Exhibit 2.2
MORTGAGE LOAN PURCHASE AGREEMENT
between
BAY VIEW BANK, NATIONAL ASSOCIATION ("Seller")
and
WASHINGTON MUTUAL BANK, FA ("Purchaser")
Dated as of July 22, 2002
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS................................................................1
Section 1.01 Definitions..........................................................1
ARTICLE II. AGREEMENT TO PURCHASE......................................................9
Section 2.01 Agreement to Purchase................................................9
Section 2.02 SBO Closing..........................................................9
ARTICLE III. MORTGAGE PREPAYMENTS......................................................10
Section 3.01 Mortgage Prepayments................................................10
ARTICLE IV. PURCHASE PRICE; PAYMENT...................................................10
Section 4.01 Purchase Price......................................................10
Section 4.02 Document Deficiencies; Holdback.....................................11
ARTICLE V. CONVEYANCE FROM SELLER TO PURCHASER.......................................12
Section 5.01 Conveyance of Mortgage Loans........................................12
Section 5.02 Additional Transfer Provisions......................................12
Section 5.03 Delivery of Mortgage Loan Documents.................................13
ARTICLE VI. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES
FOR BREACH................................................................15
Section 6.01 Representations and Warranties Regarding the Seller.................15
Section 6.02 Representations, Warranties and Covenants Regarding Individual
Mortgage Loans......................................................18
Section 6.03 Remedies for Breach of Seller's Representations, Warranties
and Covenants.......................................................31
Section 6.04 Survival of Representations, Warranties and Covenants;
Limitation Period...................................................33
ARTICLE VIA. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER................34
Section 6.01A Representations and Warranties Regarding the Purchaser..............34
Section 6.02A Survival of Representations, Warranties and Covenants...............35
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Page
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ARTICLE VII. INTERIM SERVICING; TRANSFER OF SERVICING..................................36
Section 7.01 Interim Servicing...................................................36
Section 7.02 Transfer of Servicing...............................................36
Section 7.03 Substitution of Trustee.............................................36
ARTICLE VIII. CLOSING...................................................................36
Section 8.01 Closing.............................................................36
Section 8.02 Conditions to the Purchaser's Closing Obligations...................36
Section 8.03 Conditions to the Seller's Closing Obligations......................37
Section 8.04 SBO Closing Conditions..............................................38
ARTICLE IX. CLOSING DOCUMENTS.........................................................38
Section 9.01 Closing Documents...................................................38
Section 9.02 SBO Closing Documents...............................................39
ARTICLE X. COSTS.....................................................................39
Section 10.01 Costs...............................................................39
ARTICLE XI. TERMINATION...............................................................40
Section 11.01 Termination.........................................................40
ARTICLE XII. MISCELLANEOUS.............................................................40
Section 12.01 Notices.............................................................40
Section 12.02 Severability Clause.................................................41
Section 12.03 Counterparts........................................................41
Section 12.04 Governing Law.......................................................41
Section 12.05 Recordation of Agreement............................................41
Section 12.06 Intention of the Parties............................................42
Section 12.07 Successors and Assigns; Assignment of Agreement.....................42
Section 12.08 Confidentiality; Press Releases.....................................42
Section 12.09 Attorneys' Fees.....................................................43
Section 12.10 Complete Agreement; Waivers.........................................43
Section 12.11 Exhibits............................................................43
Section 12.12 General Interpretive Principles.....................................43
Section 12.13 Reproduction of Documents...........................................44
Section 12.14 Further Agreements..................................................44
Section 12.15 Recordability of Assignments of Mortgage............................44
Section 12.16 No Solicitation.....................................................44
Section 12.17 Survival............................................................44
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LIST OF EXHIBITS
EXHIBIT 1 MORTGAGE LOAN SCHEDULE
EXHIBIT 2 SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 3 ASSIGNMENT AND CONVEYANCE
EXHIBIT 4 NEGATIVE ESCROWS
EXHIBIT 5 CONTENTS OF EACH SERVICING FILE
EXHIBIT 6 SPECIAL ENVIRONMENTAL LOANS
EXHIBIT 7 INTERIM SERVICING AGREEMENT
EXHIBIT 8 ESCROW AND BAILEE AGREEMENT
EXHIBIT 9 LOST NOTE AFFIDAVIT LOANS
EXHIBIT 10 NOTICES TO/CONSENTS FROM INSURERS
EXHIBIT 11 LOANS SUBJECT TO BANKRUPTCY
EXHIBIT 12 LOANS WITH DELINQUENT TAXES
EXHIBIT 13 SBOs
EXHIBIT 14 LOANS WITH DELINQUENT INSURANCE PREMIUMS
EXHIBIT 15 NEW MORTGAGE LOANS
EXHIBIT 16 DOCUMENT DEFICIENCIES
EXHIBIT 17 MORTGAGE LOANS WITH PLEDGED LOAN PROCEEDS
EXHIBIT 18 POWER OF ATTORNEY
EXHIBIT 19 MORTGAGE LOAN PAYMENT EXCEPTIONS
EXHIBIT 20 SENIOR LIENS AND GROUND LEASES
EXHIBIT 21 CROSS-COLLATERALIZED OR CROSS-DEFAULTED MORTGAGE LOANS
EXHIBIT 22 SPECIAL MULTI-FAMILY PROPERTIES
EXHIBIT 23 UNDERWRITING GUIDELINE EXCEPTIONS
EXHIBIT 24 CLASSIFIED MORTGAGE LOANS
EXHIBIT 25 SECTION 6.02(VV) ITEMS
EXHIBIT 26 CUSTODIAL ACCOUNTS; MORTGAGE LOANS WITH ESCROW PAYMENTS
EXHIBIT 27 MORTGAGE LOANS WITH AUTOMATIC DEBIT
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MORTGAGE LOAN PURCHASE AGREEMENT
This MORTGAGE LOAN PURCHASE AGREEMENT (the "Agreement"), dated as
of July 22, 2002, by and between WASHINGTON MUTUAL BANK, FA, a federal
association, having an office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "Purchaser"), and BAY VIEW BANK, NATIONAL ASSOCIATION, a national banking
association, having an office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain multifamily and
commercial mortgage loans on a servicing-released basis (except as herein
expressly provided);
WHEREAS, each Mortgage Loan is secured by a mortgage or deed of
trust creating a lien on a multifamily dwelling or commercial real property
located in the jurisdiction indicated on the Mortgage Loan Schedule for the
Mortgage Loans; and
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner of the sale by the Seller and the purchase by the Purchaser of such
Mortgage Loans;
NOW, THEREFORE, in consideration of the promises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
ARTICLE I.
DEFINITIONS.
Section 1.01 Definitions. For purposes of this Agreement the
following capitalized terms shall have the respective meanings set forth below:
Accepted Servicing Practices: With respect to any Mortgage Loan,
such mortgage servicing practices of and standard of care employed by prudent
servicers that service mortgage loans of the same type as such Mortgage Loans in
the jurisdiction where the related Mortgaged Property is located; such standard
of care shall not be lower than that the Seller customarily employs and
exercises in servicing and administering similar mortgage loans for its own
account, and shall be in full compliance with all federal, state and local laws,
ordinances, rules and regulations. Accepted Servicing Practices shall in all
events incorporate the loan collection, administration, enforcement and other
related requirements of the applicable Mortgage Loan Documents.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Ancillary Fees: Charges for late fees relating to delinquent
Mortgage Loan Payments (to the extent permitted by the applicable Mortgage Loan
Documents), charges for dishonored checks, pay-off fees and fax fees (but not
including prepayment premiums, yield maintenance premiums, modification fees,
default interest, assumption fees, or other fees and charges of any kind
collected from or assessed against the Mortgagor, all which belong to and shall
be remitted to Purchaser on the next Remittance Date after received).
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan (or, if applicable,
at any time subsequent thereto) as the value of the Mortgaged Property.
Assignment of Mortgage: With respect to each Mortgage, an
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under and complying with the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.
Bailee: Deutsche Bank or other entity reasonably designated by
the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions, in the State of
New York, the State of Washington, or the state in which the Seller's operations
are located, are authorized or obligated by law or executive order to be closed.
Closing Date: The date on which the Purchaser shall purchase, and
the Seller shall sell, the Mortgage Loans listed on the Mortgage Loan Schedule.
The Closing Date shall be August 7, 2002, or such other date as may be agreed
upon by the parties.
Custodial Accounts: The separate account or accounts created and
maintained by the Seller for the benefit of the Purchaser or the Mortgagors in
which Custodial Funds are deposited and held.
Custodial Funds: All funds held in trust for and for the benefit
of Purchaser or the Mortgagors by or on behalf of Seller with respect to the
Mortgage Loans, including, but not limited to, all principal and interest funds,
buydown funds, Escrow Payments, funds from hazard insurance loss drafts and
other mortgage escrow and
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impound amounts (including interest accrued thereon for the benefit of the
Mortgagors under the Mortgage Loans, if required by law or contract) maintained
by or on behalf of the Seller relating to the Mortgage Loans.
Cut-off Date: The close of business on August 5, 2002.
Data File: Collectively, with respect to each Mortgage Loan, the
data files of Seller, Safeco with respect to insurance on each Mortgaged
Property and LERETA Corp. and First American Real Estate Information Services,
Inc. with respect to taxes and assessments payable on each Mortgaged Property,
in each case in form and containing the information reasonably acceptable to the
Purchaser, in order to, among other things, facilitate an efficient and accurate
transition of servicing of the Mortgage Loans from the Seller to the Purchaser
(and its servicing platform) in accordance with the Interim Servicing Agreement.
Determination Date: A date and time occurring twice each month as
of 5:00 p.m. California time on the Business Day immediately preceding each
Remittance Date.
DSCR: The debt service coverage ratio with respect to a Mortgagor
and the related Mortgaged Property.
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace or, as applicable, any
cure period following notice of delinquency or other default.
Escrow and Bailee Agreement: That certain agreement in the
general form attached hereto as Exhibit 8, as such form is ultimately negotiated
between Bailee and the Purchaser, subject to the reasonable approval of the
Seller. The Seller, the Purchaser and the Bailee shall be parties to the Escrow
and Bailee Agreement, which shall provide that all costs and expenses of the
Bailee shall be shared equally by the Seller and the Purchaser.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rates,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
First Remittance Date: The 15th day (or if such 15th day is not a
Business Day, the first Business Day immediately thereafter) of any calendar
month.
Gross Margin: With respect to each adjustable rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the
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applicable Index to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan.
Holdback: That portion of the Purchase Price, initially
$25,000,000, which amount shall be payable to the Seller by the Purchaser in
installments after the Closing Date under the terms and conditions set forth in
Section 4.02 below.
Index: The index rate set forth in each adjustable rate Mortgage
Note, which is as specified on the Mortgage Loan Schedule.
Insurer: FHA, VA or any private mortgage insurer and any insurer
or guarantor under any standard hazard insurance policy, any federal flood
insurance policy, any title insurance policy, any earthquake insurance policy or
other insurance policy, and any successor thereto, with respect to the Mortgage
Loan or the Mortgaged Property.
Interest Rate Adjustment Date: With respect to each adjustable
rate Mortgage Loan, the date, specified in the related Mortgage Note, on which
the Mortgage Interest Rate is to be adjusted.
Interest Rate Decrease Maximum: As to each adjustable rate
Mortgage Loan, the maximum amount, if any, that the Mortgage Interest Rate can
adjust downwards on any Interest Rate Adjustment Date, determined in accordance
with the related Mortgage Note.
Interest Rate Increase Maximum: As to each adjustable rate
Mortgage Loan, the maximum amount, if any, that the Mortgage Interest Rate can
adjust upwards on any Interest Rate Adjustment Date, determined in accordance
with the related Mortgage Note.
Interim Period: As to each Mortgage Loan, the period of time
between the Closing Date and the Transfer Date for such Mortgage Loan.
Interim Servicing Agreement: That certain Interim Servicing
Agreement by and between the Seller and the Purchaser in substantially the form
attached hereto as Exhibit 7.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the ratio (expressed as a percentage) of the original outstanding principal
amount of the Mortgage Loan or the current outstanding principal amount, as the
case may be, to the lesser of (a) the Appraised Value of the Mortgaged Property
at origination or (b) if the Mortgage Loan was made to finance the acquisition
of the related Mortgaged Property, the purchase price of the Mortgaged Property.
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Loss: Any and all losses, damages, deficiencies, claims,
reasonable and necessary costs or expenses, including without limitation,
attorneys' fees and disbursements, court costs, and internal and administrative
costs and expenses.
Maximum Monthly Payment Adjustment: As to each adjustable rate
Mortgage Loan, the maximum amount, if any, that the Monthly Payment can adjust
upwards on any Interest Rate Adjustment Date, determined in accordance with the
related Mortgage Note.
Maximum Mortgage Interest Rate: As to each adjustable rate
Mortgage Loan, the maximum rate of interest, if any, that may be charged
pursuant to the related Mortgage Note.
Minimum Mortgage Interest Rate: As to each adjustable rate
Mortgage Loan, the minimum rate of interest, if any, that may be charged
pursuant to the related Mortgage Note.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage or deed of trust securing a Mortgage Note,
which creates a lien on an estate in real property that secures the Mortgage
Note.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note, which shall be fixed with respect to fixed rate Mortgage Loans
and adjusted from time to time with respect to adjustable rate Mortgage Loans.
In the case of each SBO, Mortgage Interest Rate shall be understood to mean the
net Mortgage Interest Rate contractually payable to the Seller under the
applicable SBO documentation.
Mortgage Interest Rate Cap: With respect to an adjustable rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan (including the
Mortgage Loans set forth on Exhibit 13) that is the subject of this Agreement,
each Mortgage Loan originally sold and subject to this Agreement being
identified on the Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage Loan Documents, the Servicing Rights to the Mortgage
Loan (except with respect to Mortgage Loans set forth on Exhibit 13), all
Custodial Funds and, from and after the Cut-off Date, the Monthly Payments,
principal prepayments, liquidation proceeds, condemnation proceeds, insurance
proceeds, and all other rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan, excluding Repurchased Mortgage Loans.
The Mortgage Loans are identified on Attachment I hereto, subject to (a) the
exclusion therefrom of any Mortgage Loan listed on Exhibit 6 hereto as to which
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the environmental insurance policy referred to in the first paragraph of Section
4.01 is determined not to apply, and (b) the further exclusion therefrom of
certain SBOs in accordance with Section 2.02 below. The identification of the
Mortgage Loans as set forth in the preceding sentence shall be superceded by the
final forms of Exhibits 1 and 13 as attached to this Agreement in conformity
with Sections 8.02(d) and 8.03(c) below.
Mortgage Loan Documents: The documents listed in Section 5.03(a)
and required to be delivered to the Purchaser or the Bailee on the Closing Date
with respect to each Mortgage Loan and any other documents or instruments
evidencing, securing or otherwise executed and delivered in favor of the lender
with respect to a Mortgage Loan (or in favor of the Seller in the case of SBOs).
Mortgage Loan Schedule: The schedule of Mortgage Loans attached
as Exhibit 1 (as the same shall be updated and delivered on the Closing Date in
accordance with Section 9.01 below) setting forth the following information with
respect to each Mortgage Loan (subject to appropriate variation as to SBOs, as
to which detailed supplementary information is set forth on Exhibit 13 hereto):
(1) the Seller's Mortgage Loan identifying number; (2) the Mortgagor's name; (3)
the street address of the Mortgaged Property including the state and zip code;
(4) the property type; (5) the original amortization term; (6) the Appraised
Value of the Mortgaged Property at origination; (7) the Mortgage Interest Rate
as of the Cut-off Date; (8) the Due Date under the Mortgage Loan; (9) the stated
maturity date; (10) the amount of the Monthly Payment as of the Cut-off Date;
(11) with respect to adjustable rate Mortgage Loans, the Maximum Monthly Payment
Adjustment; (12) the original principal amount of the Mortgage Loan; (13) the
principal balance of the Mortgage Loan on the Cut-off Date; (14) with respect to
adjustable rate Mortgage Loans, the next Interest Rate Adjustment Date after the
Cut-off Date; (15) with respect to adjustable rate Mortgage Loans, the Gross
Margin; (16) with respect to adjustable rate Mortgage Loans, the Maximum
Mortgage Interest Rate; (17) with respect to adjustable rate Mortgage Loans, the
Minimum Mortgage Interest Rate; (18) with respect to adjustable rate Mortgage
Loans, the Interest Rate Increase Maximum; (19) with respect to adjustable rate
Mortgage Loans, the Interest Rate Decrease Maximum; (20) with respect to
adjustable rate Mortgage Loans, a code indicating the type of Index; (21) the
most recent reported total monthly rent, if available; (22) the most recent
reported NOI and period covered thereby, if available; (23) the most recent DSCR
and the effective date thereof, calculated from reported information, if
available; (24) the last property inspection date, if available; (25) the last
Due Date for which a Monthly Payment has been made; (26) with respect to
multifamily Mortgage Loans, a code indicating number of units at the Mortgaged
Property; (27) the applicable late charge; (28) a code indicating the number of
days per month and the number of days per year on which the monthly interest
amount due is calculated (example: "Actual/360" or "360/360"); (29) a code
indicating the maximum allowable amount of negative amortization, expressed as a
percentage of the original loan balance; (30) in the case of each SBO, the
applicable base servicing fee (defined as the
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difference between the gross Mortgage Interest Rate on the loan and the net
Mortgage Interest Rate contractually payable to the Seller under the applicable
SBO documentation); (31) a code indicating each Mortgage Loan with a balloon
payment of principal at maturity; and (32) the maturity date of the Mortgage
Loan. With respect to the Mortgage Loans in the aggregate, the Mortgage Loan
Schedule shall set forth the following information, as of the Cut-off Date: (a)
the number of Mortgage Loans; and (b) the current aggregate outstanding
principal balance of the Mortgage Loans. The Mortgage Loan Schedule shall be
provided in printed format, as well as in electronic form in Excel format.
Mortgage Note: The note or other evidence of the indebtedness of
a Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Negative Escrows: Amounts advanced by the Seller out of its own
funds with respect to the Mortgage Loans, which advances are ultimately
reimbursable from the related Mortgagor under the terms of the Mortgage Loan
Documents, a list of advances (with amounts as of the Cut-off Date) and related
Mortgage Loans being contained in Exhibit 4 hereto.
New Mortgage Loans: Those Mortgage Loans closed and funded by the
Seller on or after May 1, 2002 and not later than July 15, 2002, a list of such
Mortgage Loans being contained in Exhibit 15 hereto.
NOI: Net operating income generated from a Mortgaged Property.
OCC: The Office of the Comptroller of the Currency within the
U.S. Department of the Treasury, and any successor thereto.
Officer's Certificate: A certificate signed by the Chairman of
the Board or the Vice Chairman of the Board or the President or a Vice President
and by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser pursuant to
this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Seller, reasonably acceptable to the Purchaser.
Parties: The Seller and the Purchaser.
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Purchase Price: The price paid by the Purchaser to the Seller in
exchange for the Mortgage Loans purchased hereunder, as calculated in accordance
with Section 4.01 of this Agreement.
Purchase Price and Terms Letter: If applicable, the letter
agreement dated __________, 2002, by and between the Seller and the Purchaser
setting forth the specific Purchase Price (expressed as percentage(s) of par
with respect to individual, groups or the entire portfolio of Mortgage Loans, as
applicable, and setting forth any additional terms and conditions of the
transaction on a basis consistent with this Agreement, for each Mortgage Loan to
be purchased hereunder.
Remittance Date: Either the First Remittance Date or the Second
Remittance Date, as applicable, of any calendar month.
Repurchased Mortgage Loan: A Mortgage Loan that is repurchased by
the Seller from the Purchaser pursuant to the terms of this Agreement.
Repurchase Price: With respect to any Mortgage Loan, a price
equal to the sum of (i) the product of (x) the percentage of par applicable to
such Mortgage Loan, as referred to in Section 4.01 below or, as applicable,
otherwise stated in the Purchase Price and Terms Letter, and (y) the unpaid
principal balance of such Mortgage Loan, plus (ii) accrued interest on such
unpaid principal balance of such Mortgage Loan at the Mortgage Interest Rate
from the last date through which interest has been paid and distributed to the
Purchaser to the date of repurchase, plus (iii) the outstanding amount of any
Negative Escrow related to such Mortgage Loan, plus (iv) any outstanding amounts
advanced by the Purchaser out of its own funds with respect to such Mortgage
Loan on or after the Closing Date, which advances are ultimately reimbursable
from the related Mortgagor under the terms of the Mortgage Loan Documents.
SBOs: Those Mortgage Loans as to which the Seller owns a
participating interest purchased from the originator of such Mortgage Loans, a
list of such Mortgage Loans being contained in Exhibit 13 attached hereto.
Second Remittance Date: The last Business Day of any calendar
month.
Servicing File: The documents listed in Exhibit 5 as required to
be delivered to Purchaser with respect to each Mortgage Loan.
Servicing Rights: The rights and obligations to administer,
collect the payments for the reduction of principal and application of interest,
collect payments on account of taxes and insurance, pay taxes and insurance,
remit collected payments, modify, waive or amend any terms or provisions of the
Mortgage Loan Documents, provide foreclosure and default management services,
provide full escrow administration and any other obligations required or in
connection with the Mortgage Loans, together
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with (a) the rights to any monies in any escrow or reserve accounts relating to
the Mortgage Loans, (b) rights in all agreements or documents creating, defining
or evidencing any such servicing rights to the extent they relate to such
servicing rights and all rights of the Seller thereunder, (c) any and all
documents, files, records, servicing files, servicing documents, servicing
records, data tapes, computer records, or other information pertaining to a
Mortgage Loan or pertaining to the past, present or prospective servicing or a
Mortgage Loan, and (d) the right to receive any fees arising from or connected
to the Mortgage Loans, and all rights, powers and privileges incident to any of
the foregoing.
Transfer Date: Each date on which the Purchaser shall assume
servicing obligations with respect to a Mortgage Loan, not to exceed 120 days
after the Closing Date, all as more particularly provided in the Interim
Servicing Agreement.
ARTICLE II.
AGREEMENT TO PURCHASE.
Section 2.01 Agreement to Purchase. On the Closing Date, the
Seller agrees to sell, and the Purchaser agrees to purchase, the Mortgage Loans
set forth on the Mortgage Loan Schedule on the terms and conditions set forth in
this Agreement and all related closing documents.
Section 2.02 SBO Closing. Notwithstanding any other provision in
this Agreement, the closing date for the purchase and sale of the SBOs shall be
August 30, 2002 or such earlier or later date as the Parties may mutually agree
upon in writing (the "SBO Closing Date"), and the Cut-off Date therefor shall,
accordingly, be August 28, 2002. As to all matters pertaining to the closing of
the purchase and sale of the SBOs under this Agreement, all references herein to
the "Closing Date" shall be understood to mean and refer to the "SBO Closing
Date", provided that the foregoing shall not extend the 12-month limitation
period referred to in Section 6.04(b). Not later than the SBO Closing Date, the
Seller shall deliver to the Purchaser, pursuant to Section 9.02 below, each of
the items referred to in the last sentence of Section 5.03(a) and in Section
9.02 below, together with an appropriate form of assignment (substantively
similar to Exhibit 3 hereto) sufficient to assign and transfer to the Purchaser
all rights, title and interest of the Seller in and to the SBOs, and further
together with all information with regard to the underlying Mortgage Loans the
subject of each SBO (as referred to generally in the definition of Mortgage Loan
Schedule) sufficient to permit the Purchaser to track (independent of the
servicer) the monthly payment obligations of the borrowers under such underlying
Mortgage Loans. In the event that the Seller is not able to deliver, on a timely
basis, any of the items referred to in the preceding sentence with respect to an
SBO, despite the exercise of all reasonable best efforts on the part of the
Seller, then such SBO shall be excluded from the Mortgage Loans to be purchased
by the Purchaser on the SBO Closing Date. The Seller shall exercise all
reasonable best efforts to provide to the Purchaser, as a part of the Servicing
File for each underlying Mortgage Loan the subject
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of an SBO, copies of the Mortgage Loan Documents for each such underlying
Mortgage Loan.
ARTICLE III.
MORTGAGE PREPAYMENTS.
Section 3.01 Mortgage Prepayments. Any Mortgage Loans that have
been prepaid in full on or prior to the Closing Date shall be deleted from the
Mortgage Loan Schedule by the Seller and shall not be purchased by the
Purchaser.
ARTICLE IV.
PURCHASE PRICE; PAYMENT.
Section 4.01 Purchase Price. The Purchase Price for the Mortgage
Loans purchased hereunder shall be (a) one hundred and one-quarter percent
(100.25%) multiplied by the aggregate principal balance, as of the Cut-off Date,
of the Mortgage Loans listed on the Mortgage Loan Schedule, minus (b) the
environmental insurance policy premium payable by the Purchaser to American
International Group (or such other insurer as the Purchaser shall approve) for
environmental insurance coverage satisfactory to the Purchaser with respect to
those Mortgage Loans listed on Exhibit 6 hereto which are purchased by the
Purchaser hereunder. The Purchase Price shall be payable in accordance with
ARTICLE VIII below, and subject to the Holdback as provided in Section 4.02.
In addition to the Purchase Price as described above, the
Purchaser shall pay to the Seller, at closing, accrued interest on the unpaid
principal amount of each Mortgage Loan from the last date through which interest
has been paid to the Seller thereon to, but not including, the Closing Date,
plus any Negative Escrows related thereto outstanding as of the Closing Date.
The Purchase Price payable on the initial Closing Date shall not
include that portion thereof attributable to, and payable by the Purchaser with
respect to, the SBOs; rather, such portion of the Purchase Price shall be
payable by the Purchaser to the Seller on the SBO Closing Date pursuant to
Section 2.02 above, and shall be calculated as of the applicable Cut-off Date
with respect thereto based upon those SBOs so purchased.
With respect to the Mortgage Loans, the Purchaser shall be
entitled to (1) all principal received after the Cut-off Date, (2) all other
recoveries collected after the Cut-off Date, (3) all payments of interest on the
Mortgage Loans received after the Cut- off Date, (4) all Servicing Rights from
and after the Closing Date (except with respect to the Mortgage Loans set forth
on Exhibit 13), subject to the Seller's rights and obligations under the Interim
Servicing Agreement, and (5) all Negative Escrow recoveries collected or
received after the Cut-off Date. The outstanding principal balance of each
Mortgage
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Loan as of the Cut-off Date is determined after application of payments of
principal received on or before the Cut-off Date. Payments of principal and
interest prepaid for a due date beyond the Cut-off Date shall be applied to the
principal balance prior to the Cut-off Date.
Section 4.02 Document Deficiencies; Holdback.
(a) Attached hereto as Exhibit 16 is a listing of document
deficiencies identified by the Parties prior to the Closing Date. Not later than
90 days following the Closing Date, the Seller shall correct, or cause to be
corrected, all such document deficiencies in a manner satisfactory to the
Purchaser in all material respects. At the election of the Purchaser, any
Mortgage Loan as to which any document deficiency applicable thereto has not
been so corrected within such 90-day period shall be repurchased by the Seller,
not later than 30 days following written demand from the Purchaser, at the
applicable Repurchase Price and generally in accordance with the provisions set
forth in Section 6.03 hereof.
(b) The Purchaser shall withhold from the Purchase Price paid to
the Seller on the Closing Date the full amount of the Holdback, initially in the
amount of $25,000,000. The unpaid amount of the Holdback shall increase by a per
annum accrual factor equal to the three-month certificate of deposit rate quoted
by the Purchaser on the Closing Date. Subject to the conditions to payment
referred to below, the Holdback (plus, in each case, the then unpaid accrual
thereon as referred to above) shall be payable by the Purchaser to the Seller as
follows:
(i) $10,000,000 on the date three Business Days following the
Second Remittance Date in August 2002;
(ii) $5,000,000 on the date three Business Days following the
Second Remittance Date in September 2002;
(iii) $3,000,000 on the date three Business Days following
the Second Remittance Date in October 2002; and
(iv) The remaining $7,000,000 on the earlier of (1) 30 days
following the final Transfer Date of all Mortgage Loans under the
Interim Servicing Agreement, or (2) December 27, 2002.
Each of the foregoing payments of the Holdback shall be subject to the condition
that there shall then exist no payment default or material non-payment default
by the Seller under the Interim Servicing Agreement (including, without
limitation, the Seller's obligations to deliver to the Purchaser all Mortgage
Loan Documents, Servicing Files, Custodial Funds and pledged loan proceeds
referred to on Exhibit 26, and to deliver to the Mortgagors notices of the
transfer of servicing). In addition, a further condition to the
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final payment of the Holdback pursuant to clause (iv) above shall be full
compliance by the Seller with its obligations under Section 4.02(a) above. The
Purchaser shall pay to the Seller each installment of the Holdback (including
the accrual thereon referred to above) by wire transfer of immediately available
funds to the account designated by the Seller. Nothing in this Section 4.02
shall limit any other right or remedy of the Purchaser in the enforcement of the
obligations of the Seller under this Agreement, the Interim Servicing Agreement
or any other closing document.
(c) Consistent with the provisions of this Section 4.02, the
Seller shall execute and file, not later than Closing Date, a UCC financing
statement in favor of the Purchaser with respect to the full amount of the
Holdback. Such financing statement shall be filed in such jurisdiction(s) as
shall be necessary in order to perfect fully the Purchaser's interest therein.
Upon payment of the entire Holdback to the Seller, the Purchaser shall promptly
execute and file a release for each such financing statement. The Seller shall
provide evidence to the Purchaser of the appropriate place(s) of filing in
accordance with Uniform Commercial Code Section 9307(f). The filing of any
financing statement pursuant to this Section 4.02(c) shall not indicate that the
Parties intended to create a secured transaction pursuant to this Section 4.02.
ARTICLE V.
CONVEYANCE FROM SELLER TO PURCHASER.
Section 5.01 Conveyance of Mortgage Loans. As of the Closing
Date, the Seller hereby sells, transfers, assigns and conveys to the Purchaser,
on a "servicing released" basis except as expressly referred to below, the
Mortgage Loans and the related Mortgage Loan Documents and all other rights and
interests related thereto including, without limitation, all Servicing Rights
with respect to such Mortgage Loans (except with respect to the Mortgage Loans
set forth on Exhibit 13), and any and all Custodial Funds (including Escrow
Payments) with respect to such Mortgage Loans. The Seller, simultaneously with
the delivery of the Mortgage Loan Schedule with respect to the Mortgage Loans to
be purchased on the Closing Date, shall execute and deliver at closing an
Assignment and Conveyance in the form attached hereto as Exhibit 3, and the
beneficial ownership of each Mortgage Loan Document and Servicing File is and
shall be vested in the Purchaser.
Section 5.02 Additional Transfer Provisions. The transfer of
ownership to each Mortgage Loan shall be in the name of the Purchaser or one or
more designees of the Purchaser, as the Purchaser shall select. All rights
arising out of the Mortgage Loans, including, but not limited to, all funds
received by the Seller after the Cut-off Date on or in connection with a
Mortgage Loan, shall be vested in the Purchaser or one or more designees of the
Purchaser and shall be remitted by Seller to the Purchaser pursuant to the terms
of the Interim Servicing Agreement or otherwise.
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The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Section 5.03 Delivery of Mortgage Loan Documents.
(a) The Seller shall deliver or cause to be delivered to the
Bailee, prior to the Closing Date (or on such other date as may be agreed to by
the Parties in writing), each of the following items or documents with respect
to each related Mortgage Loan pursuant to the Escrow and Bailee Agreement:
(i) the original Mortgage Note, endorsed "Pay to the order of
_____________________, without recourse," and signed in the name
of Seller by an authorized officer, with all intervening
endorsements showing a complete, valid and proper chain of title
from the originator of such Mortgage Loan to the Seller.
Notwithstanding the foregoing, it is agreed by the Parties that
lost note affidavits may be delivered in lieu of Mortgage Notes
for the Mortgage Loans identified in Exhibit 9. In the event that
the Mortgage Loan was acquired by the Seller in a merger, the
endorsement must be by "[NAME OF SELLER], successor by merger to
[name of predecessor]"; and in the event that the Mortgage Loan
was acquired or originated by the Seller while doing business
under another name, the endorsement must be by "[NAME OF SELLER],
formerly known as [previous name]";
(ii) the original Mortgage, with evidence of recording
thereon;
(iii) an original Assignment of Mortgage, from the Seller
assigned in blank, which assignment shall be in form and
substance acceptable for recording (except for the insertion of
the name of the assignee) and in compliance with all applicable
federal and state laws, rules, regulations and ordinances. In the
event that the Mortgage Loan was acquired by the Seller in a
merger, the Assignment of Mortgage must be by "[NAME OF SELLER],
successor by merger to name of predecessor]"; and in the event
that the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of
Mortgage must be by "[NAME OF SELLER], formerly known as
[previous name]";
(iv) the original policy of title insurance and all
applicable endorsements thereto;
(v) originals of all intervening Assignments of Mortgage,
with evidence of recording thereon, showing a complete chain of
title from the originator to the Seller;
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(vi) originals of all assumption and/or modification
agreements, if any;
(vii) original UCC assignment, if a UCC-1 financing statement
was filed in connection with a Mortgage Loan, showing the
Purchaser as the new secured party;
(viii) original assignment of leases and rents (if separate
from the Mortgage), and an original Assignment of Assignment of
Leases and Rents (if separate from the Mortgage), from the Seller
assigned in blank, which assignment shall be in form and
substance acceptable for recording (except for the insertion of
the name of the assignee) and in compliance with all applicable
federal and state laws, rules, regulations and ordinances. In the
event that the Assignment of Leases and Rents Loan was acquired
by the Seller in a merger, the Assignment of Assignment of Leases
and Rents must be by "[NAME OF SELLER], successor by merger to
[name of predecessor]"; and in the event that the Assignment of
Leases and Rents was acquired or originated by the Seller while
doing business under another name, the Assignment of Assignment
of Leases and Rents must be by "[NAME OF SELLER], formerly known
as [previous name]":
(ix) original security agreement (if separate from the
Mortgage);
(x) original guaranties, if any;
(xi) original environmental liability agreement, if any;
(xii) original non-recourse agreement, if any; and
(xiii) original collateral assignment, if any, of property
management agreements, and any other documents or instruments, if
any, evidencing or securing the Mortgage Loan.
Notwithstanding the foregoing, the following shall apply with respect to each
New Mortgage Loan: (A) if the original Mortgage has been delivered for recording
to the appropriate public recording office of the jurisdiction in which the
Mortgaged Property is located and such original Mortgage has not yet been
returned to the Seller by such recording office as of the Closing Date, the
Seller may tender to the Purchaser a certified true, correct and complete copy
of such original Mortgage; and (B) if the original policy of title insurance
insuring such New Mortgage Loan has not yet been received by the Seller as of
the Closing Date, the Seller may tender to the Purchaser a true, correct and
complete copy of a pro forma policy, preliminary title report, title insurance
binder or marked-up commitment for the issuance of such policy and an insured
closing statement, in each case adequately defining the terms and conditions of
the title policy which the
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applicable title insurer has committed to issue with respect to such Mortgage;
provided, however, that the Seller shall obtain and cause to be delivered to the
Purchaser the originals of such Mortgage and policy of title insurance with
respect to each such New Mortgage Loan not later than the Transfer Date therefor
under the Interim Servicing Agreement. Further, notwithstanding the foregoing,
with respect to each SBO the Seller shall deliver or cause to be delivered to
the Purchaser, not later than the SBO Closing Date, the original Participation
Agreement, each Certificate of Participation, any intervening assignments of the
participation interest (if applicable), and all other original documentation
evidencing the interest of the Seller in the underlying Mortgage Loans covered
by such SBO, together with all SBO Servicing Files; provided, however, that, to
the extent the Seller cannot deliver the foregoing original documents, then the
following shall apply: (1) the Purchaser shall accept a fully executed copy of
the governing Participation Agreement; and (2) in lieu of original Certificates
of Participation, intervening assignments (if any) and other original
documentation as aforesaid, the Purchaser shall accept the written consent and
acknowledgment of the originator/servicer of the SBO confirming the
participation interest held by the Seller, the underlying Mortgage Loans and
other similar items clearly defining the SBO asset being purchased by the
Purchaser, with such consent and acknowledgment to be in a form jointly approved
by the Seller and the Purchaser.
(b) The Seller shall cause the Bailee to certify to the Seller
and the Purchaser, in the manner specified in the Escrow and Bailee Agreement,
Bailee's receipt of certain Mortgage Loan Documents on or prior to the Closing
Date, attaching a list of any missing document or other deficiencies. The Seller
shall cure all such deficiencies in the manner referred to in Section 4.02(a)
above.
(c) If any Assignment of Mortgage is at any time returned
unrecorded because of any defect therein, the Seller shall cause such defect to
be cured and such Assignment of Mortgage to be recorded promptly following
written request by the Purchaser. Without limiting the foregoing, the Seller
shall execute and deliver, at closing, a power-of-attorney in favor of the
Purchaser in the form attached hereto as Exhibit 18, pursuant to which the
Purchaser shall be authorized to supplement or modify any such Assignment of
Mortgage, or execute a replacement thereof in appropriate form, in any manner to
the extent necessary to permit such recordation in any applicable jurisdiction.
ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE SELLER; REMEDIES FOR BREACH.
Section 6.01 Representations and Warranties Regarding the Seller.
The Seller represents and warrants to the Purchaser that, as of the date hereof
and as of the Closing Date:
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(a) Due Organization and Authority. The Seller is duly organized
and validly existing as a national bank under the laws of the United States and
has all licenses necessary to carry on its business as now being conducted; the
Seller is in compliance with the laws of each relevant jurisdiction or
governmental authority to the extent necessary to ensure the enforceability of
the transfer of the Mortgage Loans in accordance with the terms of this
Agreement and the enforceability of the Mortgage Loans in accordance with the
Mortgage Loan Documents; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all agreements and
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby (including
without limitation the repurchase obligations hereinafter set forth) have been
duly and validly authorized; this Agreement and all agreements and instruments
of transfer contemplated hereby have been duly executed and delivered and
constitute the valid, legal, binding and enforceable obligations of the Seller,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law; and
all requisite corporate action has been taken by the Seller to make this
Agreement and all agreements and instruments contemplated hereby valid and
binding upon the Seller in accordance with their terms.
(b) No Conflicts. Neither the sale of the Mortgage Loans to the
Purchaser, nor the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
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 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 result in
the creation or imposition of any lien, charge or encumbrance that would have a
material adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument, or impair the ability of
the Purchaser to realize on the Mortgage Loans, impair the value of the Mortgage
Loans, or impair the ability of the Purchaser to realize the full mortgage
insurance benefits applicable thereto.
(c) Ability to Perform; Solvency. 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 will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of the Seller's creditors.
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(d) No Litigation Pending. There is no action, suit, proceeding
or investigation pending or, to the best of Seller's knowledge, threatened
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 or the Mortgage Loans or
of any action taken or to be taken in connection with the obligations of the
Seller contemplated herein, or that would be likely to impair materially the
ability of the Seller to perform under the terms of this Agreement. (As used in
this Section 6.01 and in Section 6.02 below, the phrase "best of Seller's
knowledge" shall be understood to mean knowledge actually possessed by the
Seller or which a reasonably prudent lender should possess.)
(e) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, 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 or the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been obtained
prior to the Closing Date. In addition, no consent or approval is required from
any non-governmental person or agency in connection with matters referred to in
the preceding sentence, unless such consent or approval has been obtained prior
to the Closing Date (with evidence thereof being delivered to the Purchaser as
contemplated in Section 9.01(j) below) or, if the same is to be obtained
following the Closing Date, such consent or approval is listed on Exhibit 16
hereto, and the Seller shall obtain same in a timely manner in accordance with
Section 4.02(a) above.
(f) Sale Treatment. The Seller has been advised by its
independent certified public accountants that under generally accepted
accounting principles the transfer and assignment of the Mortgage Loans may be
treated as a sale on the books and records of the Seller, and the Seller has
determined that the disposition of the Mortgage Loans pursuant to this Agreement
will be afforded sale treatment for accounting and tax purposes.
(g) Reasonable Purchase Price. 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.
(h) Insured Depository Institution Representations. The Seller is
an insured depository institution, and accordingly, the Seller makes the
following additional representations and warranties:
(1) This Agreement conforms to all statutory and regulatory
requirements applicable to the Seller. This Agreement is (a)
executed
17
contemporaneously with the agreement reached by the Seller and
the Purchaser, (b) approved by a specific corporate or banking
association resolution by the board of directors of the Seller,
which approval shall be reflected in the minutes of said board,
and (c) continuously, from the time of its execution, an official
record of the Seller;
(2) This Agreement has been duly and validly authorized by a
specific corporate or banking association resolution by the board
of directors of the Seller. A copy of such resolution, certified
by the corporate secretary of the Seller or attested to by a vice
president or higher officer of the Seller has been provided to
the Purchaser; and
(3) The Seller will maintain a copy of this Agreement in its
official books and records and shall make same available for the
Purchaser's inspection and copying on one Business Day's notice.
Section 6.02 Representations, Warranties and Covenants Regarding
Individual Mortgage Loans. The Seller hereby represents, warrants and covenants
to the Purchaser that, as to each Mortgage Loan, as of the Closing Date:
(a) Accuracy of Information. The description of and the
information with respect to the Mortgage Loan set forth in the Mortgage Loan
Schedule and the Data Files are true, complete, and accurate in all material
respects; provided, however, that the Purchaser acknowledges that the following
items were calculated or derived by the Seller from sources believed by it to be
accurate or from analysis prepared solely for the Seller's own use, as to which
items the Seller represents only that they are accurately set forth on the
Mortgage Loan Schedule: total monthly rent, NOI and DSCR.
(b) Full Disbursement; Pledged Loan Proceeds. The principal
amount of the Mortgage Loan stated in the related Mortgage Note has been fully
disbursed, and there is no requirement under any of the related Mortgage Loan
Documents for, and the Seller shall not make, any future advances thereunder.
Any further advances made prior to the Cut-off Date have been consolidated with
the principal balance secured by the Mortgage, and such principal balance, as
consolidated, bears a single interest rate and single repayment term reflected
on the Mortgage Loan Schedule. Except with respect to the Mortgage Loans listed
on Exhibit 17, the proceeds of each Mortgage Loan have been fully disbursed to
Mortgagor; for each Mortgage Loan listed on Exhibit 17, the Mortgagor has
pledged to (and the Seller has a perfected security interest in) a portion of
the proceeds of such Mortgage Loan in the amount shown on Exhibit 17, and such
pledged funds are non-interest bearing and subject to disbursement or other
application in accordance with the applicable Mortgage Loan Documents.
(c) Term; Monthly Installments; Amortization. Except as otherwise
shown in the Mortgage Loan Schedule, the Mortgage Loan (i) has an original term
to
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maturity not exceeding 30 years, and (ii) provides for Monthly Payments payable
on the first day of each month. The principal amount of the Mortgage Loan has
begun to amortize or will begin to amortize no later than the first day of the
month immediately following the Cut-off Date (provided that certain Mortgage
Loans may negatively amortize from time to time in accordance with their terms).
(d) Interest Rate. If the Mortgage Loan is an adjustable rate
Mortgage Loan (i) all of the terms set forth in the Mortgage Loan Documents
pertaining to interest rate adjustments, payment adjustments, and adjustments of
the unpaid principal balance are enforceable, in accordance with their terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general principals of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law; (ii)
all such adjustments have been timely and correctly made in accordance with the
terms of the related Mortgage Note and applicable law, and the related Mortgagor
timely and appropriately advised; (iii) such adjustments will not affect the
lien priority of the Mortgage; (iv) on each Interest Rate Adjustment Date
occurring after the Closing Date, the Mortgage Interest Rate is subject to
adjustment to a new Mortgage Interest Rate equal to the then current Index plus
the Gross Margin (rounded as provided in the related Mortgage Note), as
specified on the Mortgage Loan Schedule, subject to the Maximum Mortgage
Interest Rate, the Minimum Mortgage Interest Rate, the Interest Rate Increase
Maximum and the Interest Rate Decrease Maximum specified on the Mortgage Loan
Schedule; and (v) on each Interest Rate Adjustment Date occurring after the
Closing Date, the Monthly Payment is subject to adjustment, subject to the
Maximum Monthly Payment Adjustment or permitted negative amortization as
specified on the Mortgage Loan Schedule. On the Closing Date and until the next
Interest Rate Adjustment Date, in the absence of a default, the Mortgage
Interest Rate is and shall be as set forth on the Mortgage Loan Schedule.
(e) Interest Accrual. Interest at the rate or rates provided for
by the Mortgage Note will accrue continuously, calculated on the full disbursed
amount of the Mortgage Loan (and on any accumulated deferred interest, if any,
but not on any principal repaid), and will be payable, either in advance for the
period from the date on which funds were disbursed to one month before the first
monthly payment date or (except insofar as interest is treated as deferred
interest under the applicable Mortgage Note) in arrears, in scheduled
installments that each provide for one month's interest accrual. Except as shown
on the Mortgage Loan Schedule, the accrual of interest under the Mortgage Note
(and the calculation of such interest) is based on a 360-day year consisting of
twelve 30-day months, except during the month of origination (unless the date of
such origination was the first of such month) and the month in which such
maturity date falls (unless such maturity date was the first of such month), in
which case, for each such month, interest shall accrue for each day that the
Mortgage Loan remains outstanding, on the basis of an actual 365/366-day year.
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(f) Payment History; No Defaults. Except as shown on Exhibit 19:
(i) all Monthly Payments and Escrow Payments due under the Mortgage and Mortgage
Note as of the Cut-off Date have been made; (ii) no Monthly Payment required to
be made under the related Mortgage and Mortgage Note has been paid more than 30
days after its due date (excluding any applicable grace period) more than once
during the twelve-month period preceding the Cut-off Date; (iii) no Monthly
Payment required to be made under the related Mortgage and Mortgage Note has
been paid more than 60 days after its due date (excluding any applicable grace
period) during the 12-month period preceding the Cut-off Date; (iv) during the
12 months preceding the Cut-off Date, the Seller has not advanced a tax,
insurance premium or leasehold payment with respect to a Mortgaged Property due
to the failure of the related Mortgagor to make such payment in a timely manner;
(v) to the best of the Seller's knowledge, there is no, and during the 12 months
preceding the Cut-off Date there has been no, material default, breach or
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 such a material
default, breach or violation, or event of acceleration, and neither the Seller,
nor to the best of the Seller's knowledge, any mortgagee or servicer under any
SBO, has waived any such default, breach, violation, or event of acceleration;
(vi) except as shown on Exhibit 12 hereto, all taxes, and other governmental
assessments (including assessments payable in future installments) if and to the
extent shown on the periodic tax ▇▇▇▇ for the Mortgaged Property issued by the
county or municipal tax collector, currently due and owing in respect of or
affecting the related Mortgaged Property have been paid, or Escrow Payments have
been collected from the Mortgagor, and remain available in the applicable
Custodial Fund in the respective amounts shown on Exhibit 26 hereto, 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; (vii) except as shown on Exhibit
14 hereto, all insurance premiums required to be paid by each Mortgagor
currently due and owing in respect of or affecting the related Mortgaged
Property have been paid, or Escrow Payments have been collected from the
Mortgagor, and remain available in the applicable Custodial Fund in the
respective amounts shown on Exhibit 26 hereto, in an amount sufficient to pay
for every such item which remains unpaid; (viii) to the best of Seller's
knowledge, all municipal charges, water and sewer assessments, condominium
charges, leasehold payments, or ground rents that previously became due and
owing in respect of or affecting the related Mortgaged Property have been paid,
or Escrow Payments have been collected from the Mortgagor, and remain available
in the applicable Custodial Fund, 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; and (ix) the Seller has not accelerated the Mortgage Loan during the 12
months preceding the Cut-off Date.
Except as set forth on Exhibit 4, the Seller has not advanced
funds, or induced, solicited, or knowingly received any advance of funds by a
party other than the
20
Mortgagor, directly or indirectly, for the payment of any amount required by the
Mortgage or the Mortgage Note.
Pursuant to the terms of the Mortgage Loan Documents, no person
or party other than the holder of the Mortgage Note may declare an event of
default or accelerate the related indebtedness under such Mortgage Loan
Documents.
(g) No Equity Kickers. The Mortgage does not include any "equity
participation" or similar provisions or "equity kicker" or similar provisions.
(h) Appraisal. The Servicing File contains an Appraisal of the
related Mortgaged Property, which Appraisal was made in connection with the
origination of the Mortgage and was signed prior to the approval of the
application for such Mortgage Loan by a qualified appraiser certified under the
laws of the jurisdiction in which the Mortgaged Property is located and conforms
to regulations of the Federal Home Loan Bank Board, the Office of Thrift
Supervision, the OCC, or other applicable governmental regulator for the
Mortgage Loan, which regulations were applicable at the time the Mortgage was
originated, and who met the requirements of the Seller's appraisal policies and
procedures, who had no interest, direct or indirect, in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation was not
affected by the approval or disapproval of such application. To the best of
Seller's knowledge, all of the improvements that were included for the purpose
of determining the appraised value of the Mortgaged Property were completed at
the time that such Mortgage Loan was originated and lie wholly within the
boundaries and building restriction lines of such Mortgaged Property. Except for
de minimis encroachments permitted by the prudent lenders which do not (1)
extend more than one foot over the property line, (2) touch any improvements on
the Mortgaged Property, or (3) interfere with the use of any improvements on the
Mortgaged Property or with the use of the balance of the property not covered by
any improvements, to the best of Seller's knowledge, no improvements on
adjoining properties encroach upon the Mortgaged Property. No improvement
located on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation.
(i) Lien Priority. Except with respect to Mortgage Loans set
forth on Exhibit 20, the Mortgage is a first and paramount lien on the related
Mortgaged Property, including all buildings, fixtures, installations and
improvements to the Mortgaged Property, and all leases, rents, and profits
related thereto. To the best of Seller's knowledge, such Mortgaged Property is
free and clear of any mechanics and materialmen's liens or other liens in the
nature thereof. To the best of Seller's knowledge, no rights are outstanding
that under applicable law could give rise to any such mechanics' or
materialmen's or similar liens that would be prior to, or equal with, the lien
of the Mortgage.
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(j) Cross-Collateralization and Cross-Default. Except with
respect to Mortgage Loans set forth on Exhibit 21, the Mortgage Loan is not
cross-collateralized or cross-defaulted to any other mortgage loan, except to
another Mortgage Loan that is subject to sale hereunder.
(k) Security Interest in Personal Property. Except with respect
to Mortgage Loans set forth on Exhibit 20, the Mortgage Loan Documents create
and the Seller has, and upon transfer of the Mortgage Loan Documents to the
Purchaser and the recordation of the Assignments of Mortgage, the Purchaser will
have, a first lien priority perfected security interest in all furniture,
fixtures, and equipment subject to the lien of the Mortgage and related to the
operation of the Mortgaged Property as a multifamily dwelling or commercial
property and condemnation and casualty proceeds relating to the Mortgaged
Property, subject only, if applicable, to a third party's interest in leased
items of personalty.
(l) Interest in Property. Except with respect to Mortgage Loans
set forth on Exhibit 20, each Mortgage encumbers a fee simple interest in the
Mortgaged Property.
(m) Title Insurance. The Mortgage Loan is covered by an ALTA
Lender's title insurance policy (with an adjustable rate mortgage loan
endorsement, if applicable, and, if the Mortgage Note provides for negative
amortization, either with a negative amortization endorsement or in an amount
equal to the negative amortization cap amount set forth in the related Mortgage
Note), issued by and the valid and binding obligation of a title insurer
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, and its successors and assigns, as to the first
priority lien (except with respect to Mortgage Loans set forth on Exhibit 20) of
the Mortgage on the related Mortgaged Property in the original principal amount
of such Mortgage Loan (plus, if applicable as stated above, an amount equal to
the negative amortization cap amount, if any, set forth in the related Mortgage
Note). The exceptions set forth in the title policy are limited solely to
covenants, conditions, restrictions, rights-of-way, easements, and other matters
of public records as of the date of recording of the Mortgage that customarily
are acceptable to lending institutions generally and that do not, individually
or in the aggregate, materially interfere with the benefits of the security
intended to be provided by the Mortgage or materially affect the value or
marketability of such Mortgaged Property. If the Mortgaged Property secured by
the Mortgage is subject to a ground lease, then the title insurance policy is an
ALTA ground lease policy or contains a CLTA Endorsement 107.5. No claims have
been made under such title insurance policy. Such title insurance policy is in
full force and effect and will inure to the benefit of the Purchaser, as
successor mortgagee, by operation of title policy without any action required to
be taken by any Person.
(n) Property Insurance. The Mortgaged Property related to the
Mortgage Loan was insured at its origination with property insurance policies;
provided,
22
however, that earthquake coverage was not required. As of the applicable Cut-off
Date, all improvements upon the Mortgaged Property are insured against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located. If the Mortgaged Property is
located in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), such Mortgaged Property is covered by flood insurance
meeting the requirements of the current guidelines of the Federal Insurance
Administration. To the best of the Seller's knowledge, each individual insurance
policy has been validly issued. Each such policy is in full force and effect.
The Seller has caused or will cause to be performed any and all acts required to
preserve the rights and interests of the Purchaser in all insurance policies
required by this Agreement, including, without limitation, notification of
insurers, and assignment of policies or interests therein. Each individual
insurance policy contains a standard mortgagee clause naming the Seller, and its
successors and assigns, as mortgagee and loss payee. All premiums thereon have
been paid. The Mortgage obligates the Mortgagor to maintain all such insurance
at the Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage Note and the beneficiary of the Mortgage
to obtain and maintain such insurance at the Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor, and the Seller has not acted or
failed to act so as to impair the coverage of any such insurance policy or the
validity, binding effect and enforceability thereof.
(o) No Side Agreements. All terms governing the Mortgage Loans
are in writing and are set forth in the Mortgage Loan Documents, and all such
Mortgage Loan Documents will be or have been delivered to the Purchaser in
connection with such purchase.
(p) Enforceability of Loan Documents; Compliance. The Mortgage
Loan Documents contain an absolute, unconditional, and enforceable assignment of
leases, rents, and profits. Each of the Mortgage Loan Documents is genuine, and
each is the legal, valid, and binding obligation of the maker thereof and each
party assuming liability therefor, enforceable in accordance with its respective
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law. All
parties to the Mortgage Loan Documents had legal capacity to execute the
Mortgage Loan Documents and convey the estate therein purported to be conveyed,
and each of the Mortgage Loan Documents has been duly and properly executed by
such parties or pursuant to a valid power of attorney that has been recorded
with the Mortgage. There is no valid offset, defense, counterclaim, or right of
rescission with respect to the Mortgage Loan Documents. As of the date of
origination, the Mortgage Loan complied with, or was exempt from, applicable
state and federal laws, regulations, and requirements relating to usury. Any and
all requirements of any federal,
23
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 such Mortgage Loan have been
complied with, and the Seller shall maintain, in its possession, available for
the Purchaser's inspection, or shall deliver to the Purchaser or its designee,
any evidence of compliance with such requirements the Seller may have that is
not being delivered to the Purchaser as part of the Mortgage Loan Documents or
the Servicing Files. The consummation of the transactions contemplated by this
Agreement will not cause the violation of any such laws.
(q) Benefits of Loan Documents. The Mortgage contains customary
provisions enforceable in accordance with their terms (except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the enforcement of creditors' rights generally
and by general principals of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law) that, upon assignment to the
Purchaser pursuant to this Agreement, will render the rights and remedies of the
Purchaser thereof adequate for the realization against the Mortgaged Property of
the benefits of the security, including (i) in the case of a Mortgage designated
as a deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. To the best of Seller's knowledge, there is no homestead, dower,
curtesy, or other exemption or right available to the Mortgagor or any other
person which would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage. The Mortgage contains
customary and enforceable provisions for the acceleration of the payment of the
unpaid principal balance of such Mortgage Loan in the event all or any part of
the related Mortgaged Property is sold or otherwise transferred without the
prior consent of the mortgagee thereunder. If the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor.
(r) No Waivers or Releases. The terms of the Mortgage and the
Mortgage Note have not been impaired, waived, altered, or modified in any
respect, except by a written instrument which has been recorded, if necessary,
to protect the interest of the Purchaser and each of which is a part of the
Mortgage Loan Documents and which has been delivered to the Purchaser or was
included in the Mortgage Loan Document files made available to the Purchaser
during its diligence prior to the date of this Agreement. The substance of any
such alteration or modification is reflected on the Mortgage Loan Schedule, if
such information is required thereby, and, to the extent necessary, has been
approved by the insurer under the applicable mortgage title insurance policy. No
instrument of release, waiver, alteration, or modification has been executed in
connection with such Mortgage Loan, and no Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement which has been
approved by the Mortgage insurer, if any, and which is part of the Mortgage Loan
Documents and has
24
been or will be delivered to the Purchaser in accordance with the terms of this
Agreement, and the terms of which are reflected in the Mortgage Loan Schedule,
if such information is required thereby.
(s) No Shortening or Extension of Term. The Seller has no right
or obligation under the Mortgage Loan Documents to shorten (except as allowed in
the related Mortgage Note or in the event of a Mortgagor default) or extend the
original term of the Mortgage Loan. The Mortgage Loan is not due and payable on
demand or on a date certain that is earlier than the stated maturity date
(except as allowed in the related Mortgage or Mortgage Note or in the event of a
Mortgagor default).
(t) Notice to Insurer. Except as set forth on Exhibit 10 hereto,
the transfer of the Mortgage Loans by the Seller to the Purchaser does not
require notice to, or consent from, any Insurer thereunder.
(u) Senior Liens; Ground Leases. With respect to each Mortgage
Loan shown on Exhibit 20, (i) the Seller shall deliver to the Purchaser, as a
part of the applicable Servicing File, true, correct and complete copies of the
senior loan documents or ground lease, as applicable, to the extent in the
possession of the Seller, and (ii) to the best of Seller's knowledge, there is
no, and during the 12 months preceding the Cut-off Date there has been no,
material default, breach or violation, or event of acceleration or termination
under any such senior loan or ground lease, as applicable.
(v) Mortgagor Eligibility. The Mortgagor is one or more
individuals, a limited or general partnership, a corporation, a trust, or a
limited liability company (or a co-tenancy of such individual entities). The
Seller has no knowledge of any proceedings that would, in its opinion, adversely
affect the ability of the Mortgagor to meet its obligations under the Mortgage
Loan Documents.
(w) Mortgagor Bankruptcy. Except as provided on Exhibit 11
attached hereto, to the best of the Seller's knowledge, no Mortgagor or any
guarantors of the Mortgage are the subject of any bankruptcy, reorganization,
insolvency, or comparable proceeding.
(x) Good Repair. To the best of the Seller's knowledge, the
Mortgaged Property is free of material damage or waste and is in good repair.
(y) No Condemnation. To the best of Seller's knowledge, there is
no proceeding pending or threatened, for the partial or total condemnation of
the Mortgaged Property securing the Mortgage Loan, no notice of any such pending
or threatened proceeding has been received by the Seller, and no such proceeding
is currently occurring. No part of the Mortgaged Property has been taken by
eminent domain.
25
(z) Parcels. Each Mortgaged Property consists of either (i) a
single parcel of real property, or (ii) two or more parcels of real property
that are contiguous or are separated only by streets that are not major
arteries, upon which is erected a multi-family dwelling or building(s) used for
commercial purposes.
(aa) Leasehold Estates. Except with respect to Mortgage Loans set
forth on Exhibit 20, no Mortgage Loan is secured by a leasehold estate.
(bb) Public Services; Access; Utilities. To the best of Seller's
knowledge, the Mortgaged Property related to the Mortgage Loan (i) is located on
a dedicated, all-weather road, or is accessible from such a road by means of
access subject to a satisfactory easement, (ii) is serviced by public water and
sewer systems and by adequate public utilities, (iii) is equipped (i.e.,
electrical wiring, plumbing, etc.) to provide the accepted level of utility
service for the market area, and (iv) has access to community services,
generally including police and fire protection, public transportation (if
available to the community as a whole), refuse removal, and public education.
(cc) No Materially Adverse Consequences from Utilities. To the
best of Seller's knowledge, no public or private utility easements affecting the
Mortgaged Property, including easements for utilities such as transcontinental
pipelines, high power electric transmission lines, or drainage channels, will
have a material adverse effect on the value or marketability of the Mortgaged
Property.
(dd) Mortgaged Property's Compliance with Applicable Laws. To the
best of Seller's knowledge, all improvements on the Mortgaged Property and the
use of the Mortgaged Property comply in all material respects with all
applicable federal, state and local statutes, rules, and regulations, including,
but not limited to, all applicable statutes, rules, and regulations pertaining
to requirements for equal opportunity, fair housing, disability accommodation,
zoning, and land use, and all applicable health, fire, and building codes, and
all bond related regulatory agreements, deed restrictions, other bond related or
tax credit related restrictive covenants, and any other applicable restrictive
covenants, except to the extent that such non-compliance with any of the
foregoing will not have a material adverse effect on the value or marketability
of the Mortgaged Property, and including, but not limited to, current tenant
parking requirements.
(ee) Walkups. If the Mortgaged Property is improved by a building
that contains more than three stories, it has an elevator.
(ff) No Construction or Rehabilitation. The Mortgaged Property is
not in construction or, to the best of Seller's knowledge, in substantial
rehabilitation.
(gg) Cooperatives. No Mortgaged Property is owned by a
cooperative corporation or association.
26
(hh) Environmental Hazards. The Seller represents and warrants to
Purchaser, such representations and warranties to be true and correct as of the
date of origination of such Mortgage Loan and, to the best of Seller's
knowledge, as of the Closing Date:
(1) the Mortgaged Property was not and is not in material
violation of any federal, state, or local law, statute,
ordinance, rule or regulation, decree, order, and/or permit,
relating to the environmental conditions on, under, or about such
Mortgaged Property, including, but not limited to, soil and
surface and ground water conditions.
(2) Except for lead-based paint, asbestos and radon gases,
there had been and has been no disposal or release of any
flammable explosives, petroleum, petroleum byproducts,
radioactive materials, hazardous substances or wastes, or related
materials, including, without limitation, polychlorinated
biphenyls (PCBs), on, from, or under the Mortgaged Property. For
purposes of this Section, the terms "disposal," "release,"
"hazardous substances," and "hazardous wastes" shall mean and
include, without limitation, any hazardous, toxic, or dangerous
waste, substance, material, or any disposal, discharge, or
release, or any of the foregoing as defined in (or for purposes
of) the federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, and/or any
other federal, state, or local law, statute, ordinance, code,
rule, regulation, order, decree, and/or permit regulating,
relating to, or imposing liability or standards of conduct
concerning any hazardous, toxic, or dangerous waste, substance,
or material.
(3) With respect to lead-based paint, asbestos and radon
gases, there was no and is no lead-based paint, asbestos or radon
gases on the Mortgaged Property in such form and/or amount as to
constitute a violation of any federal, state, or local statute,
law, ordinance, code, rule, regulation, order, or decree.
(4) The Mortgagor was not and is not manufacturing,
generating, or storing hazardous substances or wastes or chemical
substances on the Mortgaged Property nor permitting the
manufacture, generation, or storage of such substances on the
Mortgaged Property, except for de minimis amounts necessary for
the proper operation of the Mortgaged Property and not
constituting a violation of any federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree.
(5) There were no and are no actions, suits, proceedings,
orders, inquiries, or investigations pending or threatened
against, involving, or affecting the Mortgaged Property, at law
or in equity, or before, or by any
▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic
or foreign, alleging the violation of any federal, state, or
local law, statute, ordinance, rule, regulation, decree, order,
and/or permit relating to Environmental Matters ("Environmental
Matters" shall include, without limitation, matters relating to
the generation, manufacture, use, storage, handling,
transportation, and/or disposal of hazardous substances or
wastes, chemical substances, or conditions with respect to the
atmosphere, soil, surface and ground waters, wetlands, stream
sediments, and vegetation).
(6) The Seller had not and has not received any claim,
notice, or opinion that the ownership or operation of the
Mortgaged Property violates any federal, state, or local law,
statute, ordinance, rule, regulation, decree, order, and/or
permit relating to Environmental Matters, and no valid basis for
any proceeding, action, or claim of such nature exists;
provided, however, that a breach of any representation and warranty set forth in
subparagraphs (1) through (6) above being given as of the date of origination
shall not constitute a breach of this subsection 6.02(hh) for purposes of
Section 6.03 or any other provisions hereof unless such breach could reasonably
be expected to have been detected by a modified "Phase I" report if such a
report had been obtained at the time of origination of such Mortgage Loan,
unless the Seller acquired actual knowledge of the matter subsequent to the
origination of such Mortgage Loan and such information was not disclosed to the
Purchaser pursuant to this Agreement. A modified Phase I report means an
environmental report that is more thorough than a transaction screen but less
thorough than a standard Phase I report.
(ii) Location. The Mortgaged Property is located as set forth on
the Mortgage Loan Schedule.
(jj) Composition of Multifamily Property. Except with respect to
Mortgage Loans set forth on Exhibit 22, each Mortgaged Property classified as
"multifamily" on the Mortgage Loan Schedule is improved by a multifamily
residential structure composed of at least five dwelling units, and no more than
20 percent of the net rentable space of such Mortgaged Property is used for
non-residential purposes.
(kk) Whole Loans; Ownership. Except with respect to Mortgage
Loans set forth on Exhibits 13 and 14, each Mortgage Loan is a whole loan and
not a participation interest in a Mortgage Loan. Immediately prior to the
transfer thereof to the Purchaser pursuant to this Agreement, the Seller will
have good and marketable title thereto, and the Seller will be the sole owner
and holder of each Mortgage Loan free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges, or security
interests of any nature (other than the lien of the Federal Home Loan Bank of
San Francisco being released not later than the Closing Date) and will have full
28
right and authority, subject to no interest or participation of, or agreement
with, any other party, to sell and assign each Mortgage Loan pursuant to this
Agreement. Upon the transfer thereof to the Purchaser pursuant to this
Agreement, the Seller will have taken all actions necessary on its part to be
taken so that the Purchaser will have good and marketable title to, and will be
sole owner of, the Mortgage Loan, the Mortgage and the Mortgage Note, free and
clear of any and all liens, claims, encumbrances, participation interests,
equities, pledges, charges, or security interests of any nature.
(ll) Escrow Payments. All escrow deposits and payments relating
to each Mortgage are in the possession or under the control of the Seller. All
such escrows and deposits will be conveyed by the Seller to the Purchaser
pursuant to this Agreement and identified as such with appropriate detail. There
exist no deficiencies in excess of $200 with respect to escrow deposits and
payments, if such are required, for which customary arrangements for repayment
have not been made or which the Seller expects not to be cured, and no escrow
deposits or payments of other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note.
(mm) Mortgagor Concentration. No more than 5 percent of the
aggregate outstanding principal amount of the Mortgage Loans have the same
Mortgagor or, to the Seller's best knowledge, are made to Mortgagors that are
Affiliates of each other.
(nn) Underwriting Guidelines. Except as set forth on Exhibit 23
hereto, each Mortgage Loan was underwritten in accordance with the underwriting
guidelines of the Seller in effect at the time such Mortgage Loan was
originated, true and correct copies of which have been delivered by the Seller
to the Purchaser.
(oo) No Fraudulent Statements. No statement, report, or other
document constituting a part of the Mortgage Loan Documents or the Servicing
File contains any fraudulent statements or omissions by the Seller or, to the
best of the Seller's knowledge, by the Mortgagor or any other person or entity.
(pp) Compliance. The origination, servicing and collection
practices, if any, used by the Seller with respect to such Mortgage Loan have
complied in all material respects with applicable requirements of federal, state
and local laws and have been consistent with those practices applied by the
Seller to similar types of mortgage loans-owned by the Seller.
(qq) Licensing. The Seller and any of its Affiliates that have
had any interest in the Mortgage, whether as mortgagee, assignee, pledgee, or
otherwise, are (or, during the period in which they held and disposed of such
interest, were) (i) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located
and (ii) (A) organized under the laws of such state, (B) qualified to do
business in such state, (C) federal savings and loan associations
29
or national banks having principal offices in such state, (D) not doing business
in such state, or (E) not required to qualify to do business in such state.
(rr) Custodial Agreements, etc. There are no custodial agreements
in effect adversely affecting the right or ability of the Seller to make the
deliveries of the Mortgage Loan Documents. Each of the Mortgage Loan Documents
with respect to such Mortgage Loan specified in Section 5.03 or in the Servicing
File is, to the best of the Seller's knowledge, genuine, true, correct and
complete and has not been altered or modified in any way except as noted in the
Servicing File and each is duly executed and in due and proper form. With
respect to each Servicing File, each of the items listed under Part One of
Exhibit 5 hereto is in each Servicing File, and each item listed under Part Two
of Exhibit 5 is, where applicable as to each Mortgage Loan, in the Servicing
File therefor.
(ss) Assignments. The transfer of the Mortgage Note and the
Mortgage as and in the manner contemplated by this Agreement will be sufficient
fully to transfer to the Purchaser all right, title and interest of the Seller
thereto as note holder and mortgagee or trust deed beneficiary. The Mortgage
will be duly assigned and the Mortgage Note will be duly endorsed as provided in
Section 5.03. The Assignment of Mortgage delivered pursuant to Section 5.03 is
in recordable form (except for the insertion of the name of the assignee) and is
acceptable for recording under the laws of the applicable jurisdiction.
(tt) Delivery to the Bailee. Prior to the Closing Date, the
Seller has, in accordance with Section 5.03, delivered to the Bailee originals
of each of the documents with respect to such Mortgage Loan specified in Section
5.03.
(uu) Classified Loans. Except as set forth on Exhibit 24, no
Mortgage Loan is a "criticized" or "special credit" asset.
(vv) Litigation; Casualty Losses. Except as shown on Exhibit 25
hereto, to the best of Seller's knowledge, there is (i) no litigation,
arbitration or other similar proceeding pending or threatened with respect to
any Mortgage Loan, (ii) no material unrepaired casualty loss with respect to any
Mortgaged Property, and (iii) no material unpaid insurance claim pending with
respect to any Mortgaged Property.
(ww) SBOs. With respect to each SBO, the Seller (i) has, in
accordance with Section 5.03 above, delivered to the Bailee true, correct and
complete originals of each Participation Agreement, Certificate of Participation
and other similar document evidencing the interest of the Seller in the
underlying Mortgage Loan(s), (ii) has included in the Servicing File for each
such Mortgage Loan copies of Mortgage Loan Documents, each report or notice
received from the servicer under the applicable Participation Agreement, and
other items referred to on Exhibit 5 hereto, but only to the extent to the
possession of the Seller, with respect to each such underlying Mortgage Loan,
(iii) has no
30
knowledge of any breach or default on the part of the servicer under such SBO or
any Mortgager under any underlying Mortgage Loan, and (iv) has executed and
delivered to the Purchaser an assignment sufficient fully to transfer to the
Purchaser all right, title and interest of the Seller in and to such SBO. The
information set forth on Exhibit 13 hereto is true and correct. With respect to
each SBO, the provisions of this subparagraph (xx) shall apply in lieu of other
representations and warranties set forth in this Section 6.02, except for the
following subparagraphs: (a), (b), (g) through (j), (l), (m), (w), (x), (y),
(dd), (ff), (ii), (jj), (nn), (oo), (uu) and (vv).
(xx) Custodial Accounts. Exhibit 26 hereto is a true and complete
listing of all Custodial Accounts, as well as each Mortgage Loan on which the
Seller is collecting Escrow Payments from the Mortgagor.
(yy) Automatic Debit. Exhibit 27 hereto is a true and complete
listing of all Mortgage Loans with respect to which an automatic debit, against
a deposit account held at the Seller or elsewhere, is in place with respect to
regular Monthly Payments thereunder.
Section 6.03 Remedies for Breach of Seller's Representations,
Warranties and Covenants. It is understood and agreed that the representations
and warranties set forth in Sections 6.01 and 6.02 shall survive the sale of the
Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
Loan Documents or Servicing File. Upon discovery by either the Seller or the
Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser in the Mortgage Loans, in the case of a representation
or warranty set forth in Section 6.01 (or which materially and adversely affects
the value of any Mortgage Loan or the interest of the Purchaser in any Mortgage
Loan, in the case of a representation and warranty set forth in Section 6.02),
the Party discovering such breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by (and written
notice to the Purchaser in accordance with the preceding paragraph) or written
notice to the Seller of any breach of a representation or warranty set forth in
Section 6.02, the Seller shall use its reasonable best efforts promptly to cure
such breach in all material respects and, if such breach cannot be or is not
cured within such 60-day period, and such breach meets the threshold standard
set forth in the preceding paragraph, the Seller shall, at the Purchaser's
option, which option must be exercised within 60 days following written notice
to the Purchaser of the Seller's inability to cure such breach or the expiration
of the 60-day cure period referred to above, repurchase such Mortgage Loan at
the Repurchase Price not later than 30 days following demand for repurchase from
the Purchaser. In the event that a breach shall involve any representation or
warranty set forth in Section 6.01, and such breach cannot be or is not cured
within 60 days of the earlier of either discovery
31
by (and written notice to the Purchaser in accordance with the preceding
paragraph) or written notice to the Seller of such breach, and such breach meets
the threshold standard set forth in the preceding paragraph, the Seller shall
repurchase, at the Repurchase Price, either, at the Seller's option, (1) all of
the Mortgage Loans, or (2) such of the Mortgage Loans selected by the Purchaser,
in its commercially reasonable discretion, so that, after such repurchase, such
breach is cured in all material respects. Such repurchase shall close not later
than 30 days following demand for repurchase from the Purchaser. In addition,
(a) if any Monthly Payment that becomes due during the period beginning on the
Closing Date and ending on the first anniversary of the Closing Date in respect
of any of the Mortgage Loans listed on Exhibit 12 becomes 60 days or more
delinquent, or (b) with respect to any New Mortgage Loan shown on Part One of
Exhibit 15 hereto, the Mortgagor thereunder defaults on the first Monthly
Payment or becomes 60 days or more delinquent on any Monthly Payment during the
period beginning on the Closing Date and ending on the first anniversary of the
Closing Date, or (c) with respect to any New Mortgage Loan shown on Part Two of
Exhibit 15 hereto, the Mortgagor thereunder defaults on the first Monthly
Payment, then, in each such circumstance, the Seller shall, at the election of
the Purchaser, repurchase (at the applicable Repurchase Price) the related
Mortgage Loan not later than 30 days following written demand for repurchase
from the Purchaser, which demand must be made within 60 days of the Purchaser
acquiring knowledge of such delinquency or default (with delinquency understood
to mean a failure to pay within the time period, including any cure period,
provided in the applicable Mortgage Loan Documents). Any repurchase of a
Mortgage Loan or Loans pursuant to the foregoing provisions of this Section 6.03
shall be accomplished by the Seller wiring immediately available funds into an
account designated by the Purchaser. The Seller shall pay all out-of-pocket
costs and expenses incurred in connection with the repurchase of any Mortgage
Loan.
At the time of repurchase, the Purchaser and the Seller shall
arrange for the reassignment of the Repurchased Mortgage Loan to the Seller
pursuant to documents consistent with those delivered by the Seller to the
Purchaser on the Closing Date and the delivery to the Seller of any documents
held by the Purchaser relating to the Repurchased Mortgage Loan. The Seller
shall on behalf of the Purchaser provide any required notice to any Mortgagor
with respect to any Repurchased Mortgage Loan.
In addition to such cure and repurchase obligations, the Seller
shall indemnify, defend and hold the Purchaser harmless from and against any
Loss resulting from any claim, demand, defense or assertion based on or founded
upon, or resulting from, a breach by the Seller of any of its representations,
warranties and covenants contained in this Agreement, the Interim Servicing
Agreement and any other writing delivered pursuant hereto; provided, however,
the Purchaser shall not be entitled to make a claim against the Seller under
this paragraph if the amount of such Loss is (or is projected to be) less than
$10,000 as to any single breach, unless the cumulative amount of all such Losses
under all breaches of any kind exceeds $100,000, in which event the
32
Seller shall be liable to the Purchaser for the full amount of all such Losses
without regard to such $10,000 or $100,000 limitation. It is understood and
agreed that the obligations of the Seller set forth in this Section 6.03 to cure
or repurchase a defective Mortgage Loan and to indemnify the Purchaser as
provided in this Section 6.03 constitute the sole remedies of the Purchaser
respecting a breach of the Seller's representations, warranties or covenants.
Any cause of action against the Seller relating to or arising out
of the breach of any representation and warranty made in Section 6.01 or 6.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or written notice thereof by the Seller to the Purchaser, (ii) failure
by the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, as applicable, and (iii) demand upon the Seller by the Purchaser for all
amounts payable in respect of such Mortgage Loan, as applicable.
Section 6.04 Survival of Representations, Warranties and
Covenants; Limitation Period.
(a) The representations, warranties and covenants of the Seller
contained in this Agreement or in any writing delivered pursuant to the
provisions of this Agreement shall survive the consummation of the transactions
contemplated hereby and any examination by or on behalf of the Purchaser and the
termination of this Agreement.
(b) The provisions of this Section 6.04(b) shall govern the time
period within which the Purchaser may make a claim for breach of a
representation or warranty by the Seller, whether in the nature of a demand for
repurchase of a Mortgage Loan or indemnification with respect to such breach;
the provisions of this subparagraph shall not limit the Purchaser's rights or
remedies with respect to a breach by the Seller of any covenant under this
Agreement or any related document. The time period for the assertion by the
Purchaser of any such claim for breach of a representation or warranty by the
Seller hereunder shall be limited to 12 months following the Closing Date. In
addition, with respect to a claim for indemnification, the Purchaser shall have
determined, within such 12-month period, that the breach of the Seller with
respect to which such indemnification claim is being asserted has a reasonable
possibility of resulting in a Loss to the Purchaser; each such claim for
indemnification shall be in writing to the Seller and shall include a reasonable
estimate by the Purchaser of the amount of such Loss, provided that such
estimate shall not constitute a contractual limit on the amount of actual Loss
under such indemnification claim, if larger. In response to any such claim for
indemnification, the Seller may, in its sole discretion, elect to repurchase (at
the applicable Repurchase Price and in the manner generally provided in Section
6.03 above) the related Mortgage Loan, in which case the Seller shall have no
further obligation to the Purchaser with respect to the indemnification claim
related thereto. If the Seller elects so to repurchase the related Mortgage
Loan, such repurchase shall close not later than 30 days following the date the
Purchaser made such
33
indemnification claim. The Seller covenants to maintain, in its reasonable
judgment, sufficient capital to satisfy all obligations to the Seller under this
Agreement, the Interim Servicing Agreement and each other writing delivered
pursuant hereto; any breach of the foregoing covenant shall render of no further
force and effect the limitations set forth in this subparagraph (b). In no event
shall the 12-month limitation period pursuant to this subparagraph (b) impair
any claim or repurchase obligation, whether or not resolved within such 12-month
period, discovered by the Seller or made by the Purchaser in writing to the
Seller, as provided in Section 6.03 or in this Section 6.04, prior to the end of
such period.
ARTICLE VIA.
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE PURCHASER.
Section 6.01A Representations and Warranties Regarding the
Purchaser. The Purchaser represents and warrants to the Seller that, as of the
date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Purchaser is duly
organized and validly existing as a federal association under the laws of the
United States and has all licenses necessary to carry on its business as now
being conducted; the Purchaser is in compliance with the laws of each relevant
jurisdiction or governmental authority to the extent necessary to conduct
business of the type conducted by the Purchaser; the Purchaser has the full
corporate power, authority and legal right to receive and hold the Mortgage
Loans and to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement (including
all agreements and instruments of transfer to be delivered pursuant to this
Agreement) by the Purchaser and the consummation of the transactions
contemplated hereby (including without limitation the purchase obligations
hereinafter set forth) have been duly and validly authorized; this Agreement and
all agreements and instruments contemplated hereby have been duly executed and
delivered and constitute the valid, legal, binding and enforceable obligations
of the Purchaser, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity
or at law; and all requisite corporate action has been taken by the Purchaser to
make this Agreement and all agreements and instruments contemplated hereby valid
and binding upon the Purchaser in accordance with their terms.
(b) No Conflicts. Neither the purchase of the Mortgage Loans by
the Purchaser, nor the consummation of the transactions contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Purchaser's charter or by-laws or any legal
restriction or any agreement or instrument to
34
which the Purchaser is now a party or by which it is bound, 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 Purchaser or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument.
(c) Ability to Perform; Solvency. The Purchaser 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 Purchaser is solvent and the
purchase of the Mortgage Loans will not cause the Purchaser to become insolvent.
The purchase of the Mortgage Loans is not undertaken with the intent to hinder,
delay or defraud any of the Purchaser's creditors.
(d) No Litigation Pending. There is no action, suit, proceeding
or investigation pending or, to the best of the Purchaser's knowledge,
threatened against the Purchaser 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 Purchaser, or in
any material impairment of the right or ability of the Purchaser to carry on its
business substantially as now conducted, or in any material liability on the
part of the Purchaser, or which would draw into question the validity of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Purchaser contemplated herein, or which would be likely to
impair materially the ability of the Purchaser to perform under the terms of
this Agreement.
(e) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, is required for the execution, delivery and
performance by the Purchaser of or compliance by the Purchaser with this
Agreement or the purchase of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the Closing Date.
Section 6.02A Survival of Representations, Warranties and
Covenants. The representations, warranties and covenants of the Purchaser
contained in this Agreement or in any writing delivered pursuant to the
provisions of this Agreement shall survive the consummation of the transactions
contemplated hereby and any examination by or on behalf of the Seller and the
termination of this Agreement; provided, however, that the representations and
warranties contained in this Article VIA shall survive only as long as the
survival period applicable to the Seller's representations and warranties
pursuant to Section 6.04(b) hereof.
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ARTICLE VII.
INTERIM SERVICING; TRANSFER OF SERVICING.
Section 7.01 Interim Servicing. On or before the Closing Date,
the Parties shall execute the Interim Servicing Agreement attached hereto as
Exhibit 7. The Interim Servicing Agreement shall set for the rights and
obligations of the parties regarding the servicing of the Mortgage Loans during
the Interim Period.
Section 7.02 Transfer of Servicing. The Seller shall transfer
servicing responsibility with respect to the Mortgage Loans to the Purchaser or
its designee in accordance with customary mortgage industry servicing practices
on the applicable Transfer Date. Seller shall deliver the Servicing File to
Purchaser on the applicable Transfer Date, or on such other date that the
Parties shall agree upon. The Seller and Purchaser agree to make a good faith
effort in order to execute and deliver such instruments and take such actions as
either Party may, from time to time, reasonably request in order to effectuate
the transfer of servicing. Nothing in this Section 7.02 shall alter or limit the
specific provisions of the Interim Servicing Agreement.
Section 7.03 Substitution of Trustee. In the case of any Mortgage
in the form of a deed of trust under which the trustee is the Seller or an
Affiliate of the Seller, the Purchaser shall, (a) prior to the initiation of
record of any foreclosure proceeding under such deed of trust, and (b) in all
events promptly following the service of any summons or other legal process
naming the Seller or Affiliate as a party in its capacity as such trustee,
substitute a replacement trustee thereunder for the Seller or Affiliate, as
applicable.
ARTICLE VIII.
CLOSING.
Section 8.01 Closing. The closing for the purchase of the
Mortgage Loans shall take place on the Closing Date. At the Purchaser's option,
the closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the Parties shall
agree.
Section 8.02 Conditions to the Purchaser's Closing Obligations.
The obligations of the Purchaser to consummate the transactions contemplated
hereunder at closing are subject to satisfaction or written waiver by the
Purchaser of the following conditions:
(a) in a timely manner on or before the Closing Date, the Seller
shall deliver to the Purchaser or the Bailee, as provided herein and in the
Escrow and Bailee Agreement, the Mortgage Loan Documents, the Mortgage Loan
Schedule, all Data Files, and a magnetic diskette, or transmit by modem, a
listing (in Microsoft Excel format) on a loan-level basis of the necessary
information to compute the Purchase Price of the
36
Mortgage Loans delivered on the Closing Date (including accrued interest);
additionally, on the Closing Date the Seller shall deliver or cause to be
delivered to the Purchaser an exported data tape in Microsoft Excel format (via
computer diskette, compact disc, e-mail or other form of electronic transmission
acceptable to both parties) containing all available data from each of the
Seller's servicing systems (and the Seller's third-party servicers' systems)
including, without limitation, FISERV and the SBO Access Database System;
(b) all of the representations and warranties of the Seller under
this Agreement shall be true and correct, if qualified as to materiality, or
otherwise true and correct in all material respects, 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;
(c) the Purchaser shall have received, or the Purchaser's
attorneys shall have received, in escrow, all closing documents as specified in
Section 9.01 of this Agreement to be delivered by the Seller and/or any person
or entity other than the Purchaser, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the terms hereof;
(d) The final form of all Exhibits hereto (as updated to the
Closing Date as appropriate) shall be in form and substance acceptable in all
respects to the Purchaser;
(e) the Seller shall not have received any notice or other
communication from a regulatory body with jurisdiction over the Seller
disapproving of the sale of the Mortgage Loans pursuant to this Agreement; and
(f) all other terms and conditions of the Seller with respect to
this Agreement and the related Purchase Price and Terms Letter shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Seller on
the Closing Date the Purchase Price (less Holdback), plus accrued interest,
pursuant to Article IV of this Agreement, by wire transfer of immediately
available funds to the account designated by the Seller, subject to the
provisions of the third paragraph of Section 4.01 with respect to that portion
of the Purchase Price allocable to the SBOs.
Section 8.03 Conditions to the Seller's Closing Obligations. The
obligations of the Seller to consummate the transactions contemplated hereunder
at closing are subject to satisfaction or written waiver by the Seller of the
following conditions:
37
(a) All of the representations and warranties of the Purchaser
under this Agreement shall be true and correct, if qualified as to materiality,
or otherwise true and correct in all material respects, 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 Seller shall have received, or the Seller's attorneys
shall have received, in escrow, all closing documents as specified in Section
9.01 of this Agreement to be delivered by the Purchaser, in such forms as are
agreed upon and acceptable to the Seller, duly executed by all signatories other
than the Seller as required pursuant to the terms hereof;
(c) The final form of all Exhibits hereto (as updated to the
Closing Date as appropriate) shall be in form and substance acceptable in all
respects to the Seller; and
(d) All other terms and conditions of the Purchaser with respect
to this Agreement and the related Purchase Price and Terms Letter shall have
been complied with.
Section 8.04 SBO Closing Conditions. With respect to the sale and
assignment of the SBOs on SBO Closing Date, as referred to in Section 2.02
above, (a) with respect to the Purchaser: each of the conditions set forth in
Section 8.02 shall apply as of the SBO Closing Date, except that the items
referred to in subparagraph (a) thereof shall be supplemented and modified on a
basis consistent with Section 2.02 above; and (b) with respect to the Seller:
the conditions referred to in Section 8.03 above shall apply as of the SBO
Closing Date. Subject to the conditions referred to in clause (a) above, the
Purchaser shall pay to the Seller on the SBO Closing Date that portion of the
Purchase Price attributable to the SBOs being transferred and assigned to the
Purchaser, plus accrued interest, pursuant to Article IV of this Agreement, by
wire transfer of immediately available funds to the account designated by the
Seller.
ARTICLE IX.
CLOSING DOCUMENTS.
Section 9.01 Closing Documents. The closing documents for the
Mortgage Loans to be purchased on the Closing Date shall consist of fully
executed originals of the following documents:
(a) this Agreement and all Exhibits hereto properly and fully
completed, including, without limitation, the Mortgage Loan Schedule, one copy
to be attached hereto, and one copy to be attached to the related Assignment and
Conveyance as the Mortgage Loan Schedule thereto;
38
(b) the Mortgage Loan Documents, the power-of-attorney referred
to in Section 5.03(c) above, the Data Files and the Escrow and Bailee Agreement;
(c) an Officer's Certificate, substantially in the form of
Exhibit 2 hereto, including all attachments thereto;
(d) an opinion of counsel of the Seller (who may be an employee
of the Seller), in a form reasonably approved by the Purchaser;
(e) a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated by the
Seller while conducting business under a name other than its present name, if
applicable;
(f) the Assignment and Conveyance, substantially in the form of
Exhibit 3 hereto;
(g) the Interim Servicing Agreement, substantially in the form of
Exhibit 7 hereto;
(h) the certification of Bailee, in the form of Exhibit B to the
Escrow and Bailee Agreement, in a form acceptable to the Purchaser;
(i) any releases/terminations of security interests, including
all security interests in favor of the Federal Home Loan Bank;
(j) a copy of each consent, approval, authorization or order,
governmental or otherwise, in accordance with Section 6.01(e) above; and
(k) UCC financing statements of the Seller in accordance with
Section 4.02(c) above.
Section 9.02 SBO Closing Documents. The closing documents for the
SBOs to be purchased on the SBO Closing Date shall consist of fully executed
originals of the documents referred to in Section 2.02 above, together with each
item applicable to the SBOs as referred to in Section 9.01, subparagraphs (i)
and (j), above.
ARTICLE X.
COSTS.
Section 10.01 Costs. Except as otherwise expressly set forth in
this Agreement: the Seller shall pay all costs and expenses incurred in
connection with the transfer and delivery of the Mortgage Loans, including
without limitation recording and filing fees, estimated fees for recording
Assignments of Mortgage, the fees and expenses to complete Assignments of
Mortgages and the fees and expenses of Seller's accountants,
39
attorneys and other service providers, and all costs and expenses attributable
to its performance of this Agreement; and the Purchaser shall pay the fees and
expenses of the Purchaser's accountants, attorneys and other service providers,
and all costs and expenses attributable to its performance of this Agreement.
ARTICLE XI.
TERMINATION.
Section 11.01 Termination. The respective obligations and
responsibilities of the Seller shall terminate by mutual consent of the Seller
and the Purchaser in writing.
ARTICLE XII.
MISCELLANEOUS.
Section 12.01 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, return receipt requested, or, if by
other means, when received by the other Party at the address as follows:
(i) if to the Seller:
Bay View Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Purchaser:
Washington Mutual Bank, FA
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
First Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
40
with a copy to:
Washington Mutual Bank, FA
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
First Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as may hereafter be furnished to the other Party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
Section 12.02 Severability Clause. Any part, provision,
representation or warranty 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 or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, 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. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
Party of the economic benefit intended to be conferred by this Agreement, the
Parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
Section 12.03 Counterparts. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
Section 12.04 Governing Law. The Agreement shall be construed in
accordance with the laws of the State of California and the obligations, rights
and remedies of the Parties hereunder shall be determined in accordance with the
substantive laws of the State of California (without regard to conflicts of laws
principles), except to the extent preempted by federal law.
Section 12.05 Recordation of Agreement. To the extent permitted
by applicable law, a memorandum of this Agreement shall be recorded in all
appropriate public offices for real properly records in all the counties or
other comparable
41
jurisdictions in which any Mortgage Property is situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Seller at the Seller's expense on direction of the Purchaser
accompanied by an opinion of counsel to the effect that such recordation
materially and beneficially affects the interest of the Purchaser or is
necessary for the administration or servicing of the Mortgage Loans.
Section 12.06 Intention of the Parties. It is the intention of
the Parties that the Purchaser is purchasing, and the Seller is selling the
Mortgage Loans and not a debt instrument of the Seller or another security.
Accordingly, the Parties each intend to treat the transaction for federal income
tax purposes as a sale by the Seller, and a purchase by the Purchaser, of the
Mortgage Loans. The Purchaser shall have the right to review the Mortgage Loans
and the related Mortgage Loan Documents to determine the characteristics of the
Mortgage Loans which shall affect the federal income tax consequences of owning
the Mortgage Loans and the Seller shall cooperate with all reasonable requests
made by the Purchaser in the course of such review.
Section 12.07 Successors and Assigns; Assignment of Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective permitted successors and assigns of
the Seller and the successors and assigns of the Purchaser. This Agreement shall
not be assigned, pledged or hypothecated by the Seller to a third party without
the consent of the Purchaser. This Agreement may be assigned, pledged or
hypothecated by the Purchaser without the consent of the Seller. If the
Purchaser assigns any or all of its rights as Purchaser hereunder, the assignee
of the Purchaser will become the "Purchaser" hereunder to the extent of such
assignment, provided that the Purchaser shall also remain responsible for its
obligations hereunder, unless the Seller's prior written consent to such
assignment has been obtained.
Section 12.08 Confidentiality; Press Releases. The Parties agree
to maintain in confidence the specific contents and terms of this Agreement and
to disclose same only to those attorneys, accountants and governmental entities
which have a reasonable need to know such contents and terms. Notwithstanding
the foregoing, the Parties agree that disclosures of the contents and terms of
this Agreement may be made to the extent that the disclosing party in good faith
determines that such disclosure is required by law. In the event a Party
receives a request for the disclosure thereof from a third party in an
arbitration or litigation, such Party shall promptly notify the other Party of
such request, identifying the specific information or documents sought to be
disclosed and the proceeding in which such disclosure is sought. Within 15 days
of receipt of such written notice, the Party receiving such notice shall notify
the other Party whether or not such first Party opposes the disclosure; if such
receiving Party opposes the disclosure, the Parties shall mutually cooperate in
the formulation and presentation of an appropriate opposition thereto. In
addition, neither Party shall make any public filing or issue any press release
or other publicity regarding the transactions contemplated by this
42
Agreement without coordinating same with the other Party and providing such
Party, in advance of such filing or publication, the text thereof for review and
comment; each Party shall cooperate with the other in accommodating all
reasonable comments regarding the form and content of any such filing or
publication.
Section 12.09 Attorneys' Fees. If either Party retains an
attorney to enforce any of the provisions of this Agreement or any writing
delivered pursuant hereto, the prevailing Party shall be entitled to reasonable
attorneys' fees and costs from the other Party, including such fees and costs
incurred in both trial and appellate courts and all accounting and other costs
of experts.
Section 12.10 Complete Agreement; Waivers.
(a) This Agreement, the Interim Servicing Agreement and other
documents executed pursuant hereto contain or expressly incorporate by reference
the entire agreement of the Parties with respect to the matters contemplated
herein and therein and supersede all prior negotiations or agreements, written
or oral.
(b) No term or provision of this Agreement may be waived or
modified unless such waiver or modification is in writing and signed by the
Party against whom such waiver or modification is sought to be enforced.
Section 12.11 Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
Section 12.12 General Interpretive Principles. For purposes of
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles," "Sections," "Paragraphs,"
and other Subdivisions without reference to a document are to designated
Articles, Sections, Paragraphs and other subdivisions of this Agreement;
(d) reference to a Section without further reference to a Section
is a reference to such Section as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
43
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean, without
limitation by reason of enumeration.
Section 12.13 Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by any
Party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The Parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a Party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 12.14 Further Agreements. The Seller and the Purchaser
each agree to execute and deliver to the other such reasonable and appropriate
additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Section 12.15 Recordability of Assignments of Mortgage. To the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere.
Section 12.16 No Solicitation. From and after the date of this
Agreement, the Seller agrees that it and its Affiliates will not take any action
or permit or cause any action to be taken by any of its agents or affiliates, or
by any independent contractors on the Seller's behalf, to specifically target,
by telephone, mail or otherwise any Mortgagor for solicitation of refinancing of
the Mortgage Loans, without the prior written consent of the Purchaser.
Section 12.17 Survival. Except as otherwise expressly provided in
Sections 6.04(b) and 6.02A, each representation, warranty and covenant of the
Parties contained in this Agreement or in any writing delivered pursuant to the
provisions of this Agreement and each document executed and delivered pursuant
hereto shall survive the consummation of the transactions contemplated hereby.
[Signatures Commence on Following Page]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
WASHINGTON MUTUAL BANK, FA
(Purchaser)
By:________________________________________
Name:______________________________________
Title:_____________________________________
BAY VIEW BANK, NATIONAL ASSOCIATION
(Seller)
By:________________________________________
Name:______________________________________
Title:_____________________________________
SCHEDULES AND EXHIBITS LISTED IN TABLE OF CONTENTS OMITTED PURSUANT TO ITEM
601 (b) (2) OF REGULATION S-K AND WILL BE PROVIDED SUPPLEMENTALLY TO THE
SECURITIES AND EXCHANGE COMMISSION UPON ITS REQUEST.