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Exhibit 10-W
MASTER REPURCHASE AGREEMENT
Dated as of August 21, 1998
Between:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC., AS BUYER
and
ADVANTA NATIONAL BANK, AS SELLER
and
ADVANTA MORTGAGE HOLDING COMPANY AS A PLEDGOR, ADVANTA MORTGAGE CORP. USA, AS A
PLEDGOR, ADVANTA MORTGAGE CORP. MIDATLANTIC, AS A PLEDGOR, ADVANTA MORTGAGE
CORP. MIDLANTIC II, AS A PLEDGOR, ADVANTA MORTGAGE CORP. MIDWEST, AS A PLEDGOR,
ADVANTA MORTGAGE CORP. OF NEW JERSEY, AS A PLEDGOR, ADVANTA MORTGAGE CORP.
NORTHEAST, AS A PLEDGOR, ADVANTA MORTGAGE CONDUIT SERVICES, INC., AS A PLEDGOR,
AND ADVANTA FINANCE CORP., AS A PLEDGOR (COLLECTIVELY, THE "PLEDGORS")
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in
which Advanta National Bank ("Seller"), agrees to transfer to ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc. ("Buyer") Mortgage Loans against the
transfer of funds by Buyer, with a simultaneous agreement by Buyer to
transfer to Seller such Mortgage Loans at a date certain not later than
180 days after the date of transfer or on demand, as specified in the
Confirmation, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a "Transaction" and shall be
governed by this Repurchase Agreement and the related Confirmation,
unless otherwise agreed in writing.
The Pledgors are Affiliates of the Seller which may from time to time
transfer Mortgage Loans to the Seller. It is a condition of the
transfer of the Mortgage Loans by the Pledgors to the Seller that the
Pledgors grant a security interest in all of their right, title and
interest, if any, in such Mortgage Loans to the Buyer.
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The Pledgors are also party to that certain Master Loan and Security
Agreement dated as of the date hereof between the Pledgors (as
Borrowers thereunder) and the Buyer (as Lender thereunder) (the "Loan
Agreement"). In consideration of the benefits derived by the Pledgors,
and as a further condition to the Lender agreeing to enter into the
Loan Agreement and the Repurchase Agreement, the Pledgors are parties
hereto with respect to their interests in the Mortgage Loans.
2. DEFINITIONS
As used herein, the following terms shall have the following meanings
(all terms defined in this Section 2 or in other provisions of this
Repurchase Agreement in the singular to have the same meanings when
used in the plural and vice versa) Terms otherwise not defined herein
shall have the meanings set forth in the Loan Agreement and/or the
related Confirmation:
"Adequately Capitalized" shall mean, with respect to any Insured
Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels
for such capital category under the regulations promulgated pursuant to
Section 1831(o) ("Prompt Corrective Action") of the United States Code,
as amended from time to time, by the Appropriate Federal Banking Agency
for such institution, as such regulation may be amended from time to
time.
"Additional Purchased Loans" means Mortgage Loans or cash provided by
Seller to Buyer or its designee pursuant to Section 4(a).
"Affiliate" means, (i) with respect to the Buyer, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Group,
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, and (ii) with respect to
the Seller, any "affiliate" of the Seller as such term is defined in
the United States Bankruptcy Code in effect from time to time.
"Affiliate Guaranty" shall mean the Amended and Restated Affiliate
Guaranty, entered into by the Guarantor on the date hereof.
"Affiliate Transfer" shall mean the transfer of Mortgage Loans or any
interest therein by an Affiliate of the Seller to the Seller.
"Affiliate Transfer Documents" with respect to any Affiliate Transfer
shall mean all documents and agreements evidencing or related to the
Affiliate Transfer, including without limitation all agreements
pursuant to which any Affiliate of the Seller transfers the Mortgage
Loans or any interest therein or any other collateral securing the
Underlying Obligation, including without limitation all guarantees,
copies of acknowledgment, copies of all Uniform Commercial Code
financing statements and assignments thereof filed in connection with
the Underlying Obligation or in connection with the pledge thereof to
the Buyer hereunder and any and all Affiliate Transfer Documents.
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"Agency" means FNMA, FHLMC or GNMA.
"Appraised Value" shall mean the value of the Mortgaged Property as set
forth in an appraisal, prepared in accordance with the Underwriting
Guidelines, made in connection with the origination of the related
Mortgage Loan.
"Appropriate Federal Banking Agency" shall have the meaning ascribed to
it by Section 1813(q) of Title 12 of the United States Code, as amended
from time to time.
"Available Committed Purchase Amount" shall mean the Maximum Committed
Amount, minus the sum of (i) the aggregate amount of Transactions
outstanding hereunder, and (ii) the aggregate amount of Loans
outstanding under the Loan Agreement.
"Available Purchase Amount" shall mean the Maximum Purchase Amount
minus the sum of (i) the aggregate amount of Transactions outstanding
hereunder and (ii) the aggregate amount of Loans outstanding under the
Loan Agreement.
"Balloon Mortgage Loan" shall mean any Mortgage Loan for which the
related monthly payments, other than the monthly payment due on the
maturity date thereof, are computed on the basis of a period to full
amortization ending on a date that is later than such maturity date.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978,
as amended from time to time.
"Business Day" shall mean any day other than (i) a Saturday or Sunday
or (ii) a day on which the New York Stock Exchange, the Federal Reserve
Bank of New York or the Trustee is authorized or obligated by law or
executive order to be closed or (iii) a day in which banks are
authorized or obligated by law or executive order to be closed in the
Commonwealth of Pennsylvania, the State of California or the State of
Delaware.
"Buyer" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" has the meaning specified in Section 6.
"Collateral Value" shall mean, with respect to each Mortgage Loan the
lesser of (i) the applicable Margin Amount Percentage multiplied by the
Market Value of such Mortgage Loan and (ii) the outstanding principal
balance of such Mortgage Loan, provided, that
(i) the Collateral Value shall be deemed to be zero with respect
to each Mortgage Loan (1) in respect of which there is a
material breach of a representation and warranty set forth on
Exhibit 2 (assuming each representation and warranty is made
as of the date Collateral Value is determined), (2) which is a
Mortgage
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Loan of the type specified in subparagraphs (ii)-(viii)
hereof, which is in excess of the limits permitted under
subparagraphs (ii)-(viii) hereof, (3) which has not been
repurchased by the Seller by 180 days after the date on which
it is first purchased by Buyer, (4) which has been released
from the possession of the Trustee under the Pooling and
Servicing Agreement to the Seller for a period in excess of 14
days, (5) which is a Delinquent Mortgage Loan and is not
repurchased by the Seller hereunder upon repurchase of some or
all of the Mortgage Loans purchased by the Buyer hereunder (in
accordance with the terms of this Repurchase Agreement) for
the purpose of issuing securities backed by such Mortgage
Loans and (6) for which the Trustee does not have in its
possession the original Mortgage Note, unless such possession
has been otherwise waived by the Buyer in writing;
(ii) the aggregate Collateral Value of Eligible Mortgage Loans
which are Second Lien Mortgage Loans may not exceed 20% of the
aggregate Purchase Price for all Purchased Mortgage Loans
subject to then-outstanding Transactions under this Repurchase
Agreement;
(iii) the sum of (a) the aggregate Collateral Value of Eligible
Mortgage Loans which are secured by a Manufactured Dwelling
and (b) the aggregate Collateral Value of Mortgage Loans
pledged under the Loan Agreement which are secured by
Manufactured Dwellings may not exceed 5% of the Maximum
Purchase Amount;
(iv) the sum of (a) the aggregate Collateral Value of Eligible
Mortgage Loans which are Mixed Use Mortgage Loans and (b) the
aggregate Collateral Value of Mortgage Loans pledged under the
Loan Agreement which are Mixed Use Mortgage Loans may not
exceed 1% of the Maximum Purchase Amount;
(v) the sum of (a) the aggregate Collateral Value of Eligible
Mortgage Loans which are Balloon Mortgage Loans and (b) the
aggregate Collateral Value of Mortgage Loans pledged under the
Loan Agreement which are Balloon Mortgage Loans may not exceed
25% of the Maximum Purchase Amount;
(vi) the sum of (a) the aggregate Collateral Value of first lien
Eligible Mortgage Loans that are High LTV Mortgage Loans and
(b) the aggregate Collateral Value of Mortgage Loans pledged
under the Loan Agreement that are High LTV Mortgage Loans may
not exceed 10% of the Maximum Purchase Amount;
(vii) the aggregate Collateral Value of Eligible Mortgage Loans
which are 59-Day Delinquent Mortgage Loans may not exceed 3%
of the aggregate Purchase Price for all Purchased Mortgage
Loans that are subject to then outstanding Transactions under
this Repurchase Agreement; and
(viii) the aggregate Collateral Value of Eligible Loans which are
89-Day Delinquent Mortgage Loans may not exceed 1% of the
aggregate Purchase Price for all
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Purchased Mortgage Loans that are subject to then outstanding
Transactions under this Repurchase Agreement.
"Collection Account" shall have the meaning set forth in Section 6.01
of the Pooling and Servicing Agreement.
"Combined LTV" or "CLTV" shall mean with respect to any Mortgage Loan,
the ratio of (a) the outstanding principal balance as of the related
date of origination of such Mortgage Loan of (i) the Mortgage Loan plus
(ii) the mortgage loan constituting the first lien (if any) to (b) the
Appraised Value of the Mortgaged Property.
"Committed Purchase" shall mean a Transaction which is subject to
Buyer's commitment to purchase hereunder.
"Confirmation" has the meaning specified in Section 3(b).
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Delinquent Mortgage Loan" shall mean 59-Day Delinquent Mortgage Loans
and 89-Day Delinquent Mortgage Loans.
"Discrepancy" shall mean any discrepancy between the information set
forth on the Mortgage Loan Tape and the information discovered as a
result of the Buyer's Due Diligence Review, in all cases, based upon
the Underwriting Guidelines and the Borrower's credit classification
criteria.
"Due Diligence Review" shall mean the performance by the Buyer of any
or all of the reviews permitted under Section 27 hereof with respect to
any or all of the Mortgage Loans, as desired by the Buyer from time to
time.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 3(a) shall have been satisfied.
"89-Day Delinquent Mortgage Loan" shall mean a Mortgage Loan made by
the Seller to a Mortgagor or acquired by the Seller and underwritten
substantially in accordance with the Underwriting Guidelines, a copy of
the current version of which is attached hereto as Exhibit III, and
which is at least 60 days, but not more than 89 days, delinquent with
respect to the payment of principal or interest (without regard to any
applicable grace period).
"Eligible Mortgage Loan" shall mean (a) a Mortgage Loan secured by a
first or second mortgage lien (as reflected on the Mortgage Loan Tape)
on a one-to-four family residential property (i) as to which the
representations and warranties in Section 6.10 and Part I of Schedule 1
hereof are correct in all material respects and (ii) which is
underwritten substantially in accordance with the Seller's Underwriting
Guidelines, a
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copy of which is attached hereto as Exhibit III, provided that
notwithstanding the foregoing, a Mortgage Loan that is transferred from
an Affiliate shall only be an Eligible Mortgage Loan if such Affiliate
is a Pledgor hereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section
414(b) or (c) of the Code of which any Borrower is a member and (ii)
solely for purposes of potential liability under Section 302(c)(11) of
ERISA and Section 412(c)(11) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Code, described in
Section 414(m) or (o) of the Code of which any Borrower is a member.
"Eurocurrency Reserve Requirements" shall mean, for any day as applied
to a Transaction, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements applicable to
the Buyer in effect on such day (including without limitation basic,
supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto),
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) maintained by a member bank of such Governmental Authority.
"Eurodollar Base Rate" shall mean, with respect to each day a
transaction is outstanding (or if such day is not a Business Day, the
next succeeding Business Day), the rate per annum equal to the rate
appearing at page 5 of the Telerate Screen as one-month LIBOR on such
date, and if such rate shall not be so quoted, the arithmetic average
determined in good faith by the Buyer, of the rate per annum at which
the Buyer is offered Dollar deposits at or about 10:00 A.M., New York
City time, on such date by at least three unaffiliated prime banks in
the interbank eurodollar market where the eurodollar and foreign
currency exchange operations in respect of its Transactions are then
being conducted for delivery on such day for a period of 30 days and in
an amount comparable to the amount of the Transactions to be
outstanding on such day.
"Eurodollar Rate" shall mean, with respect to each day a transaction is
outstanding, a rate per annum determined by the Buyer in its sole
discretion in accordance with the following formula (rounded upwards to
the nearest 1/100th of one percent), which rate as determined by the
Buyer shall be conclusive absent manifest error by the Buyer:
Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
"Event of Default" has the meaning specified in Section 12.
"FHA" means the Federal Housing Administration, an agency within HUD.
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"FHLMC" means the Federal Home Loan Mortgage Corporation.
"FHLMC Guide" means the FHLMC Sellers/Servicers Guide, as amended from
time to time.
"59-Day Delinquent Mortgage Loan" shall mean a Mortgage Loan made by
the Seller to a Mortgagor or acquired by the Seller and underwritten
substantially in accordance with the Underwriting Guidelines, a copy of
the current version of which is attached hereto as Exhibit III, and
which is at least 30 days, but not more than 59 days, delinquent with
respect to the payment of principal or interest (without regard to any
applicable grace period).
"FNMA" means the Federal National Mortgage Association.
"FNMA Guide" means the FNMA Selling, Servicing and MBS Guides, as
amended from time to time.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States.
"GNMA" means the Government National Mortgage Association.
"GNMA Guide" means the GNMA Mortgage-Backed Securities Guide, as
amended from time to time.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator
having jurisdiction over the Seller, any of its Subsidiaries or any of
their properties.
"Guarantor" shall mean Advanta Corp., a Delaware corporation.
"High LTV Mortgage Loans" shall mean first and second lien Eligible
Mortgage Loans with an LTV greater than 90% and less than or equal to
100%.
"HUD" means the United States Department of Housing and Urban
Development.
"Income" means, with respect to any Mortgage Loan at any time, any
principal thereof then payable and all interest, dividends or other
distributions payable thereon less any related servicing fee(s) charged
by the Servicer.
"Insured Depository Institution" shall have the meaning ascribed to
such term by Section 1813(c)(2) of Title 12 of the United States Code,
as amended from time to time.
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"Interest Rate Protection Agreement" shall mean, with respect to any or
all of the Mortgage Loans, any short sale of US Treasury Security, or
futures contract, or mortgage related security, or Eurodollar futures
contract, or options related contract, or interest rate swap, cap or
collar agreement or similar arrangements providing for protection
against fluctuations in interest rates or the exchange of nominal
interest obligations, either generally or under specific contingencies,
entered into by any Borrower or the Guarantor.
"Lien" shall mean any mortgage, lien, pledge, charge, security interest
or similar encumbrance.
"Loan" shall mean any loan made pursuant to the Loan Agreement.
"Loan Agreement" shall mean that certain Amended and Restated Master
Loan and Security Agreement, dated as of the date hereof by and among
the Seller (as Pledgor thereunder), the Pledgors (as Borrowers
thereunder) and the Buyer (as Lender thereunder).
"Loan-to-Value Ratio" or "LTV" shall have the meaning assigned thereto
in Exhibit II of this Master Purchase Agreement.
"Manufactured Dwelling" shall mean a fully attached manufactured home
which is considered and treated as "real estate" under applicable state
law.
"Margin Amount" means, with respect to any Transaction, the amount
obtained by application of the Margin Amount Percentage to the Purchase
Price for such Transaction.
"Margin Amount Percentage" shall mean (a) with respect to all Eligible
Mortgage Loans other than Delinquent Mortgage Loans and High LTV
Mortgage Loans, 96%; (b) with respect to all Eligible Mortgage Loans
that are Delinquent Mortgage Loans, 90%; and (c) with respect to all
Eligible Mortgage Loans that are High LTV Mortgage Loans, 94%.
"Margin Deficit" has the meaning specified in Section 4(a).
"Margin Excess" has the meaning specified in Section 4(b).
"Market Value" shall mean as of any date in respect of a Mortgage Loan,
the price at which such Mortgage Loan could readily be sold as
reasonably determined in good faith by the Buyer, which price may be
determined to be zero. The Buyer's determination of Market Value shall
be conclusive upon the parties absent manifest error on the part of the
Buyer.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the Property, business, operations or financial condition of the
Repurchase Agreement Parties taken
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as a whole, (b) the ability of the Seller or the Guarantor to perform
their obligations under any of the Transaction Documents to which they
are a party, (c) the validity or enforceability of any of the
Repurchase Documents, (d) the practical realization of the Buyer's
rights and remedies under any of the Repurchase Documents, taken as a
whole, (e) the timely payment of any amounts payable in connection with
any Transaction or (f) the value of the Purchased Mortgage Loans taken
as a whole.
"Maximum Committed Amount" shall mean $375,000,000.
"Maximum Purchase Amount" shall mean the sum of the Maximum Committed
Amount and the Maximum Uncommitted Amount, which shall equal
$750,000,000.
"Maximum Uncommitted Amount" shall mean $375,000,000.
"Misclassified Mortgage Loan" shall mean any Mortgage Loan for which
the Buyer discovers a Discrepancy which affects the classification of
the Mortgage Loan.
"Mixed Use Mortgage Loan" shall mean a Mortgage Loan secured by a
Mortgaged Property that is used primarily for residential purposes, but
which is also used for non-residential purposes.
"Mortgage" means a mortgage, deed of trust, deed to secure debt or
other instrument, creating a valid and enforceable first or second lien
on or first or second priority ownership interest in an estate in fee
simple in real property and the improvements thereon, securing a
Mortgage Note or similar evidence of indebtedness.
"Mortgage Backed Securities Program" means the mortgage loan
securitization programs of GNMA, FNMA, and FHLMC, collectively.
"Mortgage File" means the documents specified as the "Mortgage File" in
Exhibit a of the Pooling and Servicing Agreement.
"Mortgage Loan" shall mean a mortgage loan purchased by the Buyer
hereunder and which the Trustee has been instructed to hold for the
Buyer pursuant to the Pooling and Servicing Agreement, and which
Mortgage Loan includes, without limitation, (i) a Mortgage Note and
related Mortgage and (ii) all right, title and interest of the Seller
and the Pledgors in and to the Mortgaged Property covered by such
Mortgage.
"Mortgage Loan Schedule" has the meaning assigned thereto in the
Pooling and Servicing Agreement.
"Mortgage Note" means a promissory note or other evidence of
indebtedness of a Mortgagor with respect to a Mortgage Loan, secured by
a Mortgage.
"Mortgaged Property" means the real property (including all
improvements, buildings, fixtures, building equipment and personal
property thereon and all additions, alterations
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and replacements made at any time with respect to the foregoing) and
all other collateral securing repayment of the debt evidenced by a
Mortgage Note.
"Mortgagee" means the record holder of a Mortgage Note secured by a
Mortgage.
"Mortgagor" means the obligor on a Mortgage Note and the grantor of the
related Mortgage.
"Periodic Advance Repurchase Payment" has the meaning specified in
Section 5(b).
"Plan" shall mean an employee benefit or other plan established or
maintained by any Borrower or any ERISA Affiliate and covered by Title
IV of ERISA, other than a Multiemployer Plan.
"Pledged Certificate" shall mean a certificate substantially in the
form of Exhibit C to the Pooling and Servicing Agreement authenticated
by the Trustee, issued in the name of the Buyer and pledged and
delivered to the Buyer hereunder, representing a 100% interest in a
Pledged Series Pool of Eligible Mortgage Loans held by Trustee for the
benefit of the Buyer, as to which the representations and warranties in
Section 10 and Part II of Exhibit II hereof are correct in all material
respects.
"Pledgor" has the meaning specified in Section 1.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of May 1, 1997, among Advanta Mortgage Conduit
Services, Inc, as Sponsor, Advanta Mortgage Corp. USA as Master
Servicer, Advanta Mortgage Holding Company, Advanta Mortgage Corp.
Midatlantic, Advanta Mortgage Corp. Midatlantic II, Advanta Mortgage
Corp. Midwest, Advanta Mortgage Corp. of New Jersey, Advanta Mortgage
Corp. Northeast; Advanta Mortgage Conduit Services, Inc., and Advanta
Finance Corp. and Advanta National Bank as Borrowers, and Bankers Trust
Company of California, N.A. as Trustee as amended by Amendment # 1 to
the Pooling and Servicing Agreement, dated as of the date hereof which
added Advanta National Banks as a party thereto.
"Borrower" shall mean Advanta National Bank as Seller hereunder.
"Lender" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. as Buyer
hereunder.
"Loan Agreement" shall mean this Repurchase Agreement.
"Loan Agreement Event of Default" shall mean an Event of Default under
this Repurchase Agreement.
"Pledge" shall mean a purchase under a Transaction.
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"Pledge Date" shall mean Purchase Date.
"Pledge Notice" shall mean the notice of purchase by Buyer of Mortgage
Loans hereunder, provided by Seller to Trustee.
"Pledge Review Procedures" shall mean the review procedures applicable
to Purchased Mortgage Loans.
"Pledged Certificate" shall mean the certification of purchase provided
by the Trustee to the Buyer, acknowledging the Buyer's interest in
Purchase Mortgage Loans.
"Pledged Mortgage Loan" shall mean "Purchased Mortgage Loan"
"Release of Pledge Notice" shall mean the release of Buyer's interest
in Purchase Mortgage Loans, delivered by Buyer to Trustee.
"Price Differential" means, with respect to any Transaction hereunder
as of any date, the aggregate amount obtained by daily application of
the Pricing Rate for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of days
during the period commencing on (and including) the Purchase Date for
such Transaction and ending on (but excluding) the Repurchase Date
(reduced by any amount of such Price Differential previously paid by
Seller to Buyer with respect to such Transaction).
"Pricing Rate" means the per annum percentage rate specified in the
Confirmation for determination of the Price Differential which shall
not exceed the Eurodollar rate plus the applicable Pricing Spread.
"Pricing Spread" means 0.60%.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible.
"Purchase Date" means the date on which Purchased Mortgage Loans are
transferred by Seller to the Buyer or its designee (including the
Trustee) as specified in the Confirmation.
"Purchase Price" means on each Purchase Date, the price at which
Purchased Mortgage Loans are transferred by Seller to Buyer or its
designee (including the Trustee) which shall equal lesser of (i) the
Margin Amount Percentage of the Market Value of such Mortgage Loan or
(2) the outstanding principal balance of such Mortgage Loan.
"Purchased Mortgage Loans" means the Mortgage Loans sold by Seller to
Buyer in a Transaction, and any Additional Purchased Loans.
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"Regulations T, U and X" shall mean Regulations T, U and X of the Board
of Governors of the Federal Reserve System (or any successor), as the
same may be modified and supplemented and in effect from time to time.
"Replacement Assets" has the meaning specified in Section 13(b).
"Repurchase Agreement" shall mean this Master Repurchase Agreement
among Buyer, Seller and Pledgors, dated as of the date hereof as the
same may be further amended, supplemented or otherwise modified in
accordance with the terms hereof.
"Repurchase Agreement Parties" shall mean each of the Pledgors, the
Guarantor, and the Seller.
"Repurchase Date" means the date on which Seller is to repurchase the
Purchased Mortgage Loans from Buyer, including any date determined by
application of the provisions of Sections 3 or 13, as specified in the
Confirmation.
"Repurchase Documents" shall mean this Repurchase Agreement, the
Affiliate Guaranty and the Pooling and Servicing Agreement.
"Repurchase Price" means the price at which Purchased Mortgage Loans
are to be transferred from Buyer or its designee (including the
Trustee) to Seller upon termination of a Transaction, which will be
determined in each case (including Transactions terminable upon demand)
as the sum of the Purchase Price and the Price Differential as of the
date of such determination decreased by all cash, Income and Periodic
Advance Repurchase Payments actually received by Buyer pursuant to
Sections 5(a) and 5(b), respectively.
"Responsible Officer" shall mean, as to any Person, the chief executive
officer, the president, any vice president or the treasurer of such
Person.
"Restricted Transaction" shall mean any transaction of merger or
consolidation or amalgamation by the Seller or the Guarantor; or any
voluntary or involuntary liquidation, winding up or dissolution of the
Seller or the Guarantor; or sale of all or substantially all of the
Seller's or the Guarantor's assets (it being understood that a
securitization of loan assets shall not be deemed a sale of all or
substantially all assets).
"Second Lien Mortgage Loan" shall mean any Mortgage Loan underwritten
substantially in accordance with the Underwriting Guidelines with
respect to which the lien of the mortgage, deed of trust or other
instrument securing a mortgage note creates a second lien on the
Mortgaged Property.
"Seller" shall mean Advanta National Bank.
"Servicer" has the meaning specified in Section 24 hereof.
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"Servicing Agreement" has the meaning specified in Section 24 hereof,
and shall include but not be limited to the Pooling and Servicing
Agreement.
"Servicing Records" has the meaning specified in Section 24 hereof.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation,
partnership or other entity (irrespective of whether or not at the time
securities or other ownership interests of any other class or classes
of such corporation, partnership or other entity shall have or might
have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such Person or
one or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person.
"Swap Agreement" means any interest rate swap, cap or collar agreement,
interest rate future or option contract, currency swap agreement,
currency future or option contract and other similar agreement.
"Termination Date" means the date which is 364 days from the date
hereof which shall be August 20, 1999.
"Transaction" has the meaning specified in Section 1.
"Transaction Documents" shall mean the Loan Documents and the
Repurchase Documents.
"Transaction Party" shall mean each of the Seller, the Pledgors and the
Guarantor.
"Trustee" means Bankers Trust Company of California N.A. as Trustee
under the Pooling and Servicing Agreement.
"Underlying Obligation" means the obligations of the related Pledgor to
the Seller with respect to an Affiliate Transfer.
"Underwriting Guidelines" shall mean the underwriting guidelines
delivered by the Repurchase Agreement Parties to the Buyer on or prior
to the Effective Date and as may be supplemented from time to time
thereafter.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by
reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Collateral
is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "Uniform Commercial Code" shall mean
the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of
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the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
"Well Capitalized" shall mean, with respect to any Insured Depository
Institution, the maintenance by such Insured Depository Institution of
capital ratios at or above the required minimum levels for such capital
category under the regulations promulgated pursuant to Section 1831(o)
("Prompt Corrective Action") of the United States Code, as amended from
time to time, by the Appropriate Federal Banking Agency for such
institution, as such regulation may be amended from time to time.
3. INITIATION; CONFIRMATION; TERMINATION
(a) Conditions Precedent to Initial Transaction. Buyer's
obligation to enter into the initial Transaction hereunder is subject to the
satisfaction, immediately prior to or concurrently with the making of such
Transaction, of the condition precedent that Buyer shall have received from
Seller any fees and expenses payable hereunder, and all of the following
documents, each of which shall be satisfactory to Buyer and its counsel in form
and substance:
(i) The following Repurchase Documents delivered to the Buyer:
(A) Master Repurchase Agreement, duly completed and
executed by the parties thereto. In addition, the Seller and the
Pledgors shall have taken such other action as the Buyer shall have
requested in order to perfect the security interests created pursuant
to this Repurchase Agreement, including execution of UCC-1 and UCC-3
financing statements in form and substance satisfactory to the Buyer.
(B) Amendment No. 1 to the Pooling and Servicing
Agreement, duly completed and executed by the parties thereto.
(C) Affiliate Guaranty, duly completed and executed
by the Guarantor.
(D) Loan Agreement. The Loan Agreement between the
Pledgors (as Borrowers thereunder) and the Buyer (as Lender
thereunder), duly executed, with all required documents thereunder
delivered to Buyer.
(ii) Officer's Certificate. An officer's certificate
certifying that the Pooling and Servicing Agreement dated as of May 1,
1997 among Bankers Trust Company of California, N.A., as Trustee,
Advanta Mortgage Conduit Services, Inc., as Sponsor, Advanta Mortgage
Corp. USA, as Master Servicer and the remaining Borrowers, has not been
modified or amended, other than as amended by Amendment # 1 to the
Pooling and Servicing Agreement, and remains in full force and effect
as of the date hereof.
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(iii) Opinions of Counsel. An opinion or opinions of counsel
to the Seller and to the Guarantor, substantially in the form of
Exhibit C to the Loan Agreement;
(iv) Organizational Documents. A good standing certificate and
certified copies of the charter and by-laws (or equivalent documents)
of the Seller and Pledgors and of all corporate or other authority for
the Seller and the Pledgors with respect to the execution, delivery and
performance of the Repurchase Documents and each other document to be
delivered by each Seller and Pledgor from time to time in connection
herewith (and the Buyer may conclusively rely on such certificate until
it receives notice in writing from each Seller or Pledgor to the
contrary);
(v) Underwriting Guidelines. A copy of Seller's current
Underwriting Guidelines, and any material changes to the Underwriting
Guidelines made since the Underwriting Guidelines were last delivered
to Purchaser.
(vi) Organizational Documents for Guarantor. Certificate of
Incumbency of Guarantor attaching the charter, bylaws, good standing
certificate, and resolutions of the Executive Committee of the Board of
Directors of Guarantor, authorizing execution and performance of the
Affiliate Guaranty;
(vii) Other Documents. Such other documents as Buyer may
reasonably request, in form and substance reasonably acceptable to
Buyer.
(b) Conditions Precedent to all Transactions. Buyer's
obligation to enter into each Transaction (including the initial Transaction) is
subject to the satisfaction of the following further conditions precedent, both
immediately prior to entering into such Transaction and also after giving effect
thereto to the intended use thereof:
(i) no Default or Event of Default shall have occurred and be
continuing under the Repurchase Documents;
(ii) both immediately prior to the Transaction and also after
giving effect thereto and to the intended use thereof, the
representations and warranties made by the Seller in Section 10 hereof,
shall be true and complete on and as of such Purchase Date in all
material respects (in the case of the representations and warranties in
Section 10(xv) and Exhibit 2, solely with respect to Purchased Mortgage
Loans) with the same force and effect as if made on and as of such date
(or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date). The Buyer
shall have received an officer's certificate signed by a Responsible
Officer of the Seller certifying as to the truth and accuracy of the
above, which certificate shall specifically include a statement that
such Seller is in compliance in all material respects with all
governmental licenses and authorizations and is qualified to do
business and in good standing in all required jurisdictions except
where the failure to be in such compliance or so qualified would not
have a Material Adverse Effect.
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(iii) subject to the Buyer's right to perform one or more Due
Diligence Reviews pursuant to Section 27 hereof, the Buyer shall have
completed its due diligence review of the Mortgage Loan Documents for
each Purchased Mortgage Loan and such other documents, records,
agreements, instruments, mortgaged properties or information relating
to such Mortgage Loans as the Buyer in its sole discretion deems
appropriate to review and such review shall be satisfactory to the
Buyer in its sole discretion;
(iv) the Buyer shall have received from the Trustee a Mortgage
Loan Schedule and Collateral Report with exceptions acceptable to the
Buyer in its sole discretion in respect of Eligible Mortgage Loans to
be purchased hereunder on such Business Day;
(v) the Trustee shall have received a Pledge Notice
substantially in the form provided in the Pooling and Servicing
Agreement (a copy of which shall be delivered to the Buyer);
(vi) the Seller shall have received duly authenticated Pledged
Certificates representing the Mortgage Loans purchased under the
Transaction;
(vii) none of the following shall have occurred and/or be
continuing:
(A) an event or events shall have occurred resulting in the
effective absence of a "repo market" or comparable "lending market" for
financing debt obligations secured by mortgage loans or securities for
a period of (or reasonably expected to be) at least 30 consecutive days
or an event or events shall have occurred resulting in the Buyer not
being able to finance Purchased Mortgage Loans through the "repo
market" or "lending market" with traditional counterparties at rates
which would have been reasonable prior to the occurrence of such event
or events, provided that the Buyer shall notify the Seller promptly
upon the occurrence of any such event, provided further that this
Section 3(b)(vi)(A) shall not take effect until 5 Business Days after
such notice; or
(B) an event or events shall have occurred resulting in the
effective absence of a "securities market" for securities backed by
mortgage loans for a period of (or reasonably expected to be) at least
30 consecutive days or an event or events shall have occurred resulting
in the Buyer not being able to sell securities backed by mortgage loans
at prices which would have been reasonable prior to such event or
events, provided that the Buyer shall notify the Seller promptly upon
the occurrence of any such event, provided further that this Section
3(b)(vi)(B) shall not take effect until 5 Business Days after such
notice.
Each Request for Purchase by the Seller hereunder shall constitute a
certification by the Seller that all the conditions set forth in this
Section 3(b) have been satisfied (both as of the date of such notice,
request or confirmation and as of the date of such borrowing).
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(c) No later than 4:00 p.m. (New York time) one Business Day prior to
the specified Purchase Date, Buyer, and Trustee, shall have received
via facsimile, and in electronic form, a Request for Purchase in the
form of Exhibit IV hereof (i) attach a schedule identifying the
Eligible Mortgage Loans that the Seller proposes to sell to the Buyer
on such Purchase Date, (ii) specifying the requested Purchase Date,
(iii) including a Mortgage Loan Tape containing information with
respect to the Eligible Mortgage Loans that the Seller proposes to sell
to the Buyer, and (iv) attach an Officer's Certificate of the Seller as
required by Section 3(b)(ii) hereof.
(d) An agreement to enter into a Transaction may be entered into orally
or in writing at the initiation of either Buyer or Seller. In any
event, Buyer shall confirm the terms of each Transaction by issuing a
written confirmation to the Seller, via telecopy or delivered by hand,
in the form of Exhibit I attached hereto (a "Confirmation") promptly
after the parties enter into such Transaction. Such Confirmation shall
describe the Purchased Mortgage Loans, identify Buyer and Seller and
set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the
Repurchase Date, unless the Transaction is to be terminable on demand
of the Seller, (iv) the Pricing Rate applicable to the Transaction, and
(v) may contain additional terms or conditions not inconsistent with
this Repurchase Agreement.
(e) Any Confirmation by Buyer shall be deemed to have been received by
Seller when delivered by hand, or, if sent via telecopy, when sent.
(f) Each Confirmation, together with this Repurchase Agreement, shall
be conclusive evidence of the terms of the Transaction(s) covered
thereby unless objected to in writing by the Seller no more than three
(3) Business Days after the date the Confirmation was received by the
Seller or unless a corrected Confirmation is sent by Buyer. An
objection sent by the Seller must state specifically that the writing
is an objection, must specify the provision(s) being objected to by the
Seller, must set forth such provision(s) in the manner that the Seller
believes they should be stated, and must be received by Buyer no more
than three (3) Business Days after the Confirmation was received by the
Seller.
(g) No later than 4:00 p.m., New York City time, one day prior to the
requested Purchase Date, the Seller shall deliver to the Trustee the
Mortgage File pertaining to each Eligible Mortgage Loan to be purchased
by the Buyer. Not later than 12:00 noon, New York City time, on the
requested Purchase Date, the Trustee shall issue and deliver the
relevant Pledged Certificate to the Buyer, in accordance with the terms
and conditions of the Pooling and Servicing Agreement.
(h) Pursuant to the Pooling and Servicing Agreement, the Trustee shall
deliver to the Buyer and the Seller, by no later than 3:00 p.m. New
York City time on a Purchase Date, a Mortgage Loan Schedule and
Collateral Report in respect of all Mortgage Loans purchased by the
Buyer on such Purchase Date. Subject to Sections 3(a) and 3(b) hereof,
the Purchase Price will then be made available to the Seller by the
Buyer
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transferring, via wire transfer, in the aggregate amount of such
borrowing in funds immediately available pursuant to Wire Instructions
set forth in the Request for Purchase (subject to the purchase limits
set forth in Section 3(k) hereof).
(i) In the case of Transactions terminable upon demand by Seller, such
demand shall be made by Seller by telephone or otherwise, no later than
3 p.m. (New York time) on the Business Day prior to the day on which
such termination will be effective.
(j) The Seller may repurchase Purchased Mortgage Loans without penalty
or premium, on any date. The Repurchase Price payable for the
repurchase of any such Mortgage Loan shall be reduced as provided in
Section 5(c). If the Seller intends to make such a repurchase other
than on a Repurchase Date, the Seller shall give one (1) Business Day's
prior written notice thereof to the Buyer, designating the Purchased
Mortgage Loans to be repurchased. If such notice is given, the amount
specified in such notice shall be due and payable on the date specified
therein, and, on receipt, such amount shall be applied to the
Repurchase Price for the designated Mortgage Loans. The amount of the
original Purchase Price of the Mortgage Loan thus repurchased shall be
available for subsequent Transactions subject to the terms of this
Repurchase Agreement.
(k) On the Repurchase Date, termination of the Transaction will be
effected by transfer to Seller or its designee of the Purchased
Mortgage Loans (and any Income in respect thereof received by Buyer not
previously credited or transferred to, or applied to the obligations
of, Seller pursuant to Section 5) against the simultaneous transfer of
the Repurchase Price to an account of Buyer. Seller is obligated to
obtain the Mortgage Files from Buyer or its designee (including the
Trustee) at Seller's expense on the Repurchase Date.
(l) With respect to all Transactions hereunder, the aggregate Purchase
Price for all Purchased Mortgage Loans at any one time subject to then
outstanding Transactions under this Repurchase Agreement shall not
exceed the Maximum Purchase Amount minus the aggregate principal amount
of outstanding Loans under the Loan Agreement. Notwithstanding the
preceding sentence, Buyer shall have no obligation to enter into any
Transaction if, as a result of such transaction the aggregate Purchase
Price for all Transactions subject to then outstanding Transactions
under this Repurchase Agreement shall exceed the Available Committed
Purchase Amount. Buyer shall not enter into any Transaction if the
aggregate Purchase Price of such Purchased Mortgage Loans exceeds the
Available Purchase Amount.
4. MARGIN AMOUNT MAINTENANCE
(a) If at any time the aggregate Collateral Value of the related
Purchased Mortgage Loans subject to all Transactions is less than the
aggregate Purchase Price for all such Transactions (a "Margin
Deficit"), then Buyer may by notice to Seller require Seller to
transfer to Buyer or its designee (including the Trustee) Mortgage
Loans or cash ("Additional Purchased Loans"), so that the cash and
aggregate Collateral Value of the
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Purchased Mortgage Loans, including any such Additional Purchased
Loans, will thereupon equal or exceed the aggregate Margin Amount.
(b) If at any time the aggregate Collateral Value of all Purchased
Mortgage Loans subject to all Transactions exceeds the aggregate
Purchase Price for all such Transactions (a "Margin Excess"), then
Seller may by notice to Buyer require Buyer in such Transactions, to
transfer or cause to be transferred to Seller or its designee Purchased
Mortgage Loans or cash so that the cash and aggregate Collateral Value
of the Purchased Mortgage Loans, after deduction of any such Mortgage
Loans or cash so transferred, will thereupon not exceed the aggregate
Margin Amount.
(c) Seller may provide notice pursuant to subsection (b) hereof by
preparing a Request for Release of Mortgage Loans in the form of
Exhibit K to the Pooling and Servicing Agreement ("Notice of Release of
Pledge"), specifying (1) the Purchased Mortgage Loans to be released
and the requested release date, (2) the aggregate Collateral Value with
respect to such Purchased Mortgage Loans, (3) the remaining aggregate
Collateral Value after giving effect to the transfer of the Purchased
Mortgage Loans, (4) the aggregate Purchase Price of the Transactions,
and (5) a certification from the Seller that, upon release of the
Purchased Mortgage Loans, there will not be a Margin Deficit.
(d) The Seller shall transmit the Notice of Release of Pledge by
facsimile transmission to the Buyer. Upon confirming that the Notice of
Release of Pledge correctly reflects the information set forth in
Section 4(c) and that, after giving effect to the requested release the
Collateral Value would be equal to or greater than the aggregate
Purchase Price of the Transactions, the Buyer shall countersign the
Notice of Release of Pledge and transmit the countersigned Notice of
Release of Pledge to the Trustee. In the event that the Buyer's
assessment of the Collateral Value would alter the information set
forth in any Request for Release, the Buyer shall promptly notify the
Seller in writing of such assessment.
(e) Upon receipt of the countersigned Notice of Release of Pledge and
upon approval of the Notice of Release of Pledge by the Buyer, the
Trustee shall take the actions set forth in the Pooling and Servicing
Agreement with respect to the Purchased Mortgage Loan to be released.
(f) The Buyer shall not be obligated to countersign a Notice of Release
of Pledge (i) which the Buyer reasonably determines is based on
erroneous information or would result in a transfer of Purchased
Mortgage Loans other than in accordance with the terms of this
Repurchase Agreement, or (ii) which does not reflect the Buyer's
current determination of Collateral Value.
5. INCOME PAYMENTS
(a) Where a particular Transaction's term extends over an Income
payment date on the Purchased Mortgage Loans subject to that
Transaction such Income shall be the
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property of Buyer. Notwithstanding the foregoing, Buyer agrees that
until an Event of Default has occurred and is continuing and Buyer
otherwise directs, Servicer shall continue to remit Income to Seller in
accordance with the Pooling and Servicing Agreement.
(b) Notwithstanding that Buyer and Seller intend that the Transactions
hereunder be sales to Buyer of the Purchased Mortgage Loans, Seller
shall pay to Buyer the accreted value of the Price Differential (less
any amount of such Price Differential previously paid by Seller to
Buyer) (each such payment, a "Periodic Advance Repurchase Payment") on
the first Business Day of each month (each, a "Payment Date"). If
Seller fails to make all or part of the Periodic Advance Repurchase
Payment by 3:00 p.m. (New York time) on the Payment Date, Seller shall
be obligated to pay to Buyer (in addition to, and together with, the
Periodic Advance Repurchase Payment) interest on the unpaid amount of
the Periodic Advance Repurchase Payment at a rate per annum equal to
the Eurodollar Base Rate plus 2.00% (the "Late Payment Fee") until the
Periodic Advance Repurchase Payment is received in full by Buyer.
(c) Buyer shall offset against the Repurchase Price of each such
Transaction all Income and Periodic Advance Repurchase Payments
actually received by Buyer pursuant to Sections 5(a) and (b),
respectively, excluding any Late Payment Fees paid pursuant to Section
5(b).
6. SECURITY INTEREST
(a) Each of the following items or types of property, whether now owned
or hereafter acquired, now existing or hereafter created and wherever
located, is hereinafter referred to as the ("Collateral"): all Mortgage
Loans, all Underlying Obligations and all Affiliate Transfers, all
Affiliate Transfer Documents and all Mortgage Loan Documents, including
without limitation all promissory notes, all servicing records,
servicing agreements and any other collateral pledged or otherwise
relating to such Mortgage Loans, together with all files, documents,
instruments, surveys, certificates, correspondence, appraisals,
computer programs, computer storage media, accounting records and other
books and records relating thereto, all mortgage guaranties and
insurance (issued by governmental agencies or otherwise) and any
mortgage insurance certificate or other document evidencing such
mortgage guaranties or insurance relating to any Mortgage Loan and all
claims and payments thereunder, all other insurance policies and
insurance proceeds relating to any Mortgage Loan or the related
Mortgaged Property or to any Affiliate Transfer or to any Underlying
Obligation, all purchase agreements or other agreements or contracts
(other than Interest Rate Protection Agreements, which are expressly
excluded herefrom), relating to, constituting, or otherwise governing,
any or all of the foregoing to the extent they relate to the Mortgage
Loans including the right to receive principal and interest payments
with respect to the Purchased Mortgage Loans and the right to enforce
such payments, all Collection Accounts and any funds on deposit in
Collection Accounts to the extent such funds represent proceeds from
the Mortgage Loans
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(as defined in the Pooling and Servicing Agreement), if any, all
Pledged Certificates evidencing any or all of the Mortgage Loans, the
Pooling and Servicing Agreement as it relates to or constitutes any or
all of the foregoing, all "general intangibles", "accounts", and
"chattel paper" as defined in the Uniform Commercial Code relating to
or constituting any and all of the foregoing, all collateral under the
Loan Agreement, any and all replacements, substitutions, distributions
on or proceeds of any and all of the foregoing.
(b) All right, title and interest of the Seller in and to (i) the
Collateral and (ii) any and all replacements or substitutions for,
distributions on or proceeds of any of the foregoing is hereinafter
referred to as the "Seller Collateral". All right, title and interest
of the Pledgors in and to (i) the Collateral (but excluding any and all
obligations of the Pledgors thereunder) and (ii) any and all
replacements or substitutions for, distributions on or proceeds of any
of the foregoing is hereinafter referred to as the "Pledgor
Collateral".
(c) The Buyer and the Seller intend that the Transactions hereunder be
sales to the Buyer of the Purchased Mortgage Loans and not loans from
the Buyer to the Seller secured by the Purchased Mortgage Loans.
However, in order to preserve the Buyer's rights under this Repurchase
Agreement in the event that a court or other forum recharacterizes the
Transactions hereunder as loans and as security for the performance by
the Seller of all of the Seller's obligations to the Buyer hereunder
and the Transactions entered into hereunder (the "Secured
Obligations"), the Seller hereby assigns and pledges to the Buyer for
its benefit and the ratable benefit of its assignees hereunder, and
grants to the Buyer and its assignees hereunder, a security interest in
the Collateral. The assignment, pledge and grant of security interest
contained herein shall be, and the Seller hereby represents and
warrants to the Buyer that it is, a first priority security interest.
All Collateral shall secure the payment of all obligations of the
Seller now or hereafter existing under the Repurchase Agreement,
including, without limitation, Seller's obligation to repurchase
Mortgage Loans, or if such obligation is so recharacterized as a loan,
to repay such loan, for the Repurchase Price and to pay any and all
other amounts owing to the Buyer hereunder.
(d) To further secure the Secured Obligations and to induce the Buyer
to enter into Transactions with the Seller, the Pledgors hereby assign
and pledge to the Buyer for its benefit and the ratable benefit of its
assignees hereunder, and grants to the Buyer and its assignees
hereunder, a security interest in the Pledgor Collateral.
The parties hereto recognize that the Pledgors are not obligors
hereunder and are entering into this Repurchase Agreement solely for
the purpose of pledging their interest in the Pledgor Collateral to
secure the Seller's obligations hereunder and the Buyer will have no
recourse against the Pledgors (except to the extent of the Pledgor's
interest in the Pledgor Collateral) for any obligations of the Pledgors
or Seller to the Buyer. The assignment, pledge and grant of security
interest contained herein shall
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be, and the Pledgors hereby represent and warrant to the Buyer that it
is, a first priority security interest.
7. PAYMENT, TRANSFER AND CUSTODY
(a) Unless otherwise mutually agreed in writing, all transfers of funds
hereunder shall be in immediately available funds.
(b) On the Purchase Date for each Transaction, ownership of the
Purchased Mortgage Loans shall be transferred to the Buyer or its
designee (including the Trustee) against the simultaneous transfer of
the Purchase Price to an account of Seller specified in the
Confirmation. Seller, simultaneously with the delivery to the Trustee
of the Purchased Mortgage Loans relating to each Transaction hereby
sells, transfers, conveys and assigns to Buyer or its designee
(including the Trustee) without recourse, but subject to the terms of
this Repurchase Agreement, all the right, title and interest of Seller
in and to the Purchased Mortgage Loans together with all right, title
and interest in and to the proceeds of any related insurance policies.
(c) Notwithstanding anything to the contrary in this Repurchase
Agreement, including agreements to enter into a Transaction pursuant to
Section 3, Buyer shall have no obligation to purchase any Mortgage
Loans on any Purchase Date if, after such purchase:
(i) an Event of Default by the Seller will have occurred
and be continuing, or an Event of Default by the
Seller would occur with notice or the passing of
time; or
(ii) the Repurchase Date for such Transaction would be
later than the Termination Date or such other time
period prescribed in the applicable Confirmation.
(d) Pursuant to the Pooling and Servicing Agreement, the Trustee shall
hold the Mortgage Loan Documents delivered to the Trustee as exclusive
bailee and agent for the Buyer pursuant to terms of the Pooling and
Servicing Agreement and shall deliver to the Buyer Pledged
Certificates, each to the effect that it has reviewed such Mortgage
Loan Documents in the manner and to the extent required by the Pooling
and Servicing Agreement and identifying any deficiencies in such
Mortgage Loan Documents for the Mortgage Loans identified in the
Mortgage Loan Schedule and Collateral Report (in the form of Exhibit I
to the Pooling and Servicing Agreement) as so reviewed.
8. HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOANS
Title to all Purchased Mortgage Loans shall pass to Buyer and Buyer
shall have free and unrestricted use of all Purchased Mortgage Loans.
Nothing in this Repurchase Agreement shall preclude Buyer from engaging
in repurchase transactions with the Purchased Mortgage Loans or
otherwise pledging, repledging, transferring,
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hypothecating, or rehypothecating the Purchased Mortgage Loans, but no
such transaction shall relieve Buyer of its obligations to transfer
Purchased Mortgage Loans to Seller pursuant to Section 3. Nothing
contained in this Repurchase Agreement shall obligate Buyer to
segregate any Purchased Mortgage Loans delivered to Buyer by Seller.
Notwithstanding the foregoing, Buyer agrees to take such actions as are
necessary or desirable to release or cause to be released its lien and
security interest in any Purchased Mortgage Loans which are securitized
(which release shall be deemed to occur not later than simultaneously
with such securitization) and to promptly deliver or cause to be
delivered to the Seller the Mortgage File relating to any such Mortgage
Loan. Upon repurchase of the Purchased Mortgage Loans or payment in
full of the Secured Obligations, Buyer shall take such actions as are
necessary to release or cause to be released its lien and security
interest in the Collateral and to cause all Mortgage Files with respect
to such repurchased Purchased Mortgage Loans to be returned to the
Seller.
9. INDEMNIFICATION AND EXPENSES
(a) The Seller agrees to hold the Buyer harmless from and indemnify the
Buyer against all liabilities, losses, damages, judgments, costs and
expenses of any kind which may be imposed on, incurred by or asserted
against the Buyer (collectively, "Costs"), relating to or arising out
of this Repurchase Agreement, any other Repurchase Document or any
transaction contemplated hereby or thereby, or any amendment,
supplement or modification of, or any waiver or consent under or in
respect of, this Repurchase Agreement, any other Repurchase Document or
any transaction contemplated hereby or thereby, that, in each case,
results from anything other than the Buyer's gross negligence or
willful misconduct. In any suit, proceeding or action brought by the
Buyer in connection with any Mortgage Loan for any sum owing
thereunder, or to enforce any provisions of any Mortgage Loan, the
Seller will save, indemnify and hold the Buyer harmless from and
against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction or liability whatsoever
of the account debtor or obligor thereunder, arising out of a breach by
the Seller or the Guarantor of any obligation thereunder or arising out
of any other agreement, indebtedness or liability at any time owing to
or in favor of such account debtor or obligor or its successors from
the Seller or the Guarantor. The Seller also agrees to reimburse the
Buyer as and when billed by the Buyer for all the Buyer's costs and
expenses incurred in connection with the enforcement or the
preservation of the Buyer's rights under this Repurchase Agreement, any
other Repurchase Document or any transaction contemplated hereby or
thereby, including without limitation the reasonable fees and
disbursements of its counsel.
(b) The Seller agrees to pay as and when billed by the Buyer all of the
out-of-pocket costs and expenses incurred by the Buyer in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Repurchase Agreement, any other
Repurchase Document or any other documents prepared in connection
herewith or therewith. The Seller agrees to pay as and when
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billed by the Buyer all of the out-of-pocket costs and expenses
incurred in connection with the consummation and administration of the
transactions contemplated hereby and thereby including without
limitation all the reasonable fees, disbursements and expenses of
counsel to the Buyer which amount shall be deducted from the Purchase
Price paid for the first Transaction hereunder. Subject to the
limitations set forth in Section 27 hereof, the Seller agrees to pay
the Buyer all the due diligence, inspection, testing and review costs
and expenses incurred by the Buyer with respect to Mortgage Loans
submitted by Seller for purchase under this Repurchase Agreement,
including, but not limited to, those costs and expenses incurred by the
Buyer pursuant to Sections 9(a), 24 and 27 hereof.
10. REPRESENTATIONS
(a) The Buyer represents and warrants to the Seller that as of the
Purchase Date for the purchase of any Purchased Mortgage Loans by the
Buyer from the Seller and as of the date of this Repurchase Agreement
and any Transaction hereunder and at all times while the Repurchase
Documents and any Transaction hereunder is in full force and effect:
(i) Acting as Principal. The Buyer will engage in such
Transactions as principal (or, if agreed in writing
in advance of any Transaction by the other party
hereto, as agent for a disclosed principal);
(ii) Due Authorization. The Buyer is duly authorized to
execute and deliver this Repurchase Agreement, to
enter into the Transactions contemplated hereunder
and to perform its obligations hereunder and has
taken all necessary action to authorize such
execution, delivery and performance. The person
signing this Repurchase Agreement on behalf of the
Buyer is duly authorized to do so on the Buyer's
behalf (or on behalf of any such disclosed
principal). The Buyer has received approval and
authorization to enter into this Repurchase Agreement
and each and every Transaction actually entered into
hereunder pursuant to its internal policies and
procedures;
(iii) No Consent Required. No approval, consent or
authorization of the Transactions contemplated by
this Repurchase Agreement from any federal, state, or
local regulatory authority having jurisdiction over
the Buyer is required or, if required, such approval,
consent or authorization has been or will, prior to
the Purchase Date, be obtained;
(iv) No Conflicts. The execution, delivery, and
performance of this Repurchase Agreement and the
Transactions hereunder will not violate any law,
regulation, order, judgment, decree, ordinance,
charter, by-law, or rule applicable to the Buyer or
its property or constitute a
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default (or an event which, with notice or lapse of
time, or both would constitute a default) under or
result in a breach of any agreement or other
instrument by which it is bound or by which any of
its assets are affected; and
(v) Solvency. Neither this Repurchase Agreement nor any
Transaction pursuant hereto are entered into in
contemplation of insolvency or with intent to hinder,
delay or defraud any creditor.
(b) The Seller (and the Pledgors, as applicable) represents and
warrants to the Buyer that as of the Purchase Date for the purchase of
any Purchased Mortgage Loans by the Buyer from the Seller and as of the
date of this Repurchase Agreement and any Transaction hereunder and at
all times while the Transaction Documents and any Transaction or Loan
thereunder is in full force and effect:
(i) Acting as Principal. The Seller will engage in such
Transactions as principal (or, if agreed in writing
in advance of any Transaction by the other party
hereto, as agent for a disclosed principal);
(ii) Solvency. Neither the Repurchase Documents nor any
Transaction pursuant thereunder, or any Affiliate
Transfer or Affiliate Transfer Documents are entered
into in contemplation of insolvency or with intent to
hinder, delay or defraud any creditor. Seller and
Pledgors are not, and with the passage of time do not
expect to become, insolvent;
(iii) No Broker. The Seller has not dealt with any broker,
investment banker, agent, or other person, except for
the Buyer, who may be entitled to any commission or
compensation in connection with the sale of Purchased
Mortgage Loans pursuant to this Repurchase Agreement;
(iv) Ability to Perform. Seller and Guarantor do not
believe, nor do they have any reason or cause to
believe, that they cannot perform each and every
covenant contained in the Repurchase Documents to
which they are a party on their part to be performed;
(v) No Defaults. No Event of Default has occurred and is
continuing hereunder;
(vi) Existence Each Repurchase Agreement Party (a) is a
legal entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of
its organization, (b) has all requisite corporate or
other power, and has all governmental licenses,
authorizations, consents and approvals necessary to
own its assets and carry on its business as now being
or as proposed to be conducted, except where the lack
of such licenses, authorizations, consents and
approvals would not be reasonably likely to have a
material adverse effect on its Property, business or
financial condition taken as a whole; and (c) is
qualified to do business and is in good standing in
all other jurisdictions in which the nature of
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the business conducted by it makes such qualification
necessary, except where failure so to qualify would
not be reasonably likely (either individually or in
the aggregate) to have a material adverse effect on
its Property, business or financial condition taken
as a whole.
(vii) Financial Condition. The Guarantor has heretofore
furnished to the Buyer a copy of (a) its consolidated
balance sheet and the consolidated balance sheets of
their consolidated Subsidiaries for the fiscal year
ended December 31, 1997, and the related consolidated
statements of income and retained earnings and of
cash flows for the Guarantor and its consolidated
Subsidiaries for such fiscal year, with the opinion
thereon of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. All such financial
statements are complete and correct and fairly
present, in all material respects, the consolidated
financial condition of the Guarantor and its
Subsidiaries and the consolidated results of their
operations as at such dates and for such fiscal
periods, all in accordance with GAAP applied on a
consistent basis except, in the case of interim
financial statements, for the absence of footnotes
and subject to year-end adjustments. Since March 31,
1998, there has been no material adverse change in
the consolidated business, operations or financial
condition of the Guarantor and its consolidated
Subsidiaries taken as a whole from that set forth in
said financial statements.
(viii) Litigation. Except as (1) previously disclosed to
Buyer prior to the date of this Repurchase Agreement
or (2) disclosed and approved in writing by the
Buyer, there are no actions, suits, arbitrations,
investigations or proceedings pending or, to the
Seller's knowledge, threatened against the Seller or
the Guarantor or any of their Subsidiaries or
affecting any of the Property of any of them before
any Governmental Authority (i) as to which
individually or in the aggregate there is a
reasonable likelihood of an adverse decision which
would be reasonably likely to have a material adverse
effect on the Property, business or financial
condition of the Seller or the Guarantor, or (ii)
which questions the validity or enforceability of any
of the Repurchase Documents or any action to be taken
in connection with the Transactions contemplated
hereby.
(ix) No Breach. Neither (a) the execution and delivery of
the Repurchase Documents nor (b) the consummation of
the transactions therein contemplated in compliance
with the terms and provisions thereof will conflict
with or result in a breach of the charter or by-laws
of the Repurchase Agreement Parties, or any
applicable law, rule or regulation, or any order,
writ, injunction or decree of any Governmental
Authority, or any Servicing Agreement or other
material agreement or instrument to which the
Repurchase Agreement Parties or any of their
Subsidiaries is a party or by which any of them or
any of their Property is bound or
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to which any of them is subject, or constitute a
default under any such material agreement or
instrument which breach or conflict will have a
Material Adverse Effect or result in the creation or
imposition of any Lien (except for the Liens created
pursuant to the Transaction Documents) upon any
Property of the Seller or Guarantor, or any of their
Subsidiaries pursuant to the terms of any such
agreement or instrument.
(x) Action. Each Repurchase Agreement Party has all
necessary corporate or other power, authority and
legal right to execute, deliver and perform its
obligations under each of the Repurchase Documents,
as applicable; the execution, delivery and
performance by the Repurchase Agreement Parties, as
applicable, of each of the Repurchase Documents have
been duly authorized by all necessary corporate or
other action on its part; and each Repurchase
Document has been duly and validly executed and
delivered by the Repurchase Agreement Party, as
applicable, and constitutes a legal, valid and
binding obligation of the Repurchase Agreement
Parties, as applicable, enforceable against such
Repurchase Agreement Party in accordance with its
terms except as may be limited by applicable
bankruptcy, moratorium or other laws affecting
creditors' rights generally and by general principles
of equity.
(xi) Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any
Governmental Authority or any securities exchange are
necessary for the execution, delivery or performance
by the Repurchase Agreement Parties of the Repurchase
Documents or for the legality, validity or
enforceability thereof, except for filings and
recordings in respect of the Liens created pursuant
to the Repurchase Documents.
(xii) Margin Regulations. Neither any Transaction
hereunder, nor the use of the proceeds thereof, will
violate or be inconsistent with the provisions of
Regulation G, T, U or X.
(xiii) Taxes. The Guarantor has filed all Federal income tax
returns and all other material tax returns that are
required to be filed by them, which tax returns
represent all Federal income tax returns and all
other material tax returns that are required to be
filed by the Guarantor, and have paid all taxes due
pursuant to such returns or pursuant to any
assessment received by them or any of its
Subsidiaries, except for any such taxes as are being
appropriately contested in good faith by appropriate
proceedings diligently conducted and with respect to
which adequate reserves have been provided. The
charges, accruals and reserves on the books of the
Guarantor and its Subsidiaries in respect of taxes
and other governmental charges are, in the opinion of
the Guarantor, adequate.
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(xiv) Investment Company Act. Each of the Seller, the
Guarantor or each Subsidiary thereof is not an
"investment company", or a company "controlled" by an
"investment company," within the meaning of the
Investment Company Act of 1940, as amended.
(xv) Collateral; Collateral Security
(a) The Seller and Pledgors have not assigned,
pledged, or otherwise conveyed or encumbered any
Pledged Certificate or Mortgage Loan to any other
Person, and immediately prior to the pledge of such
Pledged Certificate or Mortgage Loan to the Buyer,
the Seller and the Pledgors, if applicable, were the
sole owner of such Pledged Certificate or Mortgage
Loan and had good and marketable title thereto, free
and clear of all Liens (other than the interest of
the Trustee pursuant to the Pooling and Servicing
Agreement), in each case except for Liens to be
released simultaneously with the Liens granted in
favor of the Buyer hereunder. No Pledged Certificate
or Mortgage Loan pledged to the Buyer hereunder was
acquired by the Seller from an Affiliate of the
Seller (other than from a Pledgor).
(b) The provisions of this Repurchase Agreement are
effective to create in favor of the Buyer a valid
security interest in all right, title and interest of
each Pledgor and the Seller in, to and under the
Collateral.
(c) Upon receipt by (i) the Buyer of each Pledged
Certificate issued in Buyer's name and (ii) the
Trustee of each Mortgage Note, endorsed as prescribed
in the Pooling and Servicing Agreement by a duly
authorized officer of the Seller, and the related
Pledge Notice (as defined in the Pooling and
Servicing Agreement) the Buyer shall have a fully
perfected first priority security interest in the
applicable Pledged Certificate, and in the related
Mortgage Note and in such Seller's interest in the
related Mortgaged Property.
(d) The Form UCC-1 filing statements, previously
filed on the dates indicated in Schedule 2 of Exhibit
C attached hereto, naming the Buyer as "Secured
Party", the Seller as "Debtor" and describing the
Collateral, filed in the jurisdictions and recording
offices listed on Schedule 2 of Exhibit C attached
hereto, have fully perfected the security interests
granted hereunder in the Collateral to the extent
such security interests can be perfected by the
filing of such Form UCC-1 filing statements, as of
the date of their filing, under the Uniform
Commercial Code in all right, title and interest of
the Seller in, to and under such Collateral, which
security interests continue to be perfected thereto.
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(xvi) Chief Executive Office. The Seller's chief executive
office on the Effective Date is located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The chief
executive offices of Guarantor and the Pledgors
(except for Advanta Finance Corp.) are located at
Welsh & ▇▇▇▇▇▇ Roads, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The chief executive office of
Advanta Finance Corp. is located at ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(xvii) Location of Books and Records. The location where the
Seller and the Pledgors keeps their books and records
is their chief executive offices. All servicing
records, including all computer tapes and records,
are kept at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(xviii) Hedging. The Seller or the Guarantor have entered
into Interest Rate Protection Agreements, having a
notional amount not less than 70% of the aggregate
unpaid principal amount of the fixed-rate Mortgage
Loans.
(xix) True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of the Seller
and the Guarantor to the Buyer in connection with the
negotiation, preparation or delivery of the
Transaction Documents or included herein or therein
or delivered pursuant hereto or thereto, when taken
as a whole, do not contain any untrue statement of
material fact or omit to state any material fact
necessary to make the statements herein or therein,
in light of the circumstances under which they were
made, not misleading. All written information
furnished after the date hereof by or on behalf of
each of the Seller and the Guarantor to the Buyer in
connection with this Repurchase Agreement and the
other Repurchase Documents and the transactions
contemplated hereby and thereby will not contain any
untrue statement of a material fact or omit to state
a material fact necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading, or (in the case of
projections) based on reasonable estimates, on the
date as of which such information is stated or
certified.
(xx) ERISA. Each Plan to which the Seller, the Guarantor
or any of their Subsidiaries make direct
contributions, and, to the knowledge of the Seller,
each other Plan and each Multiemployer Plan, is in
compliance in all material respects with, and has
been administered in all material respects in
compliance with, the applicable provisions of ERISA,
the Code and any other Federal or State law. To the
Seller's knowledge, no event or condition has
occurred and is continuing as to which the Seller or
the Guarantor would be under an obligation to furnish
a report to the Buyer under Section 11(i)(e) hereof.
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(xxi) Pledged Certificates. The Seller represents and
warrants to the Buyer with respect to each Pledged
Certificate, that (a) such Pledged Certificate is
registered in the name of the Buyer, (b) immediately
prior to the transfer to the Buyer of the interest
represented by such Pledged Certificate, such
interest is owned by the Seller free from all liens
and encumbrances, (c) prior to or concurrently with
such transfer to the Buyer of the interest
represented by such Pledged Certificate shall have
been issued in the name of and delivered to the
Buyer, (d) such Pledged Certificate represents a 100%
ownership interest in the Eligible Mortgage Loans
referenced therein, (e) the Eligible Mortgage Loans
referenced in such Pledged Certificate are being held
by the Trustee for the benefit of the holder of such
Pledged Certificate, (f) the Seller has notified the
Trustee or other registrar issuing such Pledged
Certificate that Buyer is the holder of such Pledged
Certificate for all purposes and (g) all
representations and warranties set forth in Part II
of Exhibit II are true and correct.
(xxii) Insured Depository Institution Representations The
Seller is an Insured Depository Institution and
accordingly, the Seller makes the following
additional representations and warranties:
(a) The Repurchase Documents do not violate any
statutory or regulatory requirements applicable to
the Seller;
(b) The Repurchase Documents have been (1) executed
contemporaneously with the definitive agreement
reached by the Buyer and the Seller, (2) approved by
a specific resolution by the Seller board of
directors, which approval shall be reflected in the
minutes of said board, and (3) entered into the
official records of the Seller, a copy of which
approvals, certified by a vice president or higher
officer of the Seller, has been provided to Buyer;
(c) The aggregate amount of the Purchase Price of the
Transactions, after giving effect to any Transactions
being made on the date hereof, between the Buyer and
the Seller does not exceed any restrictions or
limitations imposed by the board of directors of the
Seller.
(d) The Seller is Well Capitalized or Adequately
Capitalized.
(xxiii) Pledgors. The Pledgors' obligations under this
Repurchase Agreement are necessary or convenient to
the conduct, promotion or attainment of the Pledgors'
and the Seller's business, and the consideration
contemplated by this Repurchase Agreement is fair and
sufficient to support the agreements of, and pledges,
liens, mortgages and other security interests,
assignments and encumbrances granted by the Pledgors
to the Buyer hereunder.
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(xxiv) Individual Mortgage Loan Representations. Each
Mortgage Loan sold hereunder, as of the related
Purchase Date, conforms to the representations and
warranties set forth in Exhibit II attached hereto
(except as otherwise permitted by the sublimits set
forth in the definition of Collateral Value) and such
additional representations and warranties provided in
the Confirmation, if any, and each Mortgage Loan
delivered hereunder as Additional Purchased Loans, as
of the date of such delivery, conforms to the
representations and warranties set forth in Exhibit
II hereto (except as otherwise permitted by the
sublimits set forth in the definition of Collateral
Value) and the Confirmation, if any. It is understood
and agreed that the representations and warranties
set forth in Exhibit II hereto and the Confirmation,
if any, shall survive delivery of the respective
Mortgage File to Buyer or its designee (including the
Trustee).
11. COVENANTS OF THE SELLER
On and as of the date of this Repurchase Agreement and each Purchase
Date and until this Repurchase Agreement is no longer in force with
respect to any Transaction, the Seller covenants that it will:
(i) Financial Statements. The Seller shall deliver to the
Buyer:
(a) as soon as available and in any event within 60
days after the end of each of the first three
quarterly fiscal periods of each fiscal year of
Guarantor, the unaudited consolidated balance sheets
of Guarantor and its consolidated Subsidiaries as at
the end of such period and the related unaudited
consolidated statements of income and retained
earnings and of cash flows of Guarantor and its
consolidated Subsidiaries for such period and the
portion of the fiscal year through the end of such
period, accompanied by a certificate of a Responsible
Officer of Guarantor, which certificate shall state
that said consolidated financial statements fairly
present in all material respects the consolidated
financial condition and results of operations of
Guarantor and its consolidated Subsidiaries in
accordance with GAAP, consistently applied, as at the
end of, and for, such period (except for the absence
of footnotes thereto and subject to normal year-end
audit adjustments);
(b) as soon as available and in any event within 95
days after the end of each fiscal year of Guarantor,
the consolidated balance sheets of Guarantor and its
respective consolidated Subsidiaries as at the end of
such fiscal year and the related consolidated
statements of income and retained earnings and of
cash flows for Guarantor and its consolidated
Subsidiaries for such year, setting forth in each
case in comparative form the figures for the previous
year, accompanied by an opinion thereon of
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independent certified public accountants of
recognized national standing, which opinion shall not
be qualified as to scope of audit or going concern
and shall state that said consolidated financial
statements fairly present the consolidated financial
condition and results of operations of Guarantor and
its respective consolidated Subsidiaries as at the
end of, and for, such fiscal year in accordance with
GAAP, and a certificate of such accountants stating
that, in making the examination necessary for their
opinion, they obtained no knowledge, except as
specifically stated, of any Default or Event of
Default;
(c) promptly after filing its regulatory call report
(or equivalent report) with the Appropriate Federal
Banking Agency or with any applicable state bank
regulatory agency, a copy of such report together
with an analysis of the Seller's capital ratios
demonstrating that it is Well Capitalized or
Adequately Capitalized.
(d) from time to time such other information
regarding the financial condition, operations, or
business of the Seller and the Guarantor as the Buyer
may reasonably request; and
(e) as soon as reasonably possible, and in any event
within thirty (30) days after a Responsible Officer
of the Guarantor knows, or with respect to any Plan
or Multiemployer Plan to which the Guarantor or any
of its Subsidiaries makes direct contributions, has
reason to believe, that any of the events or
conditions specified below with respect to any Plan
or Multiemployer Plan has occurred or exists, a
statement signed by a senior financial officer of the
Guarantor setting forth details respecting such event
or condition and the action, if any, that the
Guarantor or its ERISA Affiliate proposes to take
with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by
the Guarantor or an ERISA Affiliate with respect to
such event or condition):
(i) any reportable event, as defined in
Section 4043(c) of ERISA and the regulations
issued thereunder, with respect to a Plan,
as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of
ERISA that it be notified within thirty (30)
days of the occurrence of such event
(provided that a failure to meet the minimum
funding standard of Section 412 of the Code
or Section 302 of ERISA, including without
limitation the failure to make on or before
its due date a required installment under
Section 412(m) of the Code or Section 302(e)
of ERISA, shall be a reportable event
regardless of the issuance of any waivers in
accordance with Section 412(d) of the Code);
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and any request for a waiver under Section
412(d) of the Code for any Plan;
(ii) the distribution under Section 4041(c)
of ERISA of a notice of intent to terminate
any Plan or any action taken by the
Guarantor or an ERISA Affiliate to terminate
any Plan;
(iii) the institution by PBGC of proceedings
under Section 4042 of ERISA for the
termination of, or the appointment of a
trustee to administer, any Plan, or the
receipt by the Guarantor or any ERISA
Affiliate of a notice from a Multiemployer
Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from
a Multiemployer Plan by the Guarantor or any
ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA
(including the obligation to satisfy
secondary liability as a result of a
purchaser default) that would have a
Material Adverse Effect or the receipt by
the Guarantor or any ERISA Affiliate of
notice from a Multiemployer Plan that it is
in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it
intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against
the Guarantor or any ERISA Affiliate to
enforce Section 515 of ERISA, which
proceeding is not dismissed within 30 days;
and
(vi) the adoption of an amendment to any
Plan that, pursuant to Section 401(a)(29) of
the Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of
the trust of which such Plan is a part if
the Guarantor or an ERISA Affiliate fails to
provide timely security to such Plan in
accordance with the provisions of said
Sections.
Each of the Seller and the Guarantor will furnish to
the Buyer, at the time the Guarantor furnishes each
set of financial statements pursuant to paragraphs
(a) and (b) above, a certificate of a Responsible
Officer of the Seller and the Guarantor to the effect
that, to the best of such Responsible Officer's
knowledge, the Seller and the Guarantor during such
fiscal period or year has observed or performed in
all material respects all of its covenants and other
agreements, and satisfied every condition, contained
in this Repurchase Agreement and the other
Transaction Documents to be observed, performed or
satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default
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or Event of Default except as specified in such
certificate (and, if any Default or Event of Default
has occurred and is continuing, describing the same
in reasonable detail and describing the action the
Seller or Guarantor has taken or proposes to take
with respect thereto).
(ii) Litigation. The Seller and the Guarantor will
promptly, and in any event within 10 days after
service of process on any of the following, give to
the Buyer notice of all legal or arbitrable
proceedings affecting the Seller or the Guarantor or
any of their Subsidiaries that questions or
challenges the validity or enforceability of any of
the Repurchase Documents or as to which there is a
reasonable likelihood of adverse determination which
would result in a Material Adverse Effect.
(iii) Existence, etc Each Repurchase Agreement Party will:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and
franchises necessary for the operation of its
business (provided that nothing in this Section
11(iii)(a) shall prohibit any transaction expressly
permitted under Section 11(iv) hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of Governmental
Authorities (including, without limitation, all
environmental laws) if failure to comply with such
requirements would be reasonably likely (either
individually or in the aggregate) to have a material
adverse effect on its Property, business or financial
condition;
(c) keep adequate records and books of account, in
which complete entries will be made in accordance
with GAAP consistently applied;
(d) not move its chief executive office from the
address referred to in Section 10(xvii) unless it
shall have provided the Buyer 30 days' prior written
notice of such change;
(e) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on
its income or profits or on any of its Property prior
to the date on which penalties attach thereto, except
for any such tax, assessment, charge or levy the
payment of which is being contested in good faith and
by proper proceedings and against which adequate
reserves are being maintained; and
(f) permit representatives of the Buyer, during
normal business hours, to examine, copy and make
extracts from its books and records, to inspect any
of its Properties, and to discuss its business and
affairs with its officers, all to the extent
reasonably requested by the Buyer.
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(iv) Prohibition of Fundamental Changes. Other than the
asset sales completed and disclosed to the Buyer
prior to the date of this Repurchase Agreement,
neither the Seller nor the Guarantor shall engage in
any Restricted Transaction while there is any
Transaction outstanding or other amount owing under
the Repurchase Agreement; provided, that the Seller
or the Guarantor may merge or consolidate with (a)
any wholly owned direct or indirect subsidiary of
Advanta Corp., or (b) any other Person if the Seller
or the Guarantor is the surviving corporation; and
provided further, that if after giving effect
thereto, no Default or Event of Default would exist
under any Repurchase Document. If either of the
Seller or the Guarantor has entered into a Restricted
Transaction when there was no amount outstanding
under the Repurchase Documents, the Seller must give
the Buyer notice and such details as the Buyer may
request about the Restricted Transaction(s) at least
ten (10) days prior to any Request for Purchase. The
Buyer may, in its sole discretion, cancel its
commitment to purchase and sell Mortgage Loans
hereunder and terminate this Repurchase Agreement and
the other Repurchase Documents without liability,
based on its assessment of the effect of such
Restricted Transaction(s).
(v) Margin Deficit. If at any time there exists a Margin
Deficit the Seller shall cure same in accordance with
Section 4 hereof.
(vi) Notices. The Seller shall give notice to the Buyer:
(a) promptly upon receipt of notice or knowledge of
the occurrence of any Default or Event of Default;
(b) with respect to any Purchased Mortgage Loan
hereunder, on a monthly basis, upon receipt of any
principal prepayment (in full or partial) of such
Purchased Mortgage Loan;
(c) with respect to any Purchased Mortgage Loan
hereunder, on a monthly basis, promptly upon receipt
of notice or knowledge that the underlying Mortgaged
Property has been damaged by waste, fire, earthquake
or earth movement, flood, tornado or other casualty,
or otherwise damaged so as to affect adversely the
Collateral Value of such pledged Mortgage Loan; and
(d) promptly upon receipt of notice or knowledge of
(i) any default related to any Collateral, (ii) any
Lien or security interest (other than security
interests created hereby or by the other Loan
Documents) on, or claim asserted against, any of the
Collateral or (iii) any event or change in
circumstances which could reasonably be expected to
have a material adverse effect on the Property,
business or financial condition of Seller or
Guarantor.
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Each notice pursuant to this Section shall be
accompanied by a statement of a Responsible Officer
of the Seller setting forth details of the occurrence
referred to therein and stating what action the
Repurchase Agreement Party has taken or proposes to
take with respect thereto.
(vii) Hedging. The Seller or the Guarantor shall at all
times maintain Interest Rate Protection Agreements,
having a notional amount not less than 70% of the
aggregate outstanding principal balance of all
fixed-rate Mortgage Loans.
(viii) Reports. The Seller shall provide the Buyer with a
quarterly report, which report shall include, among
other items, a summary of such Seller's delinquency
and loss experience with respect to Mortgage Loans
serviced by the Seller, any Servicer or any designee
of either, plus any such additional reports as the
Buyer may reasonably request with respect to the
Seller or any Servicer's servicing portfolio or
pending origination's of Mortgage Loans.
(ix) Underwriting Guidelines. Without the prior written
notice to the Buyer, the Seller shall not amend or
otherwise modify the Underwriting Guidelines in a
manner that materially and adversely affects the
value of the Purchased Mortgage Loans or the
Collateral.
(x) Transactions with Affiliates. Each of the Seller and
the Guarantor shall not (i) enter into any
transaction, including without limitation any
purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate unless
such transaction is (a) not prohibited under the
Repurchase Documents, (b) upon fair and reasonable
terms no less favorable to the Seller or the
Guarantor than it would obtain in a comparable arm's
length transaction with a Person which is not an
Affiliate, and, (c) is consistent with regulatory
requirements; provided, however, that nothing
contained herein shall prohibit the Seller or the
Guarantor from making a capital contribution of
Mortgage Loans to any other Transaction Party
provided that such capital contribution is made
subject to the Buyer's Lien on any such Mortgage
Loans (under any Transaction Document) that are the
subject of such capital contribution. In no event
shall the Seller transfer to the Buyer hereunder any
Mortgage Loan acquired by the Seller from an
Affiliate of the Seller, other than from a Pledgor.
(xi) Limitation on Liens. The Seller and each Pledgor, as
applicable, will (a) defend the Collateral against,
and will take such other action as is necessary to
remove, any Lien, security interest or claim on or to
the Collateral, other than the security interests
created under this Repurchase Agreement and Liens for
taxes and similar charges and assessments that
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are not yet due and payable or which are being
contested in good faith by appropriate proceedings,
and the Seller and each Pledgor, as applicable, will
defend the right, title and interest of the Buyer in
and to any of the Collateral against the claims and
demands of all persons whomsoever, (b) not take any
action that would directly or indirectly impair or
adversely affect the Buyer's title to or the value of
the Purchased Mortgage Loans, or (c) not pledge,
assign, convey, grant, bargain, sell, set over,
deliver or otherwise transfer any interest in the
Purchased Mortgage Loans to any person not a party to
this Repurchase Agreement nor create, incur or permit
to exist any lien, encumbrance or security interest
in or on the Purchased Mortgage Loans except as
described in Section 6 of this Repurchase Agreement;
(xii) Servicing Tape. The Seller shall prepare, as of the
15th calendar day (or if such 15th day is not a
Business Day, the Business Day immediately preceding
such 15th day) of each month (the "Servicing Cut-Off
Date"), a computer readable magnetic tape containing
servicing information, including without limitation
those fields reasonably requested by the Buyer from
time to time, on a loan-by-loan basis, with respect
to the Mortgage Loans serviced hereunder by the
Seller or any Servicer (the "Servicing Tape"). The
Seller shall deliver the Servicing Tape to the Buyer
within 2 Business Days after the Servicing Cut-off
Date.
(xiii) Pooling and Servicing Agreement. The parties to the
Pooling and Servicing Agreement shall maintain such
Pooling and Servicing Agreement in full force and
effect and shall not amend or modify the Pooling and
Servicing Agreement or waive compliance with any
provisions thereunder without the prior written
consent of the Buyer.
(xiv) Insured Depository Institution Covenants The Seller
is an Insured Depository Institution and accordingly,
the Seller makes the following additional covenants:
(a) The Seller will continuously maintain all of the
Transaction Documents, from the time of their
execution, as official records of the Seller;
(b) The Seller will maintain a record of each
Transaction and the total amount of Transactions
outstanding hereunder in its official books and
records and shall make same available for Buyer's
inspection and copying on one Business Day's notice;
(c) The aggregate amount of the Transactions
outstanding and the aggregate principal amount of
similar transactions and loans outstanding under
other agreement as of any date between the Buyer and
the Seller
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shall not exceed any restrictions or limitations
imposed by the board of directors of the Seller or
its Appropriate Federal Banking Agency; and
(d) The Seller shall be Well Capitalized or
Adequately Capitalized at the time of each request
for a borrowing hereunder and shall maintain its
status as Well Capitalized or Adequately Capitalized
at all times that a Transaction is outstanding under
this Repurchase Agreement.
(xv) The Seller shall cause each Mortgage Loan subject to
this Repurchase Agreement to be serviced in
conformity with the requirements set forth in the
Pooling and Servicing Agreement.
12. EVENTS OF DEFAULT
(a) If any of the following events (each an "Event of Default") occur
(except if such event involves a Pledgor from which the Seller has not
acquired any Mortgage Loans subject to Transactions hereunder at the
time of such event), the Seller and Buyer shall have the rights set
forth in Section 13, as applicable:
(i) the Seller shall default in the payment of any
principal of or interest under any Repurchase
Documents or default in the payment of any Repurchase
Price due or any amount due under Section 5 hereof
when due (whether at stated maturity, upon
acceleration or at mandatory or optional prepayment);
or
(ii) the Seller shall default in the payment of any other
amount payable by it hereunder or under any other
Repurchase Document after notification by the Buyer
of such default, and such default shall have
continued unremedied for five Business Days; or
(iii) any representation, warranty or certification made or
deemed made herein or in any other Repurchase
Document by the Seller or Guarantor or any
certificate furnished to the Buyer pursuant to the
provisions hereof or thereof shall prove to have been
false or misleading in any material respect as of the
time made or furnished (other than the
representations and warranties set forth in Exhibit
II, which shall be considered solely for the purpose
of determining the Collateral Value of the Mortgage
Loans; unless the Seller shall have made any such
representations and warranties with knowledge that
they were materially false or misleading at the time
made); or
(iv) the Seller or Guarantor shall fail to comply with the
requirements of any of Section 11(iii)(a), Section
11(iv), Section 11(vi)(a), or Sections 11(xi) through
11(xv) hereof; or the Seller or Guarantor shall
default in the performance of any of its obligations
under Section 11(v) hereof and such default shall
continue unremedied for a period of one (1) Business
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Day; or the Seller or Guarantor shall otherwise fail
to comply with any of the requirements of Section
11(iii)(b) through (f), 11(vi)(b) through (d),
11(ix), 11(x), 11(xiii) hereof and such default shall
continue unremedied for a period of five Business
Days; or the Seller or Guarantor shall fail to
observe or perform any other covenant or agreement
contained in this Repurchase Agreement or any other
Transaction Document and such failure to observe or
perform shall continue unremedied for a period of
seven Business Days; or
(v) a final judgment or judgments for the payment of
money in excess of $10,000,000 in the aggregate shall
be rendered against the Seller, the Guarantor or any
of their respective Affiliates by one or more courts,
administrative tribunals or other bodies having
jurisdiction and the same shall not be discharged (or
provision shall not be made for such discharge) or
bonded, or a stay of execution thereof shall not be
procured, within 60 days from the date of entry
thereof, and the Seller, the Guarantor or any such
Affiliate shall not, within said period of 60 days,
or such longer period during which execution of the
same shall have been stayed or bonded, appeal
therefrom and cause the execution thereof to be
stayed during such appeal; or
(vi) the Seller or the Guarantor shall admit in writing
its inability to pay its debts as such debts become
due; or
(vii) the Seller, the Guarantor, or any of their respective
Affiliates shall (i) apply for or consent to the
appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator
or the like of itself or of all or a substantial part
of its property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a
petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up,
or composition or readjustment of debts, (v) fail to
controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against
it in an involuntary case under the Bankruptcy Code
or the FDIC Act, or (vi) take any corporate or other
action for the purpose of effecting any of the
foregoing; or
(viii) a proceeding or case shall be commenced, without the
application or consent of any of the Seller, the
Guarantor, or any of their Affiliates in any court of
competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement
or winding-up, or the composition or readjustment of
its debts, (ii) the appointment of, or the taking of
possession by, a receiver, custodian, trustee,
examiner, liquidator or the like of any of the
Seller, the Guarantor or any of their Affiliates or
of all
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or any substantial part of its property, or (iii)
similar relief in respect of any of the Seller, the
Guarantor, or any Affiliate under any law relating to
bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or
composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an
order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more
days; or an order for relief against any of the
Seller, the Guarantor or any Affiliate shall be
entered in an involuntary case under the Bankruptcy
Code; or
(ix) the Pooling and Servicing Agreement or any Repurchase
Document shall for whatever reason be terminated or
cease to be in full force and effect, or the
enforceability thereof shall be contested by the
Seller; or
(x) the Seller or any Pledgor shall grant, or suffer to
exist, any Lien on any Collateral except the Liens
contemplated hereby; or the Liens contemplated hereby
shall cease to be first priority perfected Liens on
any Collateral in favor of the Buyer or shall be
Liens in favor of any Person other than the Buyer; or
(xi) the Buyer determines that the number of Misclassified
Mortgage Loans equals at least 5% of the Mortgage
Loans reviewed pursuant to a Due Diligence Review of
Purchased Mortgage Loans on any three consecutive
Purchase Dates; or
(xii) there is a material default, breach, violation or
event of default under the Pooling and Servicing
Agreement or the Seller has waived any such material
default, breach, violation or event of default
thereunder; or
(xiii) any material adverse change in the Property, business
or financial condition of the Repurchase Agreement
Parties taken as a whole shall occur, which,
constitutes a material impairment of the ability of
any Repurchase Agreement Party's ability to perform
its obligations under any Repurchase Document as
determined by the Buyer in its sole good faith
discretion; or
(xiv) the Buyer determines, after receipt of notice
provided pursuant to Section 11(iv), that it wishes
to cancel its commitment to lend hereunder and
terminate this Repurchase Agreement; or
(xv) the Seller shall become the subject of a cease and
desist order of the Appropriate Federal Banking
Agency or enter into a memorandum of understanding or
consent agreement with the Appropriate Federal
Banking Agency, any of which, would have, or is
purportedly the result of any condition which would
have, a Material Adverse Effect; or
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(xvi) there shall be an "Event of Default" under the Loan
Agreement (unless such cross-default is prohibited or
limited by applicable federal banking law).
13. REMEDIES
(a) If an Event of Default occurs with respect to the Seller, the
following rights and remedies are available to the Buyer:
(i) At the option of the Buyer, exercised by written
notice to the Seller (which option shall be deemed to
have been exercised, even if no notice is given,
immediately upon the occurrence of an Act of
Insolvency), the Repurchase Date for each Transaction
hereunder shall be deemed immediately to occur.
(ii) If the Buyer exercises or is deemed to have exercised
the option referred to in subsection (a)(i) of this
Section,
(A) the Seller's obligations hereunder to
repurchase all Purchased Mortgage Loans in
such Transactions shall thereupon become
immediately due and payable,
(B) to the extent permitted by applicable law,
the Repurchase Price with respect to each
such Transaction shall be increased by the
aggregate amount obtained by daily
application of, on a 360 day per year basis
for the actual number of days during the
period from and including the date of the
exercise or deemed exercise of such option
to but excluding the date of payment of the
Repurchase Price as so increased, (x) a rate
per annum equal to 2% per annum plus the
Eurodollar Base Rate then in effect applied
to (y) the Repurchase Price for such
Transaction as of the Repurchase Date as
determined pursuant to subsection (a)(xii)
of this Section (decreased as of any day by
(I) any amounts actually in the possession
of Buyer pursuant to clause (C) of this
subsection, (II) any proceeds from the sale
of Purchased Mortgage Loans applied to the
Repurchase Price pursuant to subsection
(a)(xii) of this Section, and (III) any
amounts applied to the Repurchase Price
pursuant to subsection (a)(iii) of this
Section), and
(C) all Income actually received by the Buyer
pursuant to Section 5 (excluding any Late
Payment Fees paid pursuant to Section 5(b))
shall be applied to the aggregate unpaid
Repurchase Price owed by the Seller.
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(iii) Upon the occurrence of one or more Events of Default,
the Buyer shall have the right to obtain physical
possession of the Servicing Records (subject to the
provisions of the Pooling and Servicing Agreement)
and all other files of the Seller relating to the
Purchased Mortgage Loans and all documents relating
to the Purchased Mortgage Loans which are then or may
thereafter come in to the possession of any
Repurchase Agreement Party or any third party acting
for any Repurchase Agreement Party and such
Repurchase Agreement Party shall deliver to the Buyer
such assignments as the Buyer shall request. The
Buyer shall be entitled to specific performance of
all agreements of the Repurchase Agreement Parties
contained in the Repurchase Documents, and to the
rights conferred on Buyer under Section 4.07 of the
Pooling and Servicing Agreement.
(b) If an Event of Default shall occur and be continuing, the Buyer may
exercise, in addition to all other rights and remedies granted to it in
this Repurchase Agreement and in the Pooling and Servicing Agreement
and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a
secured party under the Uniform Commercial Code. Without limiting the
generality of the foregoing, the Buyer without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon the
Sellers or any other Person (each and all of which demands,
presentments, protests, advertisements and notices are hereby waived),
may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels or as an entirety
at public or private sale or sales, at any exchange, broker's board or
office of the Buyer or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit risk.
The Buyer shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in the Sellers, which right or equity is
hereby waived or released. The Sellers further agree, at the Buyer's
request, to assemble the Collateral and make it available to the Buyer
at places which the Buyer shall reasonably select, whether at the
Sellers' premises or elsewhere. The Buyer shall apply the net proceeds
of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the
rights of the Buyer hereunder, including without limitation reasonable
attorneys' fees and disbursements, to the payment in whole or in part
of the Secured Obligations, in such order as the Buyer may elect, and
only after such application and after the payment by the Buyer of any
other amount required or permitted by any provision of law, including
without limitation Section 9-504(1)(c) of the Uniform Commercial
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Code, need the Buyer account for the surplus, if any, to the Sellers.
To the extent permitted by applicable law, the Sellers waive all
claims, damages and demands they may acquire against the Buyer arising
out of the exercise by the Buyer of any of its rights hereunder, other
than those claims, damages and demands arising from the gross
negligence or willful misconduct of the Buyer. If any notice of a
proposed sale or other disposition of Collateral shall be required by
law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition. The Sellers shall
remain liable for any deficiency (plus accrued interest thereon as
contemplated pursuant to Section 5(b) hereof) if the proceeds of any
sale or other disposition of the Collateral are insufficient to pay the
Secured Obligations and the fees and disbursements of any attorneys
employed by the Buyer to collect such deficiency.
(c) If an Event of Default shall occur and be continuing, (a) all
proceeds of Collateral received by any Seller consisting of cash,
checks and other near-cash items shall be held by such Seller in trust
for the Buyer, segregated from other funds of such Seller, and shall
forthwith upon receipt by such Seller be turned over to the Buyer in
the exact form received by such Seller (duly endorsed by such Seller to
the Buyer, if required) and (b) any and all such proceeds received by
the Buyer (whether from a Seller or otherwise) may, in the sole
discretion of the Buyer, be held by the Buyer as collateral security
for, and/or then or at any time thereafter may be applied by the Buyer
against, the Secured Obligations (whether matured or unmatured), such
application to be in such order as the Buyer shall elect. Any balance
of such proceeds remaining after the Secured Obligations shall have
been paid in full and this Repurchase Agreement shall have been
terminated shall be paid promptly over to the Sellers or to whomsoever
may be lawfully entitled to receive the same. For purposes hereof,
proceeds shall include, but not be limited to, all principal and
interest payments, all prepayments and payoffs, insurance claims,
condemnation awards, sale proceeds, real estate owned rents and any
other income and all other amounts received with respect to the
Collateral.
(d) The Buyer's duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the Uniform Commercial Code or otherwise, shall be to
deal with it in the same manner as the Buyer deals with similar
property for its own account. Neither the Buyer nor any of its
directors, officers or employees shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Seller or otherwise.
14. RECORDING OF COMMUNICATIONS
Buyer and Seller shall have the right (but not the obligation) from
time to time to make or cause to be made tape recordings of
communications between its employees and those of the other party with
respect to Transactions. Buyer and Seller consent to the admissibility
of such tape recordings in any court, arbitration, or other
proceedings.
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The parties agree that a duly authenticated transcript of such a tape
recording shall be deemed to be a writing conclusively evidencing the
parties' agreement.
15. SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered hereinto and will
enter into each Transaction hereunder in consideration of and in
reliance upon the fact that, all Transactions hereunder constitute a
single business and contractual relationship and that each has been
entered into in consideration of the other Transactions. Accordingly,
each of Buyer and Seller agrees (i) to perform all of its obligations
in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in
respect of all Transactions hereunder, (ii) that each of them shall be
entitled to set off claims and apply property held by them in respect
of any Transaction against obligations owing to them in respect of any
other Transaction hereunder and (iii) that payments, deliveries, and
other transfers made by either of them in respect of any Transaction
shall be deemed to have been made in consideration of payments,
deliveries, and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries,
and other transfers may be applied against each other and netted.
16. NOTICES AND OTHER COMMUNICATIONS
Except as otherwise expressly permitted by this Repurchase Agreement,
all notices, requests and other communications provided for herein and
under the Pooling and Servicing Agreement (including without limitation
any modifications of, or waivers, requests or consents under, this
Repurchase Agreement) shall be given or made in writing (including
without limitation by telex or telecopy) delivered to the intended
recipient at the "Address for Notices" specified below its name on the
signature pages hereof or thereof); or, as to any party, at such other
address as shall be designated by such party in a written notice to
each other party. Except as otherwise provided in this Repurchase
Agreement and except for notices given under Section 3 (which shall be
effective only on receipt), all such communications shall be deemed to
have been duly given when transmitted by telex or telecopy or
personally delivered or, in the case of a mailed notice, upon receipt,
in each case given or addressed as aforesaid.
17. ENTIRE AGREEMENT; SEVERABILITY
This Repurchase Agreement together with the Pooling and Servicing
Agreement, the Affiliate Guaranty and the applicable Confirmation
constitutes the entire understanding between Buyer and Seller with
respect to the subject matter it covers and shall supersede any
existing agreements between the parties containing general terms and
conditions for repurchase transactions involving Purchased Mortgage
Loans. By acceptance of this Repurchase Agreement, Buyer and Seller
acknowledge that they have not made, and are not relying upon, any
statements, representations, promises or undertakings not contained in
this Repurchase Agreement. Each provision and agreement herein shall be
treated as separate and independent from any other provision
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or agreement herein and shall be enforceable notwithstanding the
unenforceability of any such other provision or agreement.
18. NON-ASSIGNABILITY
The rights and obligations of the parties under this Repurchase
Agreement and under any Transaction shall not be assigned by Seller
without the prior written consent of Buyer. Subject to the foregoing,
this Repurchase Agreement and any Transactions shall be binding upon
and shall inure to the benefit of the parties and their respective
successors and assigns. Nothing in this Repurchase Agreement express or
implied, shall give to any person, other than the parties to this
Repurchase Agreement and their successors hereunder, any benefit of any
legal or equitable right, power, remedy or claim under this Repurchase
Agreement.
19. TERMINABILITY
This Repurchase Agreement may be canceled by either party upon giving
written notice to the other except that this Repurchase Agreement
shall, notwithstanding such notice, remain applicable to any
Transaction then outstanding. Notwithstanding any such termination or
the occurrence of an Event of Default, all of the representations,
warranties and covenants hereunder shall continue and survive.
20. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
21. SUBMISSION TO JURISDICTION; WAIVERS
BUYER, AND EACH SELLER AND PLEDGOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS MASTER REPURCHASE AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY
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SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF
WHICH THE BUYER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
(E) EACH OF THE BUYER, THE SELLER AND THE PLEDGORS HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS REPURCHASE AGREEMENT, ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS OR LOANS CONTEMPLATED HEREBY OR THEREBY.
22. NO WAIVERS, ETC.
No failure on the part of the Buyer to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power
or privilege under any Repurchase Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power
or privilege under any Repurchase Document preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
23. INTENT
The Seller is an "insured depository institution" as that term is
defined in Section 18131(c)(2) of Title 12 of the United States Code,
as amended, and the parties understand and intend that this Repurchase
Agreement and each Transaction hereunder constitute a "qualified
financial contract" as that term is defined in Section 1821 of Title 12
of the United States Code, as amended.
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24. SERVICING
(a) The Seller covenants to maintain or cause the servicing of the
Mortgage Loans to be maintained in conformity with the requirements set
forth in the Pooling and Servicing Agreement.
(b) If the Mortgage Loans are serviced by the Seller, (i) the Seller
agrees that the Buyer is the collateral assignee of all servicing
records, including but not limited to any and all servicing agreements,
files, documents, records, data bases, computer tapes, copies of
computer tapes, proof of insurance coverage, insurance policies,
appraisals, other closing documentation, payment history records, and
any other records relating to or evidencing the servicing of Mortgage
Loans (the "Servicing Records"), and (ii) the Seller grants the Buyer a
security interest in all servicing fees to which such Seller is
entitled pursuant to the Pooling and Servicing Agreement and rights
relating to the Mortgage Loans and all Servicing Records to secure the
obligation of the Seller or its designee to service in conformity with
this Section and any other obligation of the Seller to the Buyer. Each
Seller covenants to safeguard such Servicing Records and to deliver
them promptly to the Buyer or its designee (including the Trustee) at
the Buyer's request, and subject to the Pooling and Servicing
Agreement.
(c) In the event the Seller or its respective Affiliate is servicing
the Mortgage Loans, the Seller shall permit the Buyer to inspect the
Seller's or its Affiliate's servicing facilities, as the case may be,
for the purpose of satisfying the Buyer that the Seller or its
Affiliate, as the case may be, has the ability to service the Mortgage
Loans as provided in this Repurchase Agreement.
25. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that in the case of
Transactions in which one of the parties is an "insured depository
institution" as that term is defined in Section 1831(c)(2) of Title 12
of the United States Code, as amended, funds held by the financial
institution pursuant to a Transaction hereunder are not a deposit and
therefore are not insured by the Federal Deposit Insurance Corporation,
the Savings Association Insurance Fund or the Bank Insurance Fund, as
applicable.
26. NETTING
The Seller is a "financial institution" as now or hereinafter defined
in Section 4402 of Title 12 of the United States Code ("Section 4402")
and any rules or regulations promulgated thereunder:
(a) All amounts to be paid or advanced by one party to or on behalf of
the other under this Repurchase Agreement or any Transaction hereunder
shall be deemed to be "payment obligations" and all amounts to be
received by or on behalf of one party from the other under this
Repurchase Agreement or any Transaction hereunder shall be deemed to be
"payment entitlements" within the meaning of Section 4402, and this
-▇▇-
▇▇
▇▇▇▇▇▇▇▇▇▇ Agreement shall be deemed to be a "netting contract" as
defined in Section 4402.
(b) The payment obligations and the payment entitlements of the parties
hereto pursuant to this Repurchase Agreement and any Transaction
hereunder shall be netted as follows. In the event that either party
(the "Defaulting Party") shall fail to honor any payment obligation
under this Repurchase Agreement or any Transaction hereunder, the other
party (the "Nondefaulting Party") shall be entitled to reduce the
amount of any payment to be made by the Nondefaulting Party to the
Defaulting Party by the amount of the payment obligation that the
Defaulting Party failed to honor.
27. PERIODIC DUE DILIGENCE REVIEW
The Seller acknowledges that the Buyer has the right to perform
continuing due diligence reviews with respect to the Mortgage Loans,
for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or otherwise, and the
Seller agrees that upon reasonable (but no less than 10 Business Days')
prior notice (with no notice being required upon the occurrence of an
Event of Default) to the Seller, the Buyer or its authorized
representatives will be permitted during normal business hours to
examine, inspect, and make copies and extracts of, the Mortgage Files
and any and all documents, records, agreements, instruments or
information relating to such Mortgage Loans in the possession or under
the control of the Seller and/or the Trustee or any Bailee. The Seller
also shall make available to the Buyer a knowledgeable financial or
accounting officer for the purpose of answering questions respecting
the Mortgage Files and the Mortgage Loans. Without limiting the
generality of the foregoing, the Seller acknowledges that the Buyer may
purchase Mortgage Loans from the Seller based solely upon the
information provided by the Seller to the Buyer in the Mortgage Loan
Tape and the representations, warranties and covenants contained
herein, and that the Buyer, at its option, has the right at any time to
conduct a partial or complete due diligence review on some or all of
the Mortgage Loans purchased in a Transaction, including without
limitation ordering new credit reports and new appraisals on the
related Mortgaged Properties and otherwise re-generating the
information used to originate such Mortgage Loan. The Buyer may
underwrite such Mortgage Loans itself or engage a mutually agreed upon
third party underwriter to perform such underwriting. The Seller agrees
to cooperate with the Buyer and any third party underwriter in
connection with such underwriting, including, but not limited to,
providing the Buyer and any third party underwriter with access to any
and all documents, records, agreements, instruments or information
relating to such Mortgage Loans in the possession, or under the
control, of the Seller. The Seller further agrees that the Seller shall
reimburse the Buyer for any and all reasonable out-of-pocket costs and
expenses incurred by the Buyer in connection with the Buyer's
activities pursuant to this Section 27, provided that, unless a Default
shall occur, the sum of (i) the reimbursement obligation of Buyer under
this Repurchase Agreement, and (ii) the aggregate reimbursement
obligation of the Borrowers pursuant to Section 11.15 of the Loan
Agreement, shall be limited to $25,000 per annum. Buyer agrees (on
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behalf of itself and its Affiliates, directors, officers, employees and
representatives) to use reasonable precaution to keep confidential, in
accordance with its customary procedures for handling confidential
information and in accordance with safe and sound practices, and not to
disclose to any third party, any non-public information supplied to it
or otherwise obtained by it hereunder with respect to the Seller, the
Guarantor. or any of their Affiliates; provided, however, that nothing
herein shall prohibit the disclosure of any such information to the
extent required by statute, rule, regulation or judicial process;
provided, further that, unless specifically prohibited by applicable
law or court order, Buyer shall, prior to disclosure thereof, notify
the Seller of any request for disclosure of any such non-public
information. Buyer further agrees not to use any such non-public
information for any purpose unrelated to this Repurchase Agreement.
28. BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT
(a) The Seller hereby irrevocably constitutes and appoints the Buyer
and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of the Seller and in the name of the
Seller or in its own name, from time to time in the Buyer's discretion,
for the purpose of carrying out the terms of this Repurchase Agreement,
to take any and all appropriate action and to execute any and all
documents and instruments which may be reasonably necessary or
desirable to accomplish the purposes of this Repurchase Agreement, and,
without limiting the generality of the foregoing, the Seller hereby
gives the Buyer the power and right, on behalf of the Seller, without
assent by, but with notice to, the Seller, if an Event of Default shall
have occurred and be continuing, to do the following:
(i) in the name of the Seller, or in its own name, or
otherwise, to take possession of and endorse and
collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under
any mortgage insurance or with respect to any other
Collateral and to file any claim or to take any other
action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Buyer for the
purpose of collecting any and all such moneys due
under any such mortgage insurance or with respect to
any other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed
on or threatened against the Collateral;
(iii) (A) to direct any party liable for any payment under
any Collateral to make payment of any and all moneys
due or to become due thereunder directly to the Buyer
or as the Buyer shall direct; (B) to ask or demand
for, collect, receive payment of and receipt for, any
and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out
of any Collateral; (C) to sign and endorse any
invoices, assignments, verifications, notices and
other documents in connection with any Collateral;
(D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or
any
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proceeds thereof and to enforce any other right in
respect of any Collateral; (E) to defend any suit,
action or proceeding brought against the Seller with
respect to any Collateral; (F) to settle, compromise
or adjust any suit, action or proceeding described in
clause (E) above and, in connection therewith, to
give such discharges or releases as the Buyer may
deem appropriate; and (G) generally, to sell,
transfer, pledge and make any agreement with respect
to or otherwise deal with any Collateral as fully and
completely as though the Buyer were the absolute
owner thereof for all purposes, and to do, at the
Buyer's option and the Seller's expense, at any time,
and from time to time, all acts and things which the
Buyer deems necessary to protect, preserve or realize
upon the Collateral and the Buyer's Liens thereon and
to effect the intent of this Repurchase Agreement,
all as fully and effectively as such Seller might do;
and
(iv) to direct the actions of the Trustee with respect to
the Collateral under the Pooling and Servicing
Agreement.
The Seller hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
(b) The Seller also authorizes the Buyer, if an Event of Default shall
have occurred and be continuing, from time to time, to execute, in
connection with any sale provided for in Section 13 hereof, any
endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(c) The powers conferred on the Buyer hereunder are solely to protect
the Buyer's interests in the Collateral and shall not impose any duty
upon it to exercise any such powers. The Buyer shall be accountable
only for amounts that it actually receives as a result of the exercise
of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Repurchase Agreement
Parties for any act or failure to act hereunder, except for its or
their own gross negligence or willful misconduct.
29. MISCELLANEOUS
(a) Time is of the essence under this agreement and all Transactions
and all references to a time shall mean New York time in effect on the
date of the action unless otherwise expressly stated in this Repurchase
Agreement.
(b) If there is any conflict between the terms of this Repurchase
Agreement or any Transaction entered into hereunder and the Pooling and
Servicing Agreement, this Repurchase Agreement shall prevail.
(c) If there is any conflict between the terms of a Confirmation or a
corrected Confirmation issued by the Buyer and this Repurchase
Agreement, the Confirmation shall prevail.
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51
(d) This Repurchase Agreement may be executed in counterparts, each of
which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
(e) The headings in this Repurchase Agreement are for convenience of
reference only and shall not affect the interpretation or construction
of this Repurchase Agreement.
30. CONFLICTS
In the event of any conflict between the terms of this Repurchase
Agreement and any other Repurchase Document, the terms of this
Repurchase Agreement shall prevail.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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52
IN WITNESS WHEREOF, the parties have entered into this
Repurchase Agreement as of the date set forth above.
Buyer ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
----- ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
Seller: ADVANTA NATIONAL BANK
------- ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
Pledgors: ADVANTA MORTGAGE HOLDING COMPANY
--------- Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. USA
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
53
ADVANTA MORTGAGE CORP. MIDATLANTIC
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. MIDATLANTIC II
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. MIDWEST
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. OF NEW JERSEY
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
----------------------------
Name:
Title:
-2-
54
ADVANTA MORTGAGE CORP. NORTHEAST
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/
--------------------------------
Name:
Title:
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/
--------------------------------
Name:
Title:
ADVANTA FINANCE CORP.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/
--------------------------------
Name:
Title:
-3-
55
EXHIBIT II
REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS
Part I. Eligible Mortgage Loans
As to each residential Mortgage Loan purchased by Buyer on a Purchase
Date (and the related Mortgage, Mortgage Note, Assignment of Mortgage and
Mortgaged Property), the Seller shall be deemed to make the following
representations and warranties to the Buyer as of such date and as of each date
Collateral Value is determined (certain defined terms used herein and not
otherwise defined in the Repurchase Agreement appearing in Part III to this
Exhibit II). With respect to any representations and warranties made to the best
of any Seller's knowledge, in the event that it is discovered that the
circumstances with respect to the related Mortgage Loan are not accurately
reflected in such representation and warranty notwithstanding the knowledge or
lack of knowledge of such Seller, then, notwithstanding that such representation
and warranty is made to the best of such Seller's knowledge, such Mortgage Loan
shall be assigned a Collateral Value of zero:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule with respect to the Mortgage Loan is complete, true and
correct in all material respects as of the date thereof.
(b) Payments Current. With respect to each Mortgage Loan other than a
Delinquent Mortgage Loan, no payment required under the Mortgage Loan is
delinquent beyond the applicable grace period. With respect to each 59-Day
Delinquent Mortgage Loan, no payment required under the Mortgage Loan is
delinquent in excess of 59 days (without regard to any grace period) and with
respect to each 89-Day Delinquent Loan, no payment required under the Mortgage
Loan is delinquent in excess of 89 days (without regard to any grace period).
(c) No Outstanding Charges. There are no material defaults in complying
with the terms of the Mortgage securing the Mortgage Loan, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Neither the Seller nor the Qualified
Originator from which the Seller acquired the Mortgage Loan has advanced funds,
or induced, solicited or knowingly received any advance of funds by a party
other than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the proceeds of the Mortgage Loan,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest thereunder.
Schedule 1-1
56
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination (other than those which would not result in a
Material Adverse Effect); except by a written instrument which has been
recorded, if necessary to protect the interests of the Buyer, and which has been
delivered to the Trustee or the Bailee, as applicable, and the terms of which
are reflected in the Mortgage Loan Schedule. The substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required, and its terms are reflected on the Mortgage Loan Schedule. No
Mortgagor in respect of the Mortgage Loan has been released, in whole or in
part, except in connection with an assumption agreement approved by the title
insurer, to the extent required by such policy, and which assumption agreement
is part of the Mortgage File delivered to the Trustee and the terms of which are
reflected in the Mortgage Loan Schedule.
(e) Modification of Mortgage Loan. The Mortgage Loan has not been
amended or modified in a manner that would materially and adversely effect the
value of such Mortgage Loan.
(f) No Defenses. The Mortgage Loan is not subject to any valid and
enforceable right of rescission, set-off, counterclaim or defense, including
without limitation the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage unenforceable, in
whole or in part and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto, and, to the Seller's knowledge,
no Mortgagor in respect of the Mortgage Loan was a debtor in any state or
Federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated other than in cases in which the Mortgage Loan was originated in
connection with a Mortgagor emerging from a bankruptcy and such Mortgage Loan
was approved by the trustee in bankruptcy. The Seller has neither knowledge nor
received any notice that any Mortgagor in respect of the Mortgage Loan is a
debtor in any state or federal bankruptcy or insolvency proceeding.
(g) Hazard Insurance. The improvements upon the Mortgaged Property is
insured by a fire and extended perils insurance policy, issued by a Qualified
Insurer, and such other hazards as are customary in the area where the Mortgaged
Property is located, and to the extent required by the Seller or Qualified
Originator as of the date of origination consistent with the Underwriting
Guidelines in an amount not less than the lesser of (i) the outstanding
principal balance of the related Mortgage Loan (together, in the case of a
Second Lien Mortgage Loan, with the outstanding principal balance of the First
Lien), (ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis or, (iii) the full insurable value of the Mortgaged
Property. If required by the Federal Emergency Management Agency, if any portion
of the Mortgaged Property is in an area identified by any federal Governmental
Authority as having special flood hazards, and flood insurance is available, a
flood insurance policy meeting the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance carrier
(unless the Underwriting Guidelines provide that such insurance is not necessary
if the portion of the Mortgaged Property in the flood area is limited to the
lot, and does not include the location of
Schedule 1-2
57
any structures), in an amount representing coverage not less than the least of
(1) the outstanding principal balance of the Mortgage Loan, (2) the full
insurable value of the Mortgaged Property, and (3) the maximum amount of
insurance available under the Flood Disaster Protection Act of 1973, as amended.
All such insurance policies (collectively, the "hazard insurance policy")
contain a standard mortgagee clause naming the Seller, its successors and
assigns (including without limitation, subsequent owners of the Mortgage Loan),
as mortgagee, and may not be reduced, terminated or canceled without 30 days'
prior written notice to the mortgagee. No such notice has been received by the
Seller. All premiums on such insurance policy have been paid. The related
Mortgage obligates the Mortgagor to maintain all such insurance and, at such
Mortgagor's failure to do so, authorizes the mortgagee to maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement therefor
from such Mortgagor. Where required by state law or regulation, the Mortgagor
has been given an opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a "master" or "blanket" hazard insurance
policy covering a condominium, or any hazard insurance policy covering the
common facilities of a planned unit development. The hazard insurance policy is
the valid and binding obligation of the insurer and is in full force and effect.
The Seller has not engaged in, and has no knowledge of the Mortgagor's having
engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity and
binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
Person, and no such unlawful items have been received, retained or realized by
the Seller.
(h) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan at
the time it was originated have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any such laws
or regulations.
(i) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has any
Seller waived any default resulting from any action or inaction by the
Mortgagor.
(j) Location and Type of Mortgaged Property. The Mortgaged Property is
located in an Acceptable State as identified in the Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
condominium unit in a low-rise condominium project, or an individual unit in a
planned unit development or a de minimis planned unit development, provided,
however, that no residence or dwelling is a mobile home. Other than
Schedule 1-3
58
with respect to Mixed Use Mortgage Loans, no portion of the Mortgaged Property
is used for commercial purposes.
(k) Valid Lien. The Mortgage is a valid, subsisting, enforceable
(except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws effecting creditors' rights generally and by general
principles of equity) and perfected (A) first lien and first priority security
interest with respect to each Mortgage Loan which is indicated by the Seller to
be a First Lien (as reflected on the Mortgage Loan Tape) or (B) second lien and
second priority security interest with respect to each Mortgage Loan which is
indicated by the Seller to be a Second Lien (as reflected on the Mortgage Loan
Tape), in either case, on the real property included in the Mortgaged Property,
including all buildings on the Mortgaged Property located in or annexed to such
buildings, and all additions, alterations and replacements made at any time with
respect to the foregoing. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not
yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other exceptions to title acceptable to mortgage
lending institutions generally and specifically referred to in
the Seller's title insurance policy delivered to the
originator of the Mortgage Loan and (a) referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not materially and
adversely affect the Appraised Value of the Mortgaged Property
set forth in such appraisal;
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property; and
(4) with respect to each Mortgage Loan which is indicated by the
Seller to be a Second Lien Mortgage Loan (as reflected on the
Mortgage Loan Tape) a First Lien on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting and enforceable (except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws effecting
creditors' rights generally and by general principles of equity) (A) first lien
and first priority security interest with respect to each Mortgage Loan which is
indicated by a Seller to be a First Lien (as reflected on the Mortgage Loan
Tape) or (B) second lien and second priority security interest with respect to
each Mortgage Loan which is indicated by a Seller to be a Second Lien Mortgage
Loan (as reflected on the Mortgage Loan Tape), in either case, on the property
described therein and such Seller has full right to pledge and assign the same
to the Buyer.
Schedule 1-4
59
(l) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
and any other agreement executed and delivered by a Mortgagor or guarantor, if
applicable, in connection with a Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable (except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws effecting creditors' rights generally and by general principles of
equity) in accordance with its terms. All parties to the Mortgage Note, the
Mortgage and any other such related agreement had legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and
any such agreement, and the Mortgage Note, the Mortgage and any other such
related agreement have been duly and properly executed by such related parties.
To the Seller' knowledge, no fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. The Seller have reviewed all of the documents
constituting the Servicing File and has made such inquiries as they deem
necessary to make and confirm the accuracy of the representations set forth
herein.
(m) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
further requirement for future advances thereunder, and either (i) any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with or (ii) an
escrow of funds for the completion of any on-site or off-site improvements has
been established in an amount sufficient to make all repairs required by the
Qualified Originator to the Mortgaged Property. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.
(n) Ownership. The Seller is the sole owner and holder of the Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer,
pledge and assign the Mortgage Loan to the Buyer free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party (other than the interest of
the Trustee pursuant to the Pooling and Servicing Agreement), to assign,
transfer and pledge each Mortgage Loan pursuant to this Repurchase Agreement and
following the pledge of each Mortgage Loan, the Buyer will hold such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest except any such security interest
created pursuant to the terms of this Repurchase Agreement.
(o) Doing Business. All parties which have had any interest in the
Mortgage Loan, 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) either (A) organized
under the laws of such state, (B) qualified to do business
Schedule 1-5
60
in such state, (C) a federal savings and loan association, a savings bank or a
national bank having a principal office in such state, or (D) not doing business
in such state.
(p) LTV. No Mortgage Loan has an LTV greater than 100% or a CLTV
greater than 125%.
(q) Title Insurance. The Mortgage Loan is covered by either (i) an
attorney's opinion of title and abstract of title, the form and substance of
which is acceptable to mortgage lending institutions making mortgage loans in
the area wherein the Mortgaged Property is located or (ii) an ALTA Buyer's title
insurance policy or other generally acceptable form of policy or insurance and
each such title insurance policy is issued by a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the Seller, their respective successors and assigns, as to the first priority
lien of the Mortgage in the original principal amount of the Mortgage Loan (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (1), (2), (3), and, with respect to each
Mortgage Loan which is indicated by the Seller to be a Second Lien Mortgage Loan
(as reflected on the Mortgage Loan Tape) clause (4) of paragraph (j) of this
Part I of Schedule 1. Where required by state law or regulation, the Mortgagor
has been given the opportunity to choose the carrier of the required mortgage
title insurance. Additionally, such Buyer's title insurance policy affirmatively
insures ingress and egress and against encroachments by or upon the Mortgaged
Property or any interest therein. The title policy does not contain any special
exceptions (other than the standard exclusions) for zoning and uses and has been
marked to delete the standard survey exception or to replace the standard survey
exception with a specific survey reading. The Seller, its respective successors
and assigns, are the sole insureds of the lender's title insurance policy, and
such lender's title insurance policy is valid and remains in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Repurchase Agreement. No claims have been made under such
lender's title insurance policy, and, to the best of such Seller's knowledge, no
prior holder or servicer of the related Mortgage, including the Seller, has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy, including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
Person, and no such unlawful items have been received, retained or realized by
any Seller.
(r) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note (other than with
respect to 59-Day Delinquent Mortgage Loans for which payments are delinquent
for no more than fifty-nine (59) days and 89-Day Delinquent Mortgage Loans for
which payments are delinquent for no more than eighty-nine (89) days) and no
event has occurred which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and neither the Seller nor their respective
predecessors have waived any default, breach, violation or event of
acceleration. With respect to each Mortgage Loan which is indicated by the
Seller to be a Second Lien Mortgage Loan
Schedule 1-6
61
(as reflected on the Mortgage Loan Schedule) (i) the prior mortgage is in full
force and effect, (ii) there is no default, breach, violation or event of
acceleration existing under such prior mortgage or the related mortgage note,
(iii) no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event of acceleration thereunder, and either (A) the prior mortgage contains a
provision which allows or (B) applicable law requires, the mortgagee under the
Second Lien Mortgage Loan to receive notice of, and affords such mortgagee an
opportunity to cure any default by payment in full or otherwise under the prior
mortgage.
(s) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the Mortgage.
(t) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and 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 and building law, ordinance or
regulation.
(u) Origination; Payment Terms. The Mortgage Loan was originated by or
in conjunction with a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or similar banking institution which is supervised and
examined by a federal or state authority. Principal payments on the Mortgage
Loan commenced no more than 60 days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate is adjusted, with respect to
adjustable rate Mortgage Loans, on each Interest Rate Adjustment Date to equal
the Index plus the Gross Margin (rounded up or down to the nearest .125%),
subject to the Mortgage Interest Rate Cap. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest,
with respect to adjustable rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than 30 years from commencement of amortization; provided, however, in the
case of a Balloon Mortgage Loan, the Mortgage Loan matures prior to full
amortization thereby requiring a balloon payment of the then outstanding
principal balance prior to full amortization of the Mortgage Loan. The due date
of the first payment under the Mortgage Note is no more than 60 days from the
date of the Mortgage Note.
(v) Customary Provisions. The Mortgage Note has a stated maturity. The
Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage
Schedule 1-7
62
designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on,
or trustee's sale of, the Mortgaged Property pursuant to the proper procedures,
the holder of the Mortgage Loan will be able to deliver good and merchantable
title to the Mortgaged Property. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage.
(w) Conformance with Underwriting Guidelines and Agency Standards. The
Mortgage Loan was underwritten substantially in accordance with the applicable
Underwriting Guidelines. The Mortgage Note and Mortgage are on forms similar to
those used by FHLMC or FNMA and the Seller has not made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used.
(x) Occupancy of the Mortgaged Property. As of the Purchase Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities. The Seller has not received notification from any
governmental authority that the Mortgaged Property is in material non-compliance
with such laws or regulations, is being used, operated or occupied unlawfully or
has failed to have or obtain such inspection, licenses or certificates, as the
case may be. The Seller has not received notice of any violation or failure to
conform with any such law, ordinance, regulation, standard, license or
certificate.
(y) No Additional Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above other than collateral which is not included in
any calculation of the LTV of such Mortgage Loan.
(z) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Trustee or
the Buyer to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor.
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under the Pooling and Servicing Agreement for each Mortgage Loan have been
delivered to the Trustee. The Seller or their respective agents are in
possession of a complete, true and accurate Mortgage File in compliance with the
Pooling and Servicing Agreement, except for such documents the originals of
which have been delivered to the Trustee.
Schedule 1-8
63
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(cc) Due-On-Sale. The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder.
(dd) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having (A) first lien priority with respect to each Mortgage Loan which is
indicated by the Seller to be a First Lien (as reflected on the Mortgage Loan
Tape) or (B) second lien priority with respect to each Mortgage Loan which is
indicated by the Seller to be a Second Lien Mortgage Loan (as reflected on the
Mortgage Loan Tape), in either case, by a title insurance policy, an endorsement
to the policy insuring the mortgagee's consolidated interest or by other title
evidence acceptable to FNMA and FHLMC. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan.
(ee) Mortgaged Property Undamaged. To the best of the Seller's
knowledge, the Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, flood, tornado or other casualty so as to affect adversely the
value of the Mortgaged Property as security for the Mortgage Loan or the use for
which the premises were intended and each Mortgaged Property is in good repair.
There have not been any condemnation proceedings with respect to the Mortgaged
Property and the Seller has no knowledge of any such proceedings.
(ff) Collection Practices; Escrow Deposits; Interest Rate Adjustments.
The origination and collection practices used by the originator, each servicer
of the Mortgage Loan and the Seller with respect to the Mortgage Loan have been
in all respects in compliance with applicable laws and regulations and in all
material respects in compliance with Accepted Servicing Practices, and have been
in all respects legal. With respect to escrow deposits and Escrow Payments
(other than with respect to each Mortgage Loan which is indicated by the Seller
to be a Second Lien Mortgage Loan and for which the mortgagee under the First
Lien is collecting Escrow Payments (as reflected on the Mortgage Loan Tape), all
such payments are in the possession of, or under the control of, the Seller and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments have
been collected in full compliance with state and federal law. An escrow of funds
is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest
Schedule 1-9
64
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited.
(gg) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, PMI Policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with the
placement of any such insurance, no commission, fee, or other compensation has
been or will be received by the Seller or by any officer, director, or employee
of the Seller or any designee of the Seller or any corporation in which the
Seller or any officer, director, or employee had a financial interest at the
time of placement of such insurance.
(hh) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge, of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940.
(ii) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage Loan application
by a qualified appraiser, duly appointed by the Seller, who had no interest,
direct or indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan.
(jj) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of adjustable rate mortgage loans, and
the Seller maintain such statement in the Mortgage File.
(kk) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property.
(ll) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Purchase Date (whether or not known to the Seller on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any private mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay.
Schedule 1-10
65
(mm) Capitalization of Interest. The Mortgage Note does not by its
terms provide for the capitalization or forbearance of interest.
(nn) No Equity Participation. No document relating to the Mortgage Loan
provides for any contingent or additional interest in the form of participation
in the cash flow of the Mortgaged Property or a sharing in the appreciation of
the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage
Note is not convertible to an ownership interest in the Mortgaged Property or
the Mortgagor and the Seller has not financed and does not own directly or
indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
(oo) Withdrawn Mortgage Loans. If the Mortgage Loan has been released
to the Seller pursuant to a Request for Release as permitted under Section 5 of
the Pooling and Servicing Agreement, then the promissory note relating to the
Mortgage Loan was returned to the Trustee within 14 days (or if such fourteenth
day was not a Business Day, the next succeeding Business Day).
(pp) No Exception. Neither the Trustee nor the Bailee has noted any
material exceptions on an Exception Report (as defined in the Pooling and
Servicing Agreement or the Bailee Agreement) with respect to the Mortgage Loan
which would materially adversely affect the Mortgage Loan or the Buyer's
ownership or security interest, granted by the Seller, in the Mortgage Loan.
(qq) Qualified Originator. The Mortgage Loan has been originated by,
and, if applicable, purchased by the Seller from, a Qualified Originator.
(rr) Mortgage Submitted for Recordation. The Mortgage either has been
or will promptly be submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located.
(ss) Securitization. Each Mortgage Loan conforms to the Seller's
Underwriting Guidelines and otherwise conforms to the current standards of
institutional securitization applicable to loans similar in nature to the
Mortgage Loans. All Mortgage Loans, individually and in the aggregate,
substantially comply with each related representation or warranty customarily
required under the current standards of investment grade institutional
securitization applicable to mortgage loans similar in nature to the Mortgage
Loans.
(tt) Delinquent Loan Sublimit The inclusion of any Mortgage Loan
included in the Borrowing Base shall not cause the aggregate Collateral Value of
Eligible Mortgage Loans (i) which are 59-Day Delinquent Mortgage Loans to exceed
3% of the aggregate principal amount outstanding under the Loans, or (ii) which
are 89-Day Delinquent Mortgage Loans to exceed 1% of the aggregate Purchase
Price of all Transactions outstanding under the Repurchase Documents.
Schedule 1-11
66
Part II. Pledged Certificates
As to each Mortgage Loan which is related to a Pledged Certificate, and
as to the related Pooling and Servicing Agreement, the following eligibility
criteria shall be met as of the applicable Purchase Date and as of each date
Collateral Value is determined:
(a) Validity of Pooling and Servicing Agreement. The Pooling and
Servicing Agreement and any other agreement executed and
delivered by the Trustee in connection with the Pledged
Certificates are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in
accordance with its terms. The Trustee, Sponsor and Master
Servicer (as the last two such terms are defined in the
Pooling and Servicing Agreement) had legal capacity to execute
and deliver the Pooling and Servicing Agreement and any such
other related agreement to which such Trustee, Sponsor or
Master Servicer are parties have been duly and properly
executed by such Trustee, Sponsor or Master Servicer, as
applicable. The Pooling and Servicing Agreement is in full
force and effect, and the enforceability of the Pooling and
Servicing Agreement has not been contested by Trustee.
(b) Original Terms Unmodified. The terms of the Pooling and
Servicing Agreement have not been impaired, altered or
modified in any respect.
(c) No Defenses. The Pledged Certificates are not subject to any
right of rescission, set-off, counterclaim or defense nor will
the operation of any of the terms of the Pooling and Servicing
Agreement, or the exercise of any right thereunder, render the
Pooling Servicing Agreement unenforceable in whole or in part
and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto.
(d) No Waiver. The Seller have not waived the performance by the
Trustee or Master Servicer of any action, if the Trustee's
failure to perform such action would cause any Mortgage Loan
or Pledged Certificate to be in default, nor has the Seller
waived any default resulting from any action or inaction by
the Trustee or Master Servicer.
(e) No Defaults. There is no material default, breach, violation
or event of acceleration existing under the Pooling and
Servicing Agreement and no event has occurred which, with the
passage of time or giving of notice or both and the expiration
of any grace or cure period, would constitute a material
default, breach, violation or event of acceleration under the
Pooling and Servicing Agreement, and neither the Seller nor
its predecessors in interest have waived any such default,
breach, violation or event of acceleration.
Schedule 1-12
67
(f) Delivery of Pooling and Servicing Agreement. A copy of the
Pooling and Servicing Agreement has been delivered to the
Buyer.
(g) Pooling and Servicing Agreement Assignable. The Pooling and
Servicing Agreement is assignable to the Buyer. The Pooling
and Servicing Agreement permits the holder of the Pledged
Certificate to sell, assign, pledge, transfer or rehypothecate
the Pledged Certificates issued pursuant to the Pooling and
Servicing Agreement.
Schedule 1-13
68
Part III Defined Terms
In addition to terms defined elsewhere in the Repurchase Agreement, the
following terms shall have the following meanings when used in this Exhibit II:
"Acceptable State" shall mean any state unless the Seller is otherwise
notified by the Buyer.
"Accepted Servicing Practices" shall mean, with respect to any Mortgage
Loan, those mortgage servicing practices of mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
"ALTA" means the American Land Title Association.
"Appraised Value" shall mean the value set forth in an appraisal made
in connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related mortgaged property is located to reflect the assignment and pledge of
the mortgage.
"Best's" means Best's Key Rating Guide, as the same shall be amended
from time to time.
"Cut-off Date" means the first day of the month in which the related
Purchase Date occurs.
"Due Date" means the day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
"Escrow Payments" means with respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
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.
"FHLMC" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"FNMA" means the Federal National Mortgage Association, or any
successor thereto.
69
"Gross Margin" means with respect to each adjustable rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note.
"Index" means with respect to each adjustable rate Mortgage Loan, the
index set forth in the related Mortgage Note for the purpose of calculating the
interest rate thereon.
"Insurance Proceeds" means with respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
"Interest Rate Adjustment Date" means with respect to each adjustable
rate Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
"Loan-to-Value Ratio" or "LTV" means with respect to any Mortgage Loan,
the ratio of the original outstanding principal amount of the Mortgage Loan to
the lesser of (a) the Appraised Value of the Mortgaged Property at origination
or (b) if the Mortgaged Property was purchased within 12 months of the
origination of the Mortgage Loan, the purchase price of the Mortgaged Property.
"Monthly Payment" means the scheduled monthly payment of principal and
interest on a Mortgage Loan as adjusted in accordance with changes in the
Mortgage Interest Rate pursuant to the provisions of the Mortgage Note for an
adjustable rate Mortgage Loan.
"Mortgage Interest Rate" means the annual rate of interest borne on a
Mortgage Note, which shall be adjusted from time to time with respect to
adjustable rate Mortgage Loans.
"Mortgage Interest Rate Cap" means with respect to an adjustable rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
"Mortgagee" means the Seller or any subsequent holder of a Mortgage
Loan.
"Origination Date" shall mean, with respect to each Mortgage Loan, the
date of the Mortgage Note relating to such Mortgage Loan, unless such
information is not provided by the Seller with respect to such Mortgage Loan, in
which case the Origination Date shall be deemed to be the date that is 40 days
prior to the date of the first payment under the Mortgage Note relating to such
Mortgage Loan.
"PMI Policy" or "Primary Insurance Policy" means a policy of primary
mortgage guaranty insurance issued by a Qualified Insurer.
"Qualified Insurer" means an insurance company duly qualified as such
under the laws of the states in which the Mortgaged Property is located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, and approved as an insurer
pursuant to the applicable Underwriting Guidelines.
Schedule 1-2
70
"Qualified Originator" means an originator of Mortgage Loans reasonably
acceptable to the Buyer.
"Servicing File" means with respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to a Trustee and copies of the Mortgage Loan
Documents set forth in Section 2 of the Pooling and Servicing Agreement.
Schedule 1-3
71
AMENDMENT NO. 1
TO MASTER REPURCHASE AGREEMENT
Amendment No. 1 dated as of September 25, 1998 ("Amendment No.
1"), among ADVANTA NATIONAL BANK, as Seller, ADVANTA MORTGAGE HOLDING COMPANY, a
Delaware corporation, as a Pledgor; ADVANTA MORTGAGE CORP. USA, a Delaware
corporation, as a Pledgor; ADVANTA MORTGAGE CORP. MIDATLANTIC, a Pennsylvania
corporation, as a Pledgor; ADVANTA MORTGAGE CORP. MIDATLANTIC II, a Pennsylvania
corporation, as a Pledgor; ADVANTA MORTGAGE CORP. MIDWEST, a Pennsylvania
corporation, as a Pledgor; ADVANTA MORTGAGE CORP. OF NEW JERSEY, a New Jersey
corporation, as a Pledgor; ADVANTA MORTGAGE CORP. NORTHEAST, a New York
corporation, as a Pledgor; ADVANTA MORTGAGE CONDUIT SERVICES, INC., a Delaware
corporation, as a Pledgor; ADVANTA FINANCE CORP., a Nevada corporation, as a
Pledgor (each a "Pledgor", collectively the "Pledgors") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
MORTGAGE CAPITAL INC., a New York corporation (the "Buyer").
RECITALS
The Seller and the Pledgors entered into that certain Master
Repurchase Agreement, dated August 21, 1998 with the Buyer (the "Existing
Repurchase Agreement" as amended by this Amendment No. 1, the "Repurchase
Agreement") for the sale of certain mortgage loans by the Seller on the terms
and conditions as set forth in the Existing Repurchase Agreement. Capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the Existing Repurchase Agreement or the Sale and Servicing Agreement
(as defined below), each as applicable.
The Pledgors are also party to that certain Amended and
Restated Master Loan and Security Agreement dated as of August 21, 1998, as
amended by Amendment No. 1 to Amended and Restated Master Loan and Security
Agreement dated as of September 25, 1998, among the Pledgors (as Borrowers
thereunder) and the Lender.
The Seller, the Pledgors and the Buyer wish to amend the
Existing Repurchase Agreement to provide for the existence of the Indenture
Notes (as defined below).
Accordingly, the parties hereby agree, in consideration of the
mutual premises and mutual obligations set forth herein, to the terms and
conditions of the Existing Repurchase Agreement as amended by this Amendment No.
1.
SECTION 1.________Definitions. Section 1.01 of the Existing
Loan Agreement is hereby amended by:
(a) adding the following definitions in proper alphabetical
order therein.
"Indenture" means the Indenture dated as of September 25, 1998
between Advanta Home Equity Loan Owner Trust 1998-MS1 and Bankers Trust Company
of California, N.A.
"Indenture Note" means any note authorized by and
authenticated and delivered under the Indenture.
"Indenture Note Principal Balance" means the principal balance
of each Indenture Note as calculated in the Sale and Servicing Agreement.
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72
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of September 25, 1998, among Advanta Home Equity Loan Owner
Trust 1998-MS1, as Issuer, Advanta Loan Warehouse Corporation, as Depositor,
Advanta Mortgage Corp. USA ("AMCUSA"), as Servicer, Advanta National Bank,
Advanta Bank Corp. and AMCUSA, as Loan Originators, Bankers Trust Company of
California, N.A., as Indenture Trustee on behalf of the Noteholders, and Advanta
Corp. together with AMCUSA, as Transfer Obligors.
(b) deleting the definitions of "Available Committed Purchase
Amount" and "Available Purchase Amount" in their entirety and replacing them
with the following:
"Available Committed Purchase Amount" means the Maximum
Committed Amount, minus the sum of (i) the aggregate amount of Transactions
outstanding hereunder, (ii) aggregate amount of Loans outstanding under the Loan
Agreement, and (iii) the aggregate Indenture Note Principal Balance of the
Indenture Notes.
"Available Purchase Amount" means the Maximum Purchase Amount
minus the sum of (i) the aggregate amount of Transactions outstanding hereunder,
(ii) the aggregate amount of Loans outstanding under the Loan Agreement, and
(iii) the aggregate Indenture Note Principal Balance of the Indenture Notes.
(c) (1) deleting in Section 3(l) of the Existing Repurchase
Agreement the word "Maximum" and inserting the word "Available" in lieu thereof;
and
(2) deleting in Section 3(l) of the Existing Repurchase
Agreement the phrase "minus the aggregate principal amount of outstanding Loans
under the Loan Agreement".
SECTION 2. Conditions Precedent to Amendment Effective Date.
This Amendment No. 1 shall become effective on the date (the "Amendment
Effective Date") on which the following conditions precedent shall have been
satisfied:
2.1 Delivered Documents. On the Amendment Effective Date, the
Buyer shall have received the following documents, each of which shall be
satisfactory to the Buyer in form and substance:
(a) this Amendment No. 1, executed and delivered by a duly
authorized officer of each of the Seller and the Pledgors;
(b) such other documents as the Buyer or counsel to the Buyer
may reasonably request.
2.2 No Default. On the Amendment Effective Date, the Seller
and the Pledgors (i) shall be in compliance with all the terms and provisions
set forth in the Repurchase Agreement on their part to be observed or performed,
(ii) the representations and warranties made by the Seller pursuant to Section 3
of this Amendment No. 1 shall be true and complete on and as of such date in all
material respects with the same force and effect as if made on and as of such
date (or, if such representation or warranty is expressly stated to have been
made as of a specific date, as of such date), and (iii) no Default shall have
occurred and be continuing on such date.
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73
SECTION 3. Representations and Warranties. The Seller hereby
represents and warrants to the Buyer that it is in compliance with all the terms
and provisions set forth in the Repurchase Agreement (as amended hereby, if
applicable) on their part to be observed or performed, and that no Default has
occurred or is continuing, and hereby confirm and reaffirm the representations
and warranties contained in Section 10 of the Repurchase Agreement.
SECTION 4. Limited Effect. Except as expressly set forth in
this Amendment No. 1, the Existing Repurchase Agreement shall continue to be,
and shall remain, in full force and effect in accordance with its terms.
SECTION 5. Counterparts. This Amendment No. 1 may be executed
by each of the parties hereto on any number of separate counterparts, each of
which shall be an original and all of which taken together shall constitute one
and the same instrument.
SECTION 6. GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
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74
Execution Copy
IN WITNESS WHEREOF, the parties have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
Seller ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
------ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: /s/
-----------------------------------
Name:
Title:
Buyer: ADVANTA NATIONAL BANK
----- ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/
-----------------------------------
Name:
Title:
Pledgors:
--------- ADVANTA MORTGAGE HOLDING COMPANY
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/
-----------------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. USA
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/
-----------------------------------
Name:
Title:
75
ADVANTA MORTGAGE CORP. MIDATLANTIC
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
-----------------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. MIDATLANTIC II
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
-----------------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. MIDWEST
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
-----------------------------------
Name:
Title:
ADVANTA MORTGAGE CORP. OF NEW JERSEY
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
-----------------------------------
Name:
Title:
-2-
76
ADVANTA MORTGAGE CORP. NORTHEAST
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
-----------------------------------
Name:
Title:
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Welsh & McKean Roads,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
-----------------------------------
Name:
Title:
ADVANTA FINANCE CORP.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:/s/
-----------------------------------
Name:
Title:
-3-