations and warranties which materially and
adversely affects the value of Mortgage Loans or the interest of the
Certificateholders, or which materially and adversely affects the interests of
the Certificate Insurer, the Certificateholders or the holder of the
Exchangeable Certificate in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the Seller's
best knowledge), the party discovering such breach shall, pursuant to Section
3.3 of the Pooling and Servicing Agreement, give prompt written notice to the
others. Subject to the next to last paragraph of this Section 3.4, within 60
days of the earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Seller shall (i) promptly cure such breach in
all material respects, or (ii) purchase such Mortgage Loan at a purchase price
equal to the Principal Balance of such Mortgage Loan as of the date of purchase,
plus the greater of (1) all accrued and unpaid interest on such Principal
Balance and (2) 30 days' interest on such Principal Balance, computed at the
Mortgage Interest Rate, plus the amount of any unreimbursed Servicing Advances
made by the Servicer with respect to such Mortgage Loan, or (iii) cause the
removal of such Mortgage Loan from the Trust Fund (in which case it shall become
a Deleted Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans; provided, that, such substitution is effected not later than the
date which is 2 years after the Startup Day or at such later date, if the
Trustee and the Certificate Insurer receive an Opinion of Counsel to the effect
set forth below in this Section. Any such substitution shall be accompanied by
payment by the Seller of the Substitution Adjustment, if any, to be deposited in
the Collection Account or the Trustee Collection Account pursuant to the Pooling
and Servicing Agreement.
(c) As to any Deleted Mortgage Loan for which the Seller
substitutes, or has caused to be substituted therefor, a Qualified Substitute
Mortgage Loan or Loans, the Seller shall effect, or shall cause to be effected,
such substitution by delivering, or by causing the delivery, to the Trustee a
certification in the form attached to the Pooling and Servicing Agreement as
Exhibit H, executed by a Servicing Officer of the Servicer and the documents
described in Section 2.4(a) for such Qualified Substitute Mortgage Loan or
Loans. Pursuant to the Pooling and Servicing Agreement, upon receipt by the
Trustee of a certification of a Servicing Officer of the Servicer of such
substitution or purchase and, in the case of a substitution, upon receipt of the
related Trustee's Mortgage File, and the deposit of certain amounts in the
Trustee Collection Account pursuant to Section 2.4(b) of the Pooling and
Servicing Agreement (which certification shall be in the form of Exhibit H to
the Pooling and Servicing Agreement), the Trustee shall be required to release
to the Servicer for release to the Purchaser the related Trustee's Mortgage File
and shall be required to execute, without recourse, and deliver such instruments
of transfer furnished by the Purchaser as may be necessary to transfer such
Mortgage Loan to the Purchaser.
(d) Pursuant to the Pooling and Servicing Agreement, the
Servicer has agreed to deposit in the Trustee Collection Account all payments
received in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution. Monthly Payments received with respect to
Qualified Substitute Mortgage Loans on or before the date of substitution will
be retained by the Seller. The Trust Fund will own all payments received on the
Deleted Mortgage Loan on or before the date of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. Pursuant to the Pooling and Servicing
Agreement, the Servicer shall be required to give written notice to the Trustee
and the Certificate Insurer that such substitution has taken place and shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of the Pooling and Servicing Agreement and the substitution
of the Qualified Substitute Mortgage Loan. The parties hereto agree to amend
the Mortgage Loan Schedule accordingly. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of the Purchase
and Sale Agreement, the Pooling and Servicing Agreement and this Agreement in
all respects, and the Seller shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Sections 3.1 and 3.2 herein. On the
date of such substitution, the Seller will remit, or will cause to be remitted,
to the Servicer and pursuant to the Pooling and Servicing Agreement the Servicer
will deposit into the Trustee Collection Account an amount equal to the
Substitution Adjustment, if any.
(e) It is understood and agreed that the obligations of the
Seller set forth in Section 2.5 and this Section 3.4 to cure, purchase or
substitute for a defective Mortgage Loan as provided in Section 2.5 and this
Section 3.4 constitute the sole remedies of the Purchaser, the Depositor, the
Trustee, the Certificate Insurer and the Certificateholders respecting a breach
of the foregoing representations and warranties (other than the representation
and warranty set forth in Section 3.2(g) to the extent of any fines, penalties,
costs, or other damages or losses other than the lost economic value of the
Mortgage Loan, the value of which the remedies provided for in Section 2.5 and
3.4 shall be deemed adequate for).
(f) Any cause of action against the Seller relating to or
arising out of the breach of any representations and warranties or covenants
made in Section 2.5, 3.1 or 3.2 or this Section 3.4 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by any party and notice thereof
to the Seller, (ii) failure by the Seller to cure such breach or purchase or
substitute such Mortgage Loan as specified above, and (iii) demand upon the
Seller by the Purchaser for all amounts payable in respect of such Mortgage
Loan.
(g) Notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage Loan which is not in default or as to
which no default is imminent, no purchase or substitution pursuant to Section
2.5(b) or this Section 3.4 shall be made unless the Purchaser shall comply with
Section 3.4(g) of the Purchase and Sale Agreement.
(h) Upon discovery by the Purchaser or its subsequent
transferee that any Mortgage Loan does not constitute a Qualified Mortgage (as
defined in the Pooling and Servicing Agreement), the Purchaser shall promptly
(and in any event within 5 days of the discovery) give written notice thereof to
the Seller. In connection therewith, the Seller shall repurchase or substitute
a Qualified Substitute Mortgage Loan for the affected Mortgage Loan within 60
days of the earlier of such discovery by Purchaser or the Seller's receipt of
notice, in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Section 3.1 or 3.2. The Purchaser shall
reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section 3.1
or 3.2 hereof.
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ARTICLE IV
THE SELLER
Section 4.1 Covenants of the Seller. The Seller covenants
to the Purchaser as follows:
(a) The Seller shall cooperate with the Purchaser in making
available all information and taking all steps reasonably necessary to permit
accountants' letters to be delivered as necessary.
(b) The Seller agrees to satisfy or cause to be satisfied on
or prior to the Closing Date, all of the conditions to the Purchaser's
obligations set forth in Section 5.1 hereof that are within the Seller's (or its
agents') control.
(c) The Seller hereby agrees to do all acts, transactions,
and things and to execute and deliver all agreements, documents, instruments,
and papers by and on behalf of the Seller as the Purchaser or its counsel may
reasonably request in order to consummate the transfer of the Mortgage Loans to
the Purchaser and the subsequent transfer thereof to the Depositor.
Section 4.2 Merger or Consolidation. The Seller will keep
in full effect its existence, rights and franchises as a banking corporation and
will obtain and preserve its qualification to do business as a foreign
corporation, in each jurisdiction necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement. The Seller shall send notice of any merger or
consolidation to the Purchaser and any recipients designated by the Purchaser.
Section 4.3 [RESERVED]
Section 4.4 Indemnification. (a) The Seller agrees to
indemnify and to hold the Purchaser harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Purchaser may sustain in any way related
to the failure of the Seller to perform its duties in compliance with the terms
of this Agreement. The Purchaser shall immediately notify the Seller if a claim
is made by a third party with respect to this Agreement, and the Seller shall
have the right to assume the defense of any such claim and will pay or cause to
be paid all expenses in connection therewith, including reasonable counsel fees,
and will promptly cause to be paid, discharged and satisfied, any judgment or
decree which may be entered against the Seller or the Purchaser in respect of
such claim. Pursuant to the Pooling and Servicing Agreement, the Trustee shall
reimburse the Purchaser in accordance with the Purchase and Sale Agreement for
all amounts advanced by the Purchaser in accordance with the preceding sentence
except when the claim relates directly to the failure of the Seller to perform
its duties in compliance with the terms of this Agreement.
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ARTICLE V
CONDITIONS OF CLOSING
Section 5.1 Conditions of Purchaser's Obligations. The
obligations of the Purchaser to purchase the Mortgage Loans will be subject to
the satisfaction on the Closing Date of the following conditions. Upon payment
of the purchase price for the Mortgage Loans, such conditions shall be deemed
satisfied or waived.
(a) Each of the obligations of the Seller required to be
performed by it on or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of the Seller under this Agreement shall be true
and correct as of the Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default under this Agreement.
(b) The Mortgage Loans will be acceptable to the Purchaser,
in its sole discretion.
(c) The Purchaser shall have received the Mortgage Loan
Schedule and an executed receipt acknowledging the delivery of consideration in
exchange for the Mortgage Loans.
(d) The Seller shall have furnished the Purchaser with such
other certificates of its officers or others and such other documents or
opinions as the Purchaser or its counsel may reasonably request.
Section 5.2 Conditions of Seller's Obligations. The
obligations of the Seller under this Agreement shall be subject to the
satisfaction, on the Closing Date, of the following conditions:
(a) Each of the obligations of the Purchaser required to be
performed by it at or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of the Purchaser contained in this Agreement
shall be true and correct as of the Closing Date.
(b) The Seller shall have received an executed receipt
acknowledging delivery of the Mortgage Loans and the Mortgage Loan Schedule to
the Trustee.
(c) The Purchaser shall have furnished the Seller with such
other certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Agreement as the Seller
may reasonably request.
Section 5.3 Termination of Purchaser's Obligations. The
Purchaser may terminate its obligations hereunder by notice to the Seller at any
time before delivery of and payment of the purchase price for the Mortgage Loans
if: (a) any of the conditions set forth in Section 5.1 are not satisfied when
and as provided therein; (b) there shall have been the entry of a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller, or for the winding up or
liquidation of the affairs of the Seller; (c) there shall have been the consent
by the Seller to the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller or of or relating to
substantially all of the property of the Seller; (d) any purchase and assumption
agreement with respect to the Seller or the assets and properties of the Seller
shall have been entered into; or (e) a Termination Event shall have occurred.
The termination of the Purchaser's obligations hereunder shall not terminate the
Purchaser's rights hereunder or its right to exercise any remedy available to it
at law or in equity.
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ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered to or mailed by registered mail, postage
prepaid, or transmitted by telex or telegraph and confirmed by a similar mailed
writing, if to the Purchaser, addressed to the Purchaser at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, with a copy
addressed to ▇▇▇▇▇ Home Equity Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, or to such other address as
the Purchaser may designate in writing to the Seller and if to the Seller,
addressed to the Seller at ▇▇▇▇▇ Union Bank and Trust Company, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, or to such
other address as the Seller may designate in writing to the Purchaser.
Section 6.2 Severability of Provisions. Any part,
provision, representation, warranty or covenant of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation, warranty or
covenant of this Agreement which is prohibited or unenforceable or is held to be
void or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto waive any provision
of law which prohibits or renders void or unenforceable any provision hereof.
Section 6.3 Agreement of Seller. The Seller agrees to
execute and deliver such instruments and take such actions as the Purchaser may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement.
Section 6.4 Survival. The parties to this Agreement agree
that the representations, warranties and agreements made by each of them herein
and in any certificate or other instrument delivered pursuant hereto shall be
deemed to be relied upon by the other party hereto, notwithstanding any
investigation heretofore or hereafter made by such other party or on such other
party's behalf, and that the representations, warranties and agreements made by
the parties hereto in this Agreement or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans.
Section 6.5 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 6.6 Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as expressly permitted by
the terms hereof, this Agreement may not be assigned, pledged or hypothecated by
any party hereto to a third party without the written consent of the other party
to this Agreement; provided, however, that the Purchaser may assign its rights
hereunder without the consent of the Seller.
Section 6.7 Confirmation of Intent; Grant of Security
Interest. It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Seller to the Purchaser as contemplated by this
Mortgage Loan Sale Agreement be, and be treated for all purposes as, a sale by
the Seller to the Purchaser of the Mortgage Loans. It is, further, not the
intention of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Seller to the Purchaser to secure a debt or other obligation of the
Seller. However, in the event that, notwithstanding the intent of the parties,
the Mortgage Loans are held to continue to be property of the Seller then (a)
this Mortgage Loan Sale Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code;
(b) the transfer of the Mortgage Loans provided for herein shall be deemed to be
a grant by the Seller to the Purchaser of, and the Seller hereby does grant, a
security interest in all of the Seller's right, title and interest in and to the
Mortgage Loans and all amounts payable on the Mortgage Loans in accordance with
the terms thereof and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property to secure
a loan from the Purchaser in the amount equal to the purchase price described in
Section 2.2 hereof; (c) the possession by the Purchaser of Mortgage Notes and
such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-305 of the Uniform Commercial Code; and (d) notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or agents (as
applicable) of the Purchaser for the purpose of perfecting such security
interest under applicable law. Any assignment of the interest of the Purchaser
pursuant to any provision hereof shall also be deemed to be an assignment of any
security interest created hereby. The Seller and the Purchaser shall, to the
extent consistent with this Mortgage Loan Sale Agreement, take such actions as
may be necessary to ensure that, if this Mortgage Loan Sale Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first or second
priority under applicable law and will be maintained as such throughout the term
of this Agreement.
Section 6.8 Miscellaneous. This Agreement supersedes all
prior agreements and understandings relating to the subject matter hereof.
Section 6.9 Amendments. This Agreement may be amended from
time to time by the Seller and the Purchaser by written agreement with the
written consent of the Certificate Insurer.
Section 6.10 Third Party Beneficiaries. The Seller
intends that the Certificate Insurer and the Trustee are third party
beneficiaries of each of the Seller's representations and warranties and
covenants stated herein.
Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
Section 6.12 Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties to this Mortgage Loan Sale
Agreement have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.
IHE FUNDING CORP., as Purchaser
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Treasurer
▇▇▇▇▇ UNION BANK AND TRUST
COMPANY, as Seller
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇ UNION BANK AND TRUST
COMPANY, as SELLER
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President - Funds Management
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On December 6, 1995 before me, the undersigned, a Notary Public
in and for said County and State, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be Vice President and Treasurer [title] of IHE Funding Corp., a Delaware
corporation, the corporation that executed the within Mortgage Loan Sale
Agreement on behalf of said corporation, and acknowledged to me that said
corporation executed it.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Notary Public
My Commission expires:
July 18, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ )
) ss.
COUNTY OF ▇▇▇▇▇▇▇▇▇▇▇ )
Before me the undersigned, a Notary Public for ▇▇▇▇▇▇▇▇ County, State of
Indiana, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
acknowledged the execution of this instrument this 5th day of December, 1995.
/s/ HOPE ▇. ▇▇▇▇▇▇▇
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Hope ▇. ▇▇▇▇▇▇▇
My Commission expires:
August 12, 1998