Execution Copy
January 14, 2003
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
This is a Purchase Agreement (the "Agreement"), dated as of January 1,
2003, by and between Banc of America Mortgage Capital Corporation, having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Purchaser") and ▇▇▇▇▇ Fargo Home Mortgage, Inc., having an ▇▇▇▇▇▇ ▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Seller").
W I T N E S S E T H
WHEREAS, the Seller agrees to sell, and the Purchaser agrees to purchase,
from time to time certain fixed rate mortgage loans (the "Mortgage Loans") on a
servicing retained basis as described herein:
WHEREAS, the Mortgage Loans shall be delivered as pools of whole loans
(each a "Loan Package") on various dates as provided herein (each a "Closing
Date"); and
WHEREAS, the parties intend hereby to set forth the terms and conditions
upon which the proposed Transactions will be effected.
NOW THEREFORE, in consideration of the promises and the mutual agreements
set forth herein, the parties hereto agree as follows:
SECTION 1. All capitalized terms not otherwise defined herein have the
respective meanings set forth in the Master Seller's Warranties and Servicing
Agreement, dated as of the date herewith (the "Master Seller's Warranties and
Servicing Agreement").
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase from time to time, Mortgage Loans in Loan Packages
having aggregate principal balances on the related Cut-off Dates in amounts as
set forth in the respective Commitment Letters, or in such other amountS as
agreed by the Purchaser and the Seller as evidenced by the actual aggregate
principal balance of the Mortgage Loans in the related Loan Package accepted by
the Purchaser on the related Closing Date. The Mortgage Loans will be delivered
pursuant to the Master Seller's Warranties and Servicing Agreement (the "Master
Seller's Warranties and Servicing Agreement") dated January 1, 2003, between the
Purchaser and the Company.
SECTION 3. Mortgage Schedules. The Seller will provide the Purchaser with
certain information constituting listings of the Mortgage Loans to be purchased
under this Agreement for each Transaction (the "Mortgage Loan Schedule"). Each
Mortgage Loan Schedule shall conform to the definition of "Mortgage Loan
Schedule" under the Master Seller's Warranties and Servicing Agreement.
SECTION 4. Purchase Price. The purchase price for each Loan Package (the
"Purchase Price") shall be the percentage of par as stated in the related
Commitment Letter, multiplied by the aggregate scheduled principal balance, as
of the related Cut-off Date, of the Mortgage Loans in the related Loan Package,
after application of scheduled payments of principal for such related Loan
Package due on or before such Cut-off Date whether or not collected. The
Purchase Price for a Loan Package may be adjusted as stated in the related
Commitment Letter.
In addition to the Purchase Price, the Purchaser shall pay to the Seller,
at closing, accrued interest on the aggregate scheduled principal amount of the
related Mortgage Loans at the weighted average Mortgage Loan Remittance Rate for
each Loan Package from the related Cut-off Date through the day prior to the
related Closing Date, inclusive.
With respect to each Loan Package, the Purchaser shall be entitled to (1)
all scheduled principal due after the Cut-off Date, (2) all other recoveries of
principal collected after the Cut-off Date (provided, however, that all
scheduled payments of principal due on or before the Cut-off Date and collected
by the Seller after the Cut-off Date shall belong to the Seller), and (3) all
payments of interest on the Mortgage Loans at the Mortgage Loan Remittance Rate
(minus that portion of any such payment which is allocable to the period prior
to the Cut-off Date). The principal balance of each Mortgage Loan as of the
Cut-off Date is determined after application of payments of principal due on or
before the Cut-off Date whether or not collected. Therefore, payments of
scheduled principal and interest prepaid for a Due Date beyond the Cut-off Date
shall not be applied to the principal balance as of the Cut-off Date. Such
prepaid amounts (minus interest at the Servicing Fee Rate) shall be the property
of the Purchaser. The Seller shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the Purchaser
for subsequent remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files. Prior to the related Closing
Date, the Seller shall (a) deliver to the Purchaser in escrow, for examination,
the Mortgage File for each Mortgage Loan, including a copy of the Assignment of
Mortgage, pertaining to each Mortgage Loan, or (b) make the Mortgage Files
available to the Purchaser for examination at the Seller's offices or such other
location as shall otherwise be agreed upon by the Purchaser and the Seller. Such
examination may be made by the Purchaser, or by any prospective purchaser of the
Mortgage Loans from the Purchaser, at any time before or after such Closing Date
upon prior reasonable notice to the Seller. The fact that the Purchaser or any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Mortgage Files shall not
affect the Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief or remedy as provided under the Master Seller's
Warranties and Servicing Agreement.
SECTION 6. Representations, Warranties and Agreements of Seller. The
Seller agrees and acknowledges that it shall, as a condition to the consummation
of the transactions contemplated hereby, make the representations and warranties
specified in Section 3.01 and 3.02 of the Master Seller's Warranties and
Servicing Agreement, as of each Closing Date. The meaning of the term
"Agreement" as used in Sections 3.01 and 3.02 of the Seller's Warranties and
Servicing Agreement shall include this Agreement. The Seller, without conceding
that the Mortgage Loans are securities, hereby makes the following additional
representations, warranties and agreements which shall be deemed to have been
made as of the related Closing Date:
a) neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loans,
any interest in any Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge
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or other disposition of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loans, any interest in any
Mortgage Loans or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action which would constitute a
distribution of the Mortgage Loans under the Securities Act of 1933 (the
"1933 Act") or which would render the disposition of any Mortgage Loans a
violation of Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Mortgage Loans; and
b) the Seller has not dealt with any broker or agent or anyone else who
might be entitled to a fee or commission in connection with this
transaction other than the Purchaser.
SECTION 7. Representation, Warranties and Agreement of Purchaser. The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall have
been deemed to have been made as of the related Closing Date.
a) the Purchaser understands that the Mortgage Loans have not been
registered under the 1933 Act or the securities laws of any state;
b) except as contemplated under the Seller's Warranties and Servicing
Agreement, the Purchaser is acquiring the Mortgage Loans for its own
account only and not for any other person;
c) the Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Mortgage Loans;
d) the Purchaser has been furnished with all information regarding the
Mortgage Loans which it has requested from the Seller; and
e) neither the Purchaser nor anyone acting on its behalf offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security from, or otherwise approached or negotiated with
respect to any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the
Mortgage Loans under the 1933 Act or which would render the disposition of
any Mortgage Loan a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the
Mortgage Loans.
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SECTION 8. Closing. The closing for the purchase and sale of each Loan
Package, shall take place on the related Closing Date. At the Purchaser's
option, the Closing shall be either: by telephone, confirmed by letter or wire
as the parties shall agree; or conducted in person, at such place as the parties
shall agree.
The closing shall be subject to each of the following conditions:
a) all of the representations and warranties of the Seller under this
Agreement and under the Master Seller's Warranties and Servicing Agreement
shall be true and correct as of such Closing Date and no event shall have
occurred which, with notice or the passage of time, would constitute a
default under this Agreement or an Event of Default under the Master
Seller's Warranties and Servicing Agreement;
b) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all Closing Documents as specified in
Section 9 of this Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all signatories other than
the Purchaser as required pursuant to the respective terms thereof;
c) the Seller shall have delivered and released to the Custodian under
the Master Seller's Warranties and Servicing Agreement all documents
required pursuant to the related Custodial Agreement; and
d) all other terms and conditions of this Agreement and the Master
Seller's Warranties and Servicing Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Seller
on such Closing Date the related Purchase Price, plus accrued interest pursuant
to Section 4 of this Agreement, by wire transfer of immediately available funds
to the account designated by the Seller.
SECTION 9. Closing Documents. With respect to the Mortgage Loans, the
Closing Documents shall consist of fully executed originals of the following
documents:
On the initial Closing Date:
1. the Master Seller's Warranties and Servicing Agreement, in two
counterparts;
2. this Agreement in two counterparts;
3. the Custodial Agreement, dated as of the related Cut-off Date, in
three counterparts, in the form attached as an exhibit to the Master
Seller's Warranties and Servicing Agreement;
4. the Mortgage Loan Schedule for the related Loan Package, one copy of
each to be attached to each counterpart of the related Assignment
and Conveyance Agreement, to each counterpart of this Agreement, and
to each counterpart of the Custodial Agreement, as the Mortgage Loan
Schedules thereto;
5. a Receipt and Certification, as required under the Custodial
Agreement;
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6. an Opinion of Counsel of the Seller, in the form of Exhibit 1
hereto; and
7. an Assignment and Conveyance Agreement of Mortgage Loans.
On each subsequent Closing Date, the following documents:
1. the Mortgage Loan Schedule for the related Loan Package;
2. an Assignment and Conveyance Agreement of Mortgage Loans for the
related Loan Package; and
3. an Initial Certification, as required under the Custodial Agreement.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen, the legal fees and expenses of its attorneys and the costs and
expenses associated with the Custodian. The Seller shall be responsible for
reasonable costs and expenses associated with any preparation and recording of
the initial Assignments of Mortgage. All other costs and expenses incurred in
connection with the transfer and delivery of the Mortgage Loans, including fees
for title policy endorsements and continuations and the Seller's attorney fees,
shall be paid by the Seller.
SECTION 11. Servicing The Mortgage Loans shall be serviced by the Seller
in accordance with the terms of the Master Seller's Warranties and Servicing
Agreement. The Seller shall be entitled to servicing fees calculated as provided
therein, at the Servicing Fee Rate.
SECTION 12. Financial Statements. The Seller understands that in
connection with the Purchaser's marketing of the Mortgage Loans, the Purchaser
shall make available to prospective purchasers a Consolidated Statement of
Operations of the Seller for the most recently completed two fiscal years
respecting which such a statement is available, as well as a Consolidated
Statement of Condition at the end of the last two (2) fiscal years covered by
such Consolidated Statement of Operations. The Purchaser shall also make
available any comparable interim statements to the extent any such statements
have been prepared by the Seller in a format intended or otherwise suitable for
the public at large. The Seller, if it has not already done so, agrees to
furnish promptly to the Purchaser copies of the statements specified above. The
Seller shall also make available information on its servicing performance with
respect to loans in its own portfolio and loans serviced for others (if any),
including loss and delinquency ratios.
The Seller also agrees to allow access to a knowledgeable (as shall be
determined by the Seller) financial or accounting officer for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller or the financial statements of the Seller.
SECTION 13. Mandatory Delivery. The sale and delivery on each Closing Date
of the related Mortgage Loans described on the respective Mortgage Loan
Schedules is mandatory, it being specifically understood and agreed that each
Mortgage Loan must be unique and identifiable on such Closing Date and that an
award of money damages would be insufficient to compensate the Purchaser for the
losses and damages incurred by the Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
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deliver the Mortgage Loans on or before such Closing Date. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 14. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address shown on the first page hereof,
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice of communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 15. Severability Clause. Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
SECTION 16. Counterparts. This Agreement may be executed simultaneously in
any number of counterparts. Each counterpart shall be deemed to be an original,
and all such counterparts shall constitute one and the same instrument.
SECTION 17. Place of Delivery and Governing Law. This Agreement shall be
deemed in effect when a fully executed counterpart thereof is received by the
Purchaser in North Carolina and shall be deemed to have been made in North
Carolina. The Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with the laws of the State of New
York, except to the extent preempted by Federal Law. In the event a claim or
controversy arises concerning the interpretation or enforcement of the terms of
this Agreement, the Purchaser and the Seller agree that such claim or
controversy may be settled by final, binding arbitration if the Purchaser and
the Seller, as applicable, consent to such arbitration at the time such claim or
controversy arises which consent may be withheld by the Purchaser or the Seller
in their sole discretion.
Each of the Seller and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or
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arising out of, under, or in connection with this Agreement, or any other
documents and instruments executed in connection herewith, or any course of
conduct, course of dealing, statements (whether oral or written), or actions of
the Seller or the Purchaser. This provision is a material inducement for the
Purchaser to enter into this Agreement.
SECTION 18. Further Agreements. The Purchaser and the Seller each agree to
execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Without limiting the generality of the foregoing, the Seller shall
reasonably cooperate with the Purchaser in connection with the initial resales
of the Mortgage Loans by the Purchaser. In that connection, the Seller shall
provide to the Purchaser: (i) any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request, and (ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors and certificates of public officials or officers of the Seller as
are reasonably believed necessary by the Purchaser in connection with such
resales. The requirement of the Seller pursuant to (ii) above shall terminate on
the Closing Date, except as provided pursuant to Article IX of the Master
Seller's Warranties and Servicing Agreement. Prior to incurring any
out-of-pocket expenses pursuant to this paragraph, the Seller shall notify the
Purchaser in writing of the estimated amount of such expense. The Purchaser
shall reimburse the Seller for any such expense following its receipt of
appropriate details thereof.
SECTION 19. Intention of the Parties. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, an undivided 100%
ownership interest in the Mortgage Loans and not a debt instrument of the Seller
or another security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Mortgage Loan Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 20. Successors and Assigns; Assignment of Purchase Agreement. This
Agreement shall bind and inure to the benefit and be enforceable by the Seller
and the Purchaser and the respective successors and assigns of the Seller and
the Purchaser. This Agreement shall not be assigned, pledged or hypothecated by
the Seller to a third party without the consent of the Purchaser.
SECTION 21. Waivers; Other Agreements. No term or provision of this
Agreement may be waived or modified unless such waiver or modification is in
writing and signed by the party against whom such waiver or modification is
sought to be enforced.
SECTION 22. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
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SECTION 23. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles;
c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are
to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
d) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs
and other subdivisions;
e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
provision; and
f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 24. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
[Signatures Follow]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
BANC OF AMERICA MORTGAGE
CAPITAL CORPORATION
(Purchaser)
By: /s/ ▇▇▇▇▇ ▇. Good
Name: ▇▇▇▇▇ ▇. Good
Title: Vice President
▇▇▇▇▇ FARGO HOME MORTGAGE,
INC.
(Seller)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
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Execution Copy
January 14, 2003
EXHIBIT 1
FORM OF OPINION OF COUNSEL
@
@
@
@
Re: Mortgage Loan Sale by ▇▇▇▇▇ Fargo Home Mortgage, Inc. (the "Company") to
________ (the "Purchaser") of fixed rate first lien mortgage loans (the
"Mortgage Loans") pursuant to that certain Master Seller's Warranties and
Servicing Agreement and Master Mortgage Loan Purchase Agreement by and
between the Company and the Purchaser, dated as of ___________, 20__.
Dear Sir/Madam:
I am @ of ▇▇▇▇▇ Fargo Home Mortgage, Inc. and have acted as counsel to ▇▇▇▇▇
Fargo Home Mortgage, Inc. (the "Company"), with respect to certain matters in
connection with the sale by the Company of Mortgage Loans pursuant to that
certain Master Seller's Warranties and Servicing Agreement and Master Mortgage
Loan Purchase Agreement by and between the Company and @ (the "Purchaser"),
dated as of @, 2003, (the "Agreements"), which sale is in the form of whole
Mortgage Loans. Capitalized terms not otherwise defined herein have the meanings
set forth in the Master Seller's Warranties and Servicing Agreement.
I have examined the following documents:
1. the Master Seller's Warranties and Servicing Agreement;
2. the Master Mortgage Loan Purchase Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements. I
have assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that;
1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the state of California.
2. The Company has the power to engage in the transactions contemplated by
the Agreements, the Custodial Agreement and all requisite power, authority
and legal right to execute and
deliver the Agreements, the Custodial Agreement and the Mortgage Loans,
and to perform and observe the terms and conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company, signed
(a) the Agreements, each dated as of @, 2003, by and between the Company
and the Purchaser, and (b) any other document delivered prior hereto or on
the date hereof in connection with the sale and servicing of the Mortgage
Loans in accordance with the Agreements and the person was, at the
respective times of such signing and delivery, and is, as of the date
hereof, duly elected or appointed, qualified and acting and as such
officer or attorney-in-fact, and the signatures of such persons appearing
on such documents are their genuine signatures.
4. Each of the Agreements, the Custodial Agreement, and the Mortgage Loans,
has been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement enforceable in accordance with its
terms, subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the availability of
specific performance, none of which will materially interfere with the
realization of the benefits provided thereunder or with the Purchaser's
ownership of the Mortgage Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original signature in order to complete
the transactions contemplated by the Agreements and the Custodial
Agreement, and by original or facsimile signature in order to execute the
endorsements to the Mortgage Notes and the assignments of the Mortgages,
and the original or facsimile signature of the officer at the Company
executing the endorsements to the Mortgage Notes and the assignments of
the Mortgages represents the legal and valid signature of said officer of
the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreements, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by the
Agreements, and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreements and the Custodial Agreement,
will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of
the Company, the terms of any indenture or other agreement or instrument
to which the Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my opinion,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the
right or ability of the Company to carry on its business substantially as
now conducted or in any material liability on the part of the Company or
which would draw into question the validity of the Agreements, and the
Custodial Agreement, or of any action taken or to be taken in
connection with the transactions contemplated thereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Agreements and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested to
the legal department of the Company or an employee of the Company
responsible for the receipt of process a present intention to initiate
such proceedings; nor have I regarded any legal or governmental actions,
investigations or proceedings as including those that are conducted by
state or federal authorities in connection with their routine regulatory
activities. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient fully to transfer all
right, title and interest of the Company thereto as noteholder and
mortgagee, apart from the rights to service the Mortgage Loans pursuant to
the Agreements.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage Notes
to the Purchaser. Upon the completion of the endorsement of the Mortgage
Notes and the completion of the assignments of the Mortgages, and the
recording thereof, the endorsement of the Mortgage Notes, the delivery to
the Custodian of the completed assignments of the Mortgages, and the
delivery of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser's direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser's direction, to avail
itself of all protection available under applicable law against the claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation
of the Mortgages and the Mortgage Notes by the Company from being
enforceable.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
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