PURCHASE AND SALE AGREEMENT
PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
Depositor
and
IHE FUNDING CORP.
Seller
Dated as of December 6, 1995
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1 Definitions ............................................. 2
ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.1 Agreement to Purchase ................................. 5
Section 2.2 Purchase Price ........................................ 5
Section 2.3 Conveyance of Mortgage Loans; Possession of
Mortgage Files ........................................ 5
Section 2.4 Delivery of Mortgage Loan Documents ................... 6
Section 2.5 Acceptance of Mortgage Loans .......................... 8
Section 2.6 Transfer of Mortgage Loans; Assignment of
Agreement ............................................. 10
Section 2.7 Examination of Mortgage Files ......................... 10
Section 2.8 Books and Records ..................................... 11
Section 2.9 Cost of Delivery and Recordation of Documents ......... 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties as to the Seller........ 12
Section 3.2 Representations and Warranties Relating to the
Mortgage Loans ...................................... 14
Section 3.3 Representations and Warranties of the Depositor ....... 25
Section 3.4 Repurchase Obligation for Defective Docu-
mentation and for Breach of a Representation
or Warranty ........................................... 26
ARTICLE IV
THE SELLER
Section 4.1 Covenants of the Seller ............................... 30
Section 4.2 Merger or Consolidation ............................... 30
Section 4.3 Costs ................................................. 30
Section 4.4 Indemnification ....................................... 31
i
Page
ARTICLE V
CONDITIONS OF CLOSING
Section 5.1 Conditions of Depositor's Obligations ................ 34
Section 5.2 Conditions of Seller's Obligations .................. 36
Section 5.3 Termination of Depositor's Obligations ............... 36
ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices .............................................. 37
Section 6.2 Severability of Provisions ........................... 37
Section 6.3 Agreement of Seller .................................. 37
Section 6.4 Survival ............................................. 37
Section 6.5 Effect of Headings and Table of Contents ............. 38
Section 6.6 Successors and Assigns ............................... 38
Section 6.7 Confirmation of Intent; Grant of Security Interest ... 38
Section 6.8 Miscellaneous ........................................ 39
Section 6.9 Amendments ........................................... 39
Section 6.10 Third-Party Beneficiaries ............................ 39
Section 6.11 GOVERNING LAW; CONSENT TO JURISDIC-
TION; WMVER OF JURY TRIAL ............................ 40
Section 6.12 Execution in Counterparts ............................ 41
Exhibits
Exhibit A - Mortgage Loan Schedule
Exhibit B - Officer's Certificate
Exhibit C - Opinion of Counsel to Seller
ii
This Purchase and Sale Agreement, dated as of December 6, 1995, by and
between Prudential Securities Secured Financing Corporation, a Delaware
corporation, its successors and assigns (the "Depositor"), and IHE Funding
Corp., a Delaware corporation and its successors (the "Seller").
W I T N E S S E T H:
WHEREAS, Exhibit A attached hereto and made a part hereof lists
certain home equity loans secured by mortgages on one- to four-family
residential properties owned by the Seller that the Seller desires to sell to
the Depositor and that the Depositor desires to purchase;
WHEREAS, it is the intention of the Seller and the Depositor
that simultaneously with the Seller's conveyance of the Mortgage Loans (as
defined herein) to Depositor on the Closing Date, (a) the Depositor shall
deposit the Mortgage Loans in a trust (the "Trust") pursuant to a Pooling and
Servicing Agreement to be dated as of December 6, 1995 (the "Pooling and
Servicing Agreement"), to be entered into by and among the Depositor, as
depositor, ▇▇▇▇▇ Home Equity Corporation, as servicer (in such capacity, the
"Servicer") and The Chase Manhattan Bank, N.A., as trustee (the "Trustee") and
(b) the Trustee shall issue certificates evidencing beneficial ownership
interests in the property of the trust fund formed by the Pooling and Servicing
Agreement to the Depositor and, at the request and pursuant to the directions of
the Seller, and in recognition of ▇▇▇▇▇ Union Bank and Trust Company's
continuing obligation to fund the Additional Balances (as defined herein) on the
Mortgage Loans deposited in the Trust, shall issue the Exchangeable Certificate
(as defined herein), representing the beneficial interest in such Additional
Balances on such Mortgage Loans, to ▇▇▇▇▇ Union Bank and Trust Company ("IUB");
WHEREAS, as a matter of convenience and in light of the ultimate
transfer of the Mortgage Notes and the Mortgage Loans securing the obligations
of each Mortgagor under the related Mortgage Notes into the Trust, the Seller
has caused the Mortgage Notes to be endorsed in a manner suitable for the
delivery to the Trustee and has caused the assignment of the Mortgage Loans to
be made directly to the Trustee, without providing or indicating on any
endorsement of the Mortgage Notes or assignment of the Mortgage Loans the
respective interim endorsees or interim assignees, it being understood that the
Trustee shall hold the Mortgage Notes as bailee for the Depositor until the
Purchaser transfers the Mortgage Notes to the Trustee pursuant to the Pooling
and Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used herein, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed thereto in the
Pooling and Servicing Agreement.
"Additional Balance" shall mean any amounts added to the
principal balance of a Mortgage Loan after the Cut-Off Date as a result of the
Mortgagor on the related Mortgage Note exercising the right to borrow additional
amounts under such Mortgage Loan.
"Agreement" means this Purchase and Sale Agreement, as amended
or supplemented in accordance with the provisions hereof.
"Closing Date" shall have the meaning ascribed thereto in
Section 2.1(c) hereof.
"Cut-Off Date Aggregate Principal Balance" means the aggregate
unpaid Principal Balance of the Mortgage Loans as of the Cut-Off Date. The Cut-
Off Date Aggregate Principal Balance is $51,583,721.78.
"Cut-Off Date Principal Balance" means as to each Mortgage Loan,
its unpaid Principal Balance as of the Cut-Off Date.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Index" means, as to any Mortgage Loan, a rate per annum equal
to the highest prime rate published in the "Money Rates" section of The Wall
Street Journal on the last Business Day in the applicable period, or as
otherwise determined in accordance with the related Mortgage Note.
"Interest Adjustment Date" means the date on which the Mortgage
Interest Rate is or may be adjusted with respect to each Mortgage Loan.
"Mortgage Interest Rate" means, as to any Mortgage Loan, the per
annum rate at which interest accrues on the unpaid principal balance thereof, as
adjusted from time to time in accordance with the provisions of the related
Mortgage Note, which rate is (a) prior to the first Interest Adjustment Date for
each such Mortgage Loan occurring after the Cut-Off Date, the initial Mortgage
Interest Rate for such Mortgage Loan indicated on the Mortgage Loan Schedule and
(b) from and after such first Interest Adjustment Date, the sum of the Index
applicable to the most recent Interest Adjustment Date, and the Gross Margin,
rounded as set forth in such Mortgage Note, subject to the Lifetime Cap and the
Lifetime Floor and any applicable statutory maximum interest rate as set forth
in the related Mortgage Note, that may be applicable to such Mortgage Loan at
any time during the life of such Mortgage Loan.
"Mortgage Loans" means (i) the home equity revolving credit line
loans identified on the Mortgage Loan Schedule on the Closing Date, (ii) any
additional such home equity revolving credit line loans identified on the
Mortgage Loan Schedule after the Closing Date, as such schedule is amended and
supplemented from time to time in accordance with the terms of the Pooling and
Servicing Agreement, (iii) each Mortgage Note evidencing any credit line loan
referred to in (i) or (ii) above, including all amounts now or hereafter due
under such Mortgage Notes whether relating to such credit line loans or other
loans which may be made from time to time and (iv) the related Mortgages; in
each case other than payments of interest that accrued on each Mortgage Loan up
to and including the Due Date immediately preceding the applicable cut-off date.
"Mortgage Loan Schedule" shall have the meaning ascribed thereto
in the Pooling and Servicing Agreement. The Mortgage Loan Schedule is attached
hereto as Exhibit A.
"Mortgage Loan Sale Agreement" means the Mortgage Loan Sale
Agreement, dated the date hereof, between IUB, an Indiana banking corporation,
as seller thereunder, and the Seller, as purchaser thereunder.
"Payment Adjustment" means, with respect to any Mortgage Loan
(i) the adjustment of the amount of the Monthly Payment due on the Mortgage Loan
which adjustment may result from the capitalizing of accrued and unpaid interest
on such Mortgage Loan in accordance with the amortization schedule at the time
applicable thereto and (ii) the adjustment of the Monthly Payment due on the
Mortgage Loan which adjustment may result from the conversion, after the first
ten years of the life of the Mortgage Loan, from a Monthly Payment representing
interest only, to a Monthly Payment such that the principal outstanding balance
of the Mortgage Loan will be fully amortized over the remaining life of such
Mortgage Loan.
"Payment Adjustment Date" means, with respect to a Mortgage Loan
the date on which a Payment Adjustment may occur.
"Pooling and Servicing Agreement" shall have the meaning
ascribed thereto in the recitals hereof.
"Prospectus" means the Prospectus dated August 4, 1995 relating
to the offering by the Depositor from time to time of its Pass-Through
Certificates (Issuable in Series) in the form in which it was or will be filed
with the Securities and Exchange Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Certificates.
"Registration Statement" means that certain registration
statement on Form S-3, as amended (Registration No. 33-91148) relating to the
offering by the Depositor from time to time of its Pass-Through Certificates
(Issuable in Series) as heretofore declared effective by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means IHE Funding Corp., in its capacity as Seller of
the Mortgage Loans under this Agreement, and any successor to IHE Funding Corp.,
whether through merger, consolidation, purchase and assumption of IHE Funding
Corp. or all or substantially all of its assets or otherwise.
"Servicer" means ▇▇▇▇▇ Home Equity Corporation, in its capacity
as servicer of the Mortgage Loans and as the Servicer under the Pooling and
Servicing Agreement or any successor appointed pursuant to the Pooling and
Servicing Agreement.
"Termination Event" means the existence of any one or more of
the following conditions:
(a) a stop order suspending the effectiveness of the Registration
Statement shall have been issued or a proceeding for that purpose shall have
been initiated or threatened by the Commission; or
(b) subsequent to the execution and delivery of this Agreement, a
downgrading, or public notification of a possible change, without indication of
direction, shall have occurred in the rating afforded any of the debt securities
or claims paying ability of any person providing any form of credit enhancement
for any of the Certificates, by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act; or
(c) subsequent to the execution and delivery of this Agreement,
there shall have occurred an adverse change in the condition, financial or
otherwise, earnings, affairs, regulatory situation or business prospects of the
Certificate Insurer or the Seller reasonably determined by the Depositor to be
material; or
(d) subsequent to the date of this Agreement there shall have
occurred any of the following: (i) a suspension or material limitation in
trading in securities substantially similar to the Certificates; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the engagement by the United
States in hostilities, or the escalation of such hostilities, or any calamity or
crisis, if the effect of any such event specified in this clause (iii) in the
reasonable judgment of the Depositor makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Certificates on the
terms and in the manner contemplated in the Prospectus Supplement.
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ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.1 Agreement to Purchase. (a) Subject to the
terms and conditions of this Agreement, the Seller hereby sells, conveys,
transfers and assigns and the Depositor hereby purchases, the Mortgage Loans,
it being understood by the parties hereto that the Depositor is transferring all
rights with respect to each Mortgage Loan but the obligation to fund any
Additional Balances on the Mortgage Loans is not transferred hereby, and that
such obligation has been reserved and retained by IUB pursuant to the Mortgage
Loan Sale Agreement.
(b) Subject to Section 2.7, the Depositor and the Seller
have agreed upon which of the Seller's Mortgage Loans are purchased by the
Depositor pursuant to this Agreement, and the Seller has caused IUB to prepare
the Mortgage Loan Schedule. The Mortgage Loan Schedule is attached hereto as
Exhibit A. The Mortgage Loan Schedule shall be amended from time to time to
reflect the addition, or removal of any Additional Balances on the Mortgage
Loans, or in connection with the issuance of any Series of certificates.
(c) The closing for the purchase and sale of the Mortgage
Loans shall take place at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇,
New York, New York, at 10:00 a.m., New York time, on December 6, 1995 or such
other place and time as the parties shall agree (such time being herein referred
to as the "Closing Date").
Section 2.2 Purchase Price. On the Closing Date, as full
consideration for the Seller's sale of the Mortgage Loans and associated rights
to the Depositor, the Depositor will deliver to the Seller: (a) an amount in
cash equal to the sum of 100% of the aggregate principal balance as of the
Closing Date of the Class A Certificates and (b) the Class R Certificate to be
issued pursuant to the Pooling and Servicing Agreement. In recognition of the
IUB's continuing obligation to fund the Additional Balances drawn by the
Mortgagor under the related Mortgage Loan, and pursuant to the Seller's request,
the Depositor shall, pursuant to the Pooling and Servicing Agreement, cause the
Trustee to issue the Exchangeable Certificate, representing the right to receive
payments allocable to the Additional Balances, to IUB.
Section 2.3 Conveyance of Mortgage Loans; Possession of
Mortgage Files. (a) Effective as of the Closing Date, the Seller hereby sells,
transfers, assigns, sets over and conveys to the Depositor, without recourse but
subject to the terms of this Agreement, all right, title and interest in and to
the Mortgage Loans, the insurance policies relating to each such Mortgage Loan,
if any, and all right, title and interest in and to the proceeds of such
insurance policies from and after the Closing Date together with all of its
rights under the Mortgage Loan Sale Agreement.
(b) Upon the sale of such Mortgage Loans, the ownership of
each related Mortgage Note, each related Mortgage and the contents of the
related Mortgage File shall immediately vest in the Depositor and the ownership
of all related records and documents with respect to each Mortgage Loan prepared
by or which come into the possession of the Seller shall immediately vest in the
Depositor. The contents of any Mortgage File in the possession of the Seller at
any time after such sale, and any scheduled payments of principal and interest
on the Mortgage Loans due after the Cut-Off Date and received by the Seller
(excluding any interest on or prior to the Due Date immediately preceding the
Cut-Off Date), shall be held in trust by the Seller for the benefit of the
Depositor as the owner thereof, and shall be promptly delivered by the Seller to
or upon the order of the Depositor.
(c) Pursuant to the Pooling and Servicing Agreement, the
Depositor shall, on the Closing Date, irrevocably transfer, assign, set over and
otherwise convey all of its right, title and interest in and to the applicable
Mortgage Loans, all of its rights (exclusive of any of its obligations) under
this Agreement, and any rights arising under the Mortgage Loan Sale Agreement
assigned to it to the Trustee for the benefit of the Certificateholders, the
holder of the Exchangeable Certificate and of any Additional Certificate and the
Certificate Insurer.
Section 2.4 Delivery of Mortgage Loan Documents. (a) On or
prior to the Closing Date, the Seller shall deliver to the Trustee (as assignee
of the Depositor pursuant to the Pooling and Servicing Agreement), each of the
following documents for each applicable Mortgage Loan:
(i) The original Mortgage Note, endorsed by the
holder of record without recourse in the following form: "Pay to the order of
, without recourse" and signed in the name of the holder of record, and if by
the Seller, by an authorized officer;
(ii) The original Mortgage with evidence of recording
indicated thereon; provided, that if such Mortgage has not been returned from
the applicable recording office, then such recorded Mortgage shall be delivered
when so returned;
(iii) An assignment of the original Mortgage, in
suitable form for recordation in the jurisdiction in which the related Mortgaged
Property is located, in the name of the holder of record of the Mortgage Loan by
an authorized officer (with evidence of submission for recordation of such
assignment in the appropriate real estate recording office for such Mortgaged
Property to be received by the Trustee within 14 days of the Closing Date);
provided, however, that assignments of mortgages shall not be required to be
submitted for recording with respect to any Mortgage Loan if there shall have
been delivered no later than 14 days after the Closing Date an opinion of
counsel in form and substance satisfactory to the Purchaser, the Depositor, the
Trustee, each of the Rating Agencies and the Certificate Insurer stating that,
in such counsel's opinion, the failure to record such assignment shall not have
a materially adverse effect on the security interest of the Depositor or the
Trustee in the Mortgage; provided, further, that any assignment not submitted
for recordation within 14 days of the Closing Date shall be recorded upon the
earlier to occur of (i) receipt by the Trustee of the Certificate Insurer's
written direction to record such Mortgage, (ii) the occurrence of any Event of
Default, as such term is defined in the Pooling and Servicing Agreement, or
(iii) a bankruptcy or insolvency proceeding involving the Mortgagor is initiated
or foreclosure proceedings are initiated against the Mortgaged Property as a
consequence of an event of default under the Mortgage Loan provided, further,
that if the related Mortgage has not been returned from the applicable recording
office, then such assignment shall be delivered when so returned (and a blanket
assignment with respect to such unrecorded Mortgage Loan shall be delivered on
the Closing Date);
(iv) Any intervening assignments of the Mortgage with
evidence of recording thereon;
(v) Any assumption, modification, consolidation or
extension agreements; and
(vi) The policy of title insurance (or a commitment
for title insurance, if the policy is being held by the title insurance company
pending recordation of the Mortgage) and the certificate of primary mortgage
guaranty insurance, if any, issued with respect to such Mortgage Loan, provided,
however, that Mortgage Loans with a principal balance under $15,000 as of the
Cut-Off Date which are in a second lien position and have been submitted for
review of title after July 10, 1995 shall be exempt from this requirement.
(b) In the event that any such Assignment of Mortgage
referred to in clause (a)(iii) above is not in a suitable form for recording or
is lost or, upon an attempt to record such Assignment of Mortgage, is returned
unrecorded because of a defect therein, the Seller shall promptly prepare a
substitute Assignment of Mortgage or cure such defect, as the case may be.
(c) The Seller shall, within five Business Days after the
receipt thereof, and in any event, no later than 120 days after the Closing
Date, deliver or cause to be delivered to the Trustee or its designee (as
assignee of the Depositor pursuant to the Pooling and Servicing Agreement): (i)
the original recorded Mortgage and related power of attorney, if any, in those
instances where a copy thereof certified by the Seller was delivered to the
Trustee (as assignee of the Depositor pursuant to the Pooling and Servicing
Agreement); (ii) the original recorded Assignment of Mortgage from the Seller to
the Trustee (as assignee of the Depositor pursuant to the Pooling and Servicing
Agreement) delivered pursuant to the foregoing clause (a)(iii) above, which,
together with any intervening assignments of Mortgage, evidences a complete
chain of assignment from the originator of the Mortgage Loan to the Trustee in
those instances where copies of such Assignments certified by the Seller were
delivered to the Trustee (as assignee of the Depositor pursuant to the Pooling
and Servicing Agreement); and (iii) the title insurance policy or title opinion
required in clause (a)(vi) above. Notwithstanding anything to the contrary
contained in this Section 2.4, in those instances where the public recording
office retains the original Mortgage, power of attorney, if any, assignment or
Assignment of Mortgage after it has been recorded or such original has been
lost, the Seller shall be deemed to have satisfied its obligations hereunder
upon delivery to the Trustee (as assignee of the Depositor pursuant to the
Pooling and Servicing Agreement) of a copy of such Mortgage, power of attorney,
if any, assignment or Assignment of Mortgage certified by the public recording
office to be a true copy of the recorded original thereof. From time to time
the Seller may forward or cause to be forwarded to the Trustee (as assignee of
the Depositor pursuant to the Pooling and Servicing Agreement) additional
original documents evidencing an assumption or modification of a Mortgage Loan.
(d) All original documents relating to the Mortgage Loans
that are not delivered to the Trustee (as assignee of the Depositor pursuant to
the Pooling and Servicing Agreement) as permitted by this Section 2.4 are and
shall be held by the Seller in trust for the benefit of the Trustee on behalf of
the Certificateholders and the Certificate Insurer. In the event that any such
original document is required pursuant to the terms of this Section 2.4 to be a
part of a Mortgage File, such document shall be delivered promptly to the
Trustee (as assignee of the Depositor pursuant to the Pooling and Servicing
Agreement). From and after the sale of the Mortgage Loans to the Depositor
pursuant hereto, to the extent that the Seller retains legal title of record to
any Mortgage Loans prior to the vesting of legal title in the Trustee (as
assignee of the Depositor pursuant to the Pooling and Servicing Agreement), such
title shall be retained in trust for the Depositor as the owner of the Mortgage
Loans and the Trustee, as the Depositor's assignee.
Section 2.5 Acceptance of Mortgage Loans. (a) Pursuant to
the Pooling and Servicing Agreement, the Trustee has agreed to execute and
deliver on or prior to the Closing Date an acknowledgment of receipt of, for
each Mortgage Loan, the original Mortgage Note with respect to each Mortgage
Loan (with any exceptions noted), in the form attached as Exhibit E to the
Pooling and Servicing Agreement and declares that it will hold such documents
and any amendments, replacements or supplements thereto, as well as any other
assets included in the definition of Trust Fund in the Pooling and Servicing
Agreement and delivered to the Trustee, as Trustee in trust upon and subject to
the conditions set forth in the Pooling and Servicing Agreement for the benefit
of the Certificateholders and the Certificate Insurer. Pursuant to the Pooling
and Servicing Agreement, the Trustee has agreed, for the benefit of the
Certificateholders and the Certificate Insurer, to review (or cause to be
reviewed) each Trustee's Mortgage File within 45 Business Days after the Closing
Date (or, with respect to any Qualified Substitute Mortgage Loan, within 45
Business Days after the receipt by the Trustee thereof) and to deliver to the
initial Certificateholders, the Seller, the Servicer and the Certificate Insurer
a certification in the form attached to the Pooling and Servicing Agreement as
Exhibit F to the effect that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), (i) all documents required to be delivered to it pursuant to the
Pooling and Servicing Agreement are in its possession, and (ii) each such
document has been reviewed by it, has been, to the extent required, executed,
and has not been mutilated, damaged, torn or otherwise physically altered
(handwritten additions, changes or corrections shall not constitute physical
alteration if initialled by the Mortgagor), appears regular on its face and
relates to such Mortgage Loan. Pursuant to the Pooling and Servicing Agreement,
the Trustee shall be under no duty or obligation to inspect, review or examine
any such documents, instruments, certificates or other papers to determine that
they are genuine, enforceable, or appropriate for the represented purpose or
that they are other than what they purport to be on their face. Pursuant to the
Pooling and Servicing Agreement, by December 6, 1996 the Trustee shall be
required to deliver (or cause to be delivered) to the Servicer, the Seller, the
initial Certificateholders and the Certificate Insurer a final certification in
the form attached to the Pooling and Servicing Agreement as Exhibit G to the
effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan specifically
identified in such certification as not covered by such certification), and as
to any document noted in an exception included in the Trustee's initial
certification, (i) all documents required to be delivered to it hereunder and
pursuant to the Pooling and Servicing Agreement are in its possession, and (ii)
each such document has been reviewed by it, has been, to the extent required,
executed, and has not been mutilated, damaged, torn or otherwise physically
altered (handwritten additions, changes or corrections shall not constitute
physical alteration if initialled by the Mortgagor), appears regular on its face
and relates to such Mortgage Loan.
(b) The Pooling and Servicing Agreement provides that, if
the Certificate Insurer or the Trustee during the process of reviewing the
Trustee's Mortgage Files finds any document constituting a part of a Trustee's
Mortgage File which is not executed, has not been received, is unrelated to the
Mortgage Loan identified in the Mortgage Loan Schedule, or does not conform to
the requirements of Section 2.4 or the description thereof as set forth in the
Mortgage Loan Schedule, the Trustee or the Certificate Insurer, as applicable,
shall promptly so notify the Servicer, the Seller, the Certificate Insurer and
the Trustee. The Seller agrees that in performing any such review, the Trustee
may conclusively rely on the Seller as to the purported genuineness of any such
document and any signature thereon. The Seller agrees to use reasonable efforts
to remedy a material defect in a document constituting part of a Mortgage File
of which it is notified. If, however, within 60 days after such notice the
Seller has not remedied the defect and the defect materially and adversely
affects the interest of the Certificateholders in the related Mortgage Loan or
the interests of the Certificate Insurer, then the Seller shall either
substitute in lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan or
purchase such Mortgage Loan in the manner and subject to the conditions set
forth in Section 3.4 hereof, and Section 3.3 of the Pooling and Servicing
Agreement.
(c) The failure of the Trustee or the Certificate Insurer to
give any notice contemplated herein within the time periods specified above
shall not affect or relieve the Seller's obligation to repurchase for any
Mortgage Loan pursuant to this Section 2.5 or Section 3.4 of this Agreement or
the Pooling and Servicing Agreement.
(d) In the event that any Mortgage Note required to be
delivered pursuant to Section 2.4 is conclusively determined by any of the
Seller, the Servicer, the Custodian or the Trustee to be lost, stolen or
destroyed, the Seller shall, within 14 days of the Closing Date, deliver to the
Trustee a "lost note affidavit" in form and substance acceptable to the Trustee,
and shall simultaneously therewith cause the originator of the Mortgage Loan
related to such Mortgage Note to request the obligor on such Mortgage Note to
execute and return a replacement Mortgage Note, and shall further agree to hold
the Purchaser, the Depositor, the Trustee and the Certificate Insurer harmless
from any loss or damage resulting from any action taken in reliance on the
delivery and possession by the Trustee of such lost note affidavit. Upon the
receipt of such replacement Mortgage Note, the Trustee shall return the lost
note affidavit and the Servicer shall have no further indemnification obligation
with respect to such lost note affidavit. The delivery of any such lost note
affidavit shall not affect the obligations of the Seller pursuant to this
Section 2.5 or Section 3.4 of this Agreement.
Section 2.6 Transfer of Mortgage Loans; Assignment of
Agreement. The Seller hereby acknowledges and agrees that the Depositor may
sell, transfer and assign its interest under this Agreement in accordance with
the Pooling and Servicing Agreement to the Trustee as may be required to effect
the purposes of the Pooling and Servicing Agreement, without further notice to,
or consent of, the Seller, and the Trustee shall succeed to such of the rights
and obligations of the Depositor hereunder as shall be so assigned. The
Depositor shall, pursuant to the Pooling and Servicing Agreement, assign all of
its right, title and interest in and to the Mortgage Loans and its right to
exercise the remedies created by Sections 2.5 and 3.4 hereof for breaches of the
representations, warranties, agreements and covenants of the Seller contained in
Sections 2.4, 2.5, 3.1 and 3.2 hereof to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer. The Seller agrees that, upon
such assignment to the Trustee, such representations, warranties, agreements and
covenants will run to and be for the benefit of the Trustee and the Trustee may
enforce, without joinder of the Depositor, the repurchase obligations of the
Seller set forth herein with respect to breaches of such representations,
warranties, agreements and covenants.
Section 2.7 Examination of Mortgage Files. Prior to the
Closing Date, the Seller shall make the Mortgage Files available to the
Depositor or its designee for examination at the Seller's offices or at such
other place as the Seller shall reasonably specify. Such examination may be
made by the Depositor or its designee at any time on or before the Closing Date.
If the Depositor or its designee makes such examination prior to the Closing
Date and identifies any Mortgage Loans that do not conform to the requirements
of the Depositor as described in this Agreement, such Mortgage Loans shall be
deleted from the Mortgage Loan Schedule and may be replaced, prior to the
Closing Date, by substitute Mortgage Loans acceptable to the Depositor. The
Depositor may, at its option and without notice to the Seller, purchase all or
part of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Depositor or the Trustee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the rights of the Depositor or the Trustee to demand repurchase
or other relief as provided in this Agreement.
Section 2.8 Books and Records. The sale of each Mortgage
Loan shall be reflected on the Seller's accounting and other records, balance
sheet and other financial statements as a sale of assets by the Seller to the
Depositor. The Seller shall be responsible for maintaining, and shall cause to
be maintained, a complete set of books and records for each Mortgage Loan which
shall be clearly marked to reflect the ownership of each Mortgage Loan by the
Trustee for the benefit of the Certificateholders and the Certificate Insurer.
Section 2.9 Cost of Delivery and Recordation of Documents.
The costs relating to the delivery and recordation of the documents specified in
this Article II in connection with the Mortgage Loans shall be borne by the
Seller.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties as to the Seller.
The Seller hereby represents and warrants to the Depositor, as of the Closing
Date, that:
(a) The Seller is a Delaware corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all licenses necessary to carry on its business as now being conducted
and is licensed, qualified and in good standing in each state where a Mortgaged
Property is located and is duly licensed and qualified in each state that
requires licensing or qualification in order to conduct business of the type
conducted by the Seller and to perform its obligations as the Seller hereunder,
and in any event the Seller is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related Mortgage Loan;
the Seller has the full power and authority, corporate and otherwise, to execute
and deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Seller; and all requisite corporate action has been taken by
the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;
(b) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement or
the sale of the Mortgage Loans pursuant to the terms of this Agreement or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Closing Date;
(c) Neither the execution and delivery of this Agreement,
the acquisition or origination of the Mortgage Loans by the Seller or the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, has or will conflict with or result in a
breach of any of the terms, conditions or provisions of the Seller's charter or
by-laws or any legal restriction or any agreement or instrument to which the
Seller is now a party or by which it is bound or to which its property is
subject, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject, or impair the
ability of the Trustee (or the Servicer as the agent of the Trustee) to realize
on the Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Neither this Agreement nor the information contained in
the Prospectus Supplement under the captions "Description of the Mortgage Loans"
or "IHE Funding Corp." nor any statement, report or other document prepared by
the Seller and furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement or alleged untrue statement of any material fact or omits to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading;
(e) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Seller, threatened before a court,
administrative agency or government tribunal against the Seller which, either in
any one instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or assets of the
Seller, or in any material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in any material
liability on the part of the Seller, or which would draw into question the
validity of this Agreement, the Mortgage Loans, or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would materially impair the ability of the Seller to perform under the
terms of this Agreement or that might prohibit its entering into this Agreement
or the consummation of any of the transactions contemplated hereby;
(f) The Seller is not in violation of or in default with
respect to, and the execution and delivery of this Agreement by the Seller and
its performance of and compliance with the terms hereof will not constitute a
violation or default with respect to, any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental
agency, which violation or default might have consequences that would materially
and adversely affect the condition (financial or other) or operations of the
Seller or its properties or might have consequences that would materially and
adversely affect its performance hereunder;
(g) Upon the receipt of each Trustee's Mortgage File by the
Depositor under this Agreement, the Depositor will have good title on behalf of
the Trust Fund to each related Mortgage Loan and such other items comprising the
corpus of the Trust Fund free and clear of any lien created by the Seller (other
than liens which will be simultaneously released);
(h) The consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions in effect in any applicable jurisdiction;
(i) With respect to any Mortgage Loan purchased by the
Seller, the Seller acquired title to the Mortgage Loan in good faith, without
notice of any adverse claim not otherwise disclosed to the Depositor;
(j) The Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant contained in
this Agreement. The Seller is solvent and the sale of the Mortgage Loans by the
Seller pursuant to the terms of this Agreement will not cause the Seller to
become insolvent. The sale of the Mortgage Loans by the Seller pursuant to the
terms of this Agreement was not undertaken with the intent to hinder, delay or
defraud any of the Seller's creditors;
(k) The Mortgage Loans are not intentionally selected by the
Seller for sale to the Depositor in a manner so as to affect adversely the
interests of the Depositor or of any transferee of the Depositor (including the
Trustee);
(l) [RESERVED];
(m) The Seller has not dealt with any broker or agent or
anyone else that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans to the Depositor other than to the Depositor
or an affiliate thereof; and
(n) The consideration received by the Seller upon the sale
of the Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans.
Section 3.2 Representations and Warranties Relating to the
Mortgage Loans. The Seller represents and warrants to the Depositor as of the
Closing Date that, as to each Mortgage Loan, immediately prior to the sale and
transfer of such Mortgage Loan by the Seller to the Depositor:
(a) The Mortgage Loans had, as of the Cut-Off Date, an
aggregate Principal Balance equal to $51,583,721.78, and all of the information
set forth in the Mortgage Loan Schedule is complete, true and correct;
(b) All payments required to be made up to the Cut-Off Date
for the Mortgage Loan under the terms of the Mortgage Note have been made and
credited. Unless otherwise specified on the Mortgage Loan Schedule, no payment
required under the Mortgage Loan is more than 30 days delinquent nor has any
payment under the Mortgage Loan been delinquent for more than 30 days more than
once in the 12 months preceding the Cut-Off Date; and the first Monthly Payment
has been made or shall be made, as the case may be, with respect to the Mortgage
Loan on the Due Date or within the grace period;
(c) To the best of Seller's knowledge, there are no defaults
in complying with the terms of the Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing have been paid,
or an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is not yet
due and payable. The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan;
(d) The terms of the Mortgage Note and Mortgage have not
been impaired, waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary to protect the interests of the
Trustee on behalf of the Certificateholders and which has been delivered to the
Trustee. The substance of any such waiver, alteration or modification has been
approved by the title insurer, to the extent required by the policy, and its
terms are reflected on the Mortgage Loan Schedule. No Mortgagor has been
released, in whole or in part, except in connection with an assumption agreement
approved by the title insurer, to the extent required by the policy, and which
assumption agreement is part of the Mortgage File delivered to the Trustee and
the terms of which are reflected in the Mortgage Loan Schedule;
(e) The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, recoupment, counterclaim or defense,
including, without limitation, the defense of usury, and no such right of
rescission, set-off, recoupment, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor was a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;
(f) Pursuant to the terms of the Mortgage, the Mortgaged
Property is subject to fire and casualty insurance with a standard mortgagee
clause and extended coverage in an amount which is not less than the replacement
value of the improvements securing such Mortgage Loan. The fire and casualty
insurance is standard in the industry for property similar (in terms of the
property type, value and location) to the Mortgaged Property. If the Mortgaged
Property is in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available), a flood insurance policy is in effect with
respect to the Mortgaged Property meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the unpaid principal balance of the Mortgage Loan, (ii) the full insurable
value of the Mortgaged Property or (iii) the maximum amount of insurance
available under the Flood Disaster Protection Act of 1973. To the best of
Seller's knowledge, all such insurance policies (collectively, the "hazard
insurance policy") meet the requirements of the current guidelines of the
Federal Insurance Administration, conform to the requirements of the FNMA
Sellers' Guide and the FNMA Servicers' Guide, and are a standard policy of
insurance for the locale where the Mortgaged Property is located. It is
understood and agreed that such insurance is with insurers approved by the
Servicer and that no earthquake or other additional insurance is to be required
of any Mortgagor or to be maintained on property acquired in respect of a
defaulted loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
The hazard insurance policy names (and will name) the Mortgagor as the insured
and contains a standard mortgagee loss payable clause in favor of the IUB, and
its successors and assigns. The Seller has caused and will cause to be
performed any and all acts required to be performed to preserve the rights and
remedies of the Trustee in any hazard insurance policies applicable to the
Mortgage Loans including, without limitation, any necessary notifications of
insurers and assignments of policies or interests therein. The Mortgage
obligates the Mortgagor thereunder to maintain the hazard insurance policy at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
such Mortgagor's cost and expense, and to seek reimbursement therefor from the
Mortgagor; provided, however, that the addition of any such cost shall not be
taken into account for purposes of calculating the principal amount of the
Mortgage Note or the Mortgage Loan secured by the Mortgage Note. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium or the
common facilities of a planned unit development. To the best of Seller's
knowledge, the hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Trustee upon the consummation of the
transactions contemplated by this Agreement. Neither IUB nor the Seller has
engaged in, has knowledge of the Mortgagor's or any subservicer's having engaged
in, any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either. To the best of Seller's knowledge, in connection with the
issuance of the hazard insurance policy, no unlawful fee, commission, kickback
or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller or IUB;
(g) Any and all requirements of any federal, state or local
law, including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the Mortgage Loan have been complied with and the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws;
(h) The Mortgage has not been satisfied, canceled,
subordinated (other than in connection with a refinancing of the first mortgage
on the Mortgaged Property) or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. Neither IUB nor the Seller has
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
(i) The Mortgaged Property is located in the state
identified in the Mortgage Loan Schedule and consists either of a fee simple
estate or, in the case of certain Mortgage Loans secured by Mortgaged Property
located in the State of Illinois, a land trust, in a single parcel of real
property improved by a one- to four-family residential dwelling or a
manufactured dwelling (non-mobile, as defined in the FNMA Selling Guide);
(j) The Mortgage is a valid, subsisting, enforceable and
perfected first or second lien on the Mortgaged Property, including all
buildings on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or annexed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing. The lien of the Mortgage is subject only
to:
(i) in the case of Mortgage Loans in a second
priority lien position, a first mortgage;
(ii) the lien of current real property taxes and
assessments not yet due and payable;
(iii) covenants, conditions and restrictions, rights
of way, easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan; and
(iv) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Except for those Mortgage Loans subject to a first mortgage Lien, any security
agreement, chattel mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid, subsisting
and enforceable first lien and first priority security interest on the property
described therein and immediately prior to the sale of such Mortgage Loan to the
Depositor pursuant to this Agreement, IUB had full right to sell and assign the
same to the Seller and the Seller had full right to sell and assign the same to
the Depositor. As of the date of origination of the Mortgage Loan, the
Mortgaged Property was not subject to a mortgage, deed of trust, deed to secure
debt or other security instrument creating a lien subordinate to the lien of the
Mortgage;
(k) The Mortgage Note and the Mortgage and every other
agreement, if any, executed and delivered by the Mortgagor in connection with
the Mortgage Loan are genuine, and each is the legal, valid and binding
obligation of the maker thereof enforceable in accordance with its terms. All
parties to the Mortgage Note and the Mortgage and any other related agreement
had legal capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note, the Mortgage and such other related agreements, and the
Mortgage Note and the Mortgage and such other related agreements have been duly
and properly executed by such parties. IUB and the Seller have reviewed, or
have caused to be reviewed, all of the documents constituting the Mortgage File
and have made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein;
(l) The Mortgage Loan has been closed and any proceeds of
the Mortgage Loan drawn by the Mortgagor as of the Cut-Off Date have been fully
disbursed and there is no requirement for future advances thereunder (except
that the Mortgagor has the right to make additional drawings thereunder), and
any and all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan and
the recording of the Mortgage were paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Immediately prior to the sale of the Mortgage Loan to
the Depositor under this Agreement, (i) the Seller was the sole owner and holder
of the Mortgage Loan, (ii) the Mortgage Loan was not assigned to any Person
other than the Trustee on behalf of the Trust, or pledged, (iii) the Seller had
good, indefeasible and marketable title thereto, (iv) the Seller had full right
to transfer and sell the Mortgage Loan therein to the Depositor free and clear
of any encumbrance, equity interest, participation interest, lien, pledge,
charge, claim or security interest, and (v) the Seller had full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan to the Depositor under this
Agreement, and following the sale of each Mortgage Loan, the Depositor will own
such Mortgage Loan free and clear of any encumbrance, equity interest,
participation interest, lien, pledge, charge, claim or security interest;
(n) All parties which had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, and including, without
limitation, the Seller and IUB, to the best knowledge of the Seller, are (or,
during the period in which they held and disposed of such interest, were) (i)
in compliance with any and all applicable licensing requirements of the laws of
the state wherein the Mortgaged Property is located to the extent required to
avoid a material adverse effect to the interest of the Trustee on behalf of the
Certificateholders, (ii) (1) organized under the laws of such state, or (2)
qualified to do business in such state, or (3) federal savings and loan
associations, savings banks, or national banks having principal offices in such
state, or (4) not doing business in such state;
(o) The Mortgage Loan has an original Loan-to-Value ratio
(calculated at the time of origination by dividing the outstanding principal
amount of the Mortgage Loan by the appraised value of the Mortgaged Property)
equal to or less than 100%;
(p) Each Mortgage Loan (x) in a first lien position or (y)
having a principal balance of $15,000 or more and which has not been submitted
for a review of title after July 10, 1995, is covered by either (i) an
attorney's opinion of title and abstract of title or (ii) an ALTA lender's title
insurance policy or other generally acceptable form of policy of insurance
issued by a title insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring IUB or the Seller, their successors and
assigns, as to the priority of its lien of the Mortgage in the original
principal amount of the Mortgage Loan, and subject only to the exceptions
contained in clauses (i), (ii), (iii) and (iv) of paragraph (j) above and
against any loss by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
Immediately prior to the sale of the Mortgage Loan to the Depositor under the
terms of this Agreement, the Seller, its successors and assigns were the sole
insureds of such lender's title insurance policy. Such lender's title insurance
policy is in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
Mortgage, including IUB or the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy. In
connection with the issuance of such lender's title insurance policy, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) To the best of Seller's knowledge, there is no default,
breach, violation or event of acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and neither the Seller nor its predecessors
have waived any default, breach, violation or event of acceleration;
(r) To the best of the Seller's knowledge, after reasonable
due diligence, there are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
the law could give rise to such liens) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(s) To the best of Seller's knowledge, all improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property and no improvements on adjoining properties encroach upon the
Mortgaged Property. To the best of Seller's knowledge, no improvement located
on or being part of the Mortgaged Property is in violation of any applicable
zoning law or regulation; provided, that in no event shall a legal nonconforming
use of the Mortgaged Property be considered a violation of any such zoning law
or regulation;
(t) The Mortgage Note is payable on the fifteenth day of
each month. The Mortgage Interest Rate and Monthly Payment are adjusted in
accordance with the terms of the Mortgage Note. All required notices of
interest rate and payment amount adjustments have been sent to the Mortgagor on
a timely basis and the computations of such adjustments were properly
calculated. Installments of interest are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Adjustment Date, with
interest calculated and payable in arrears, sufficient to amortize the Mortgage
Loan fully by the stated maturity date over an original term of twenty years
from the closing date of the Mortgage Loan, however, the first ten years of
payments on the Mortgage Loan are not required to include principal payments but
are required to include at least the current interest due, calculated in
accordance with the applicable Mortgage Interest Rate. With respect to each
Mortgage Loan, the Payment Adjustments will be such that such Mortgage Loan will
fully amortize over twenty years notwithstanding any additions to the principal
balance of the Mortgage Loan due to capitalizing interest. All Mortgage
Interest Rate adjustments and Payment Adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has been
properly paid and credited;
(u) The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on,
or trustee's sale of, the Mortgaged Property pursuant to the proper procedures,
the holder of the Mortgage Loan will be able to deliver good and merchantable
title to the Mortgaged Property. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage
subject to applicable federal and state laws and judicial precedent with respect
to bankruptcy and right of redemption;
(v) To the best of Seller's knowledge, all inspections,
licenses and certificates required to be made are issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including, but not limited to, certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(w) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to in
(j) above;
(x) In the event the Mortgage constitutes a deed of trust, a
trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Trustee out
of the assets of the Trust Fund to the trustee under the deed of trust, except
in connection with a trustee's sale after default by the Mortgagor, provided
that this representation and warranty shall in no way obligate the Trustee to
pay any such amounts;
(y) The Mortgage Note, the Mortgage, the related Assignment
of Mortgage and any other documents required to be delivered by IUB or the
Seller have been delivered to the Trustee in accordance with Section 2.4 and
with Section 2.5(d). The Trustee is in possession of a complete, true and
accurate Mortgage File in accordance with Section 2.3;
(z) The Mortgage contains a provision for the acceleration
of the payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior written
consent of the Mortgagee thereunder, at the option of the Mortgagee;
(aa) Each of the Mortgage and the Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(ab) The Mortgage Loan does not contain provisions pursuant
to which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor, nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(ac) Any future advances or drawings on the Mortgage Loan
made prior to the Cut-Off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to the Depositor. Any such consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(ad) To the best of Seller's knowledge: there is no
proceeding pending or threatened for the total or partial condemnation of the
Mortgaged Property; the Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado, other types of water
damage, or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair; and there have not
been any condemnation proceedings with respect to the Mortgaged Property and the
Seller has no knowledge of any such proceedings in the future;
(ae) The origination and collection practices with respect to
the Mortgage Loan have been, and in all respects are in accordance with Accepted
Servicing Practices, and with all applicable laws and regulations. Any escrow
payments have been collected in full compliance with state and federal law.
Unless prohibited by applicable law, an escrow of funds has been established in
an amount sufficient to pay for every item which remains unpaid and which has
been assessed but is not yet due and payable, and all such escrowed funds are
held in the possession of the Servicer on behalf of the Trustee for the benefit
of the Certificateholders and the holder of the Exchangeable Certificate, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
escrow payments or other charges or payments due IUB or the Seller have been
capitalized under the Mortgage or the Mortgage Note;
(af) The Mortgage File contains an appraisal of the related
Mortgage Property signed prior to the approval of the Mortgage Loan application
by an appraiser acceptable to the Purchaser;
(ag) The Mortgagor has not notified IUB or the Seller, and
the Seller and IUB have no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers' and Sailors' Civil Relief Act of 1940;
(ah) To the best of the Seller's knowledge, there exists no
violation of any local, state, or federal environmental law, rule or regulation
in respect of the Mortgaged Property which violation has or could have a
material adverse effect on the market value of such Mortgaged Property. The
Seller has no knowledge of any pending action or proceeding directly involving
the related Mortgaged Property in which compliance with any environmental law,
rule or regulation is in issue; and, to the best of the Seller's knowledge,
nothing further remains to be done to satisfy in full all requirements of each
such law, rule or regulation constituting a prerequisite to the use and
employment of such Mortgaged Property;
(ai) No Mortgage Loan was made in connection with (i) the
construction of a Mortgaged Property or (ii) facilitating the trade-in or
exchange of a Mortgaged Property;
(aj) Any and all requirements of any federal, state or local
law, including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws, applicable to the Mortgage Loan have been complied with, and
the Seller has and shall maintain in its possession, available for the Trustee's
inspection, and shall deliver to the Trustee upon demand, evidence of compliance
with all such requirements;
(ak) The Mortgage Loans are representative of the mortgage
loans in the Seller's portfolio of adjustable rate home equity lines of credit
secured by one-to-four family properties;
(al) All information regarding the Mortgage Loans which could
reasonably be expected to adversely affect the value or the marketability of any
Mortgaged Property or Mortgage Loan and of which the Seller or IUB is aware has
been provided by the Seller to the Depositor and the Certificate Insurers;
(am) The Mortgage Loan was originated by a mortgagee which is
supervised and examined by a Federal or State authority. The Mortgage Loan was
originated in accordance with the underwriting criteria as described in the
Prospectus Supplement and was underwritten in strict accordance therewith. The
documents, instruments and agreements submitted for loan underwriting were not
falsified by or with the knowledge of the Seller and contain no untrue statement
of material fact and do not omit to state a material fact required to be stated
therein or necessary to make the information and statements therein not
misleading. Neither IUB nor the Seller has made any representations to the
Mortgagor that are inconsistent with the mortgage instruments used;
(an) All amounts, with respect to the Mortgage Loans,
received after the Cut-Off Date and to which the Seller is not entitled, have
been deposited into the Trustee Collection Account;
(ao) To the best of the Seller's knowledge after due inquiry,
there is no delinquent recording or other tax or assessment lien on the Mortgage
Property;
(ap) The Seller has performed or directed the Servicer to
perform any and all acts required to be performed to preserve the rights and
remedies of the Trustee in any insurance policies applicable to the Mortgage
Loan, including, without limitation, any necessary notification of insurers,
assignments of policies (other than the title policy) or interests therein, and
establishment of co-insurer, joint loan payer and mortgagee rights in favor of
the Trustee;
(aq) The Mortgage Loan conforms, and all such Mortgage Loans
in the aggregate conform, to the description thereof set forth in the Prospectus
Supplement;
(ar) [Reserved];
(as) With respect to any Mortgage Loan that is located in any
of the 39 counties in California that have been declared federal disaster areas
due to flooding that has occurred in January, February and March 1995, if the
Seller, acting reasonably, has reason to believe that any Mortgaged Property has
been affected by flooding, the Seller will cause the Servicer to contact the
related obligor regarding the condition of the related property. The Servicer
shall be required to contact the related obligor regarding the condition of such
Mortgaged Property if such obligor shall be five or more days late in making a
payment on the Mortgage Loan;
(at) As of the Cut-Off Date, no more than 0.70% of the
Mortgage Loans will be secured by Mortgaged Properties located within any single
zip code area;
(au) Approximately 0.46% of the outstanding principal balance
of the Mortgage Loans are non-owner occupied or second homes;
(av) Each Mortgage Loan constitutes a Qualified Mortgage, as
defined in the Pooling and Servicing Agreement;
(aw) Each Mortgaged Property does not include cooperatives or
mobile homes attached to a foundation or otherwise and does not constitute other
than real property under state law;
(ax) With respect to each Mortgage Loan, there is only one
originally executed Mortgage Note not stamped as a duplicate;
(ay) There do not exist any circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan;
(az) No statement, report or other document constituting a
part of the Mortgage File contains any untrue statement of fact or omits to
state a fact necessary to make the statements contained therein not misleading;
(ba) At the time of the origination of each Mortgage Loan
that is not a first mortgage loan, the related prior lien was not more than 30
days or more delinquent;
(bb) As of the Closing Date, there is no valid offset,
defense or counterclaim to any Mortgage Loan Agreement or Mortgage, including,
without limitation, any offset, defense, or counterclaim against the obligation
to pay principal and interest in accordance with the Mortgage Loan Agreement;
(bc) As of the Closing Date, each Mortgage Loan and Mortgage
is an enforceable obligation of the related Mortgagor, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited by
general principals of equity (whether considered in a proceeding at law or in
equity); no instrument of release or waiver has been executed in connection with
any Mortgage Loan and no Mortgagor has been released, in whole or in part;
(bd) The Mortgage Loans are not being transferred with any
intent to hinder, delay or defraud any creditors;
(be) As of the Closing Date, the Seller has not received, and
is not aware of, a notice of default of any senior mortgage loan related to a
Mortgaged Property which has not been cured;
(bf) No selection procedure reasonably believed by the Seller
to be materially adverse to the interests of the Certificateholders or the
Certificate Insurer was utilized in selecting the Mortgage Loans; and
(bg) Each Mortgage was recorded, and, except for the blanket
assignments made pursuant to Section 2.3(a)(iii) of the Pooling and Servicing
Agreement, all subsequent assignments of the original Mortgage have been
recorded in the appropriate jurisdictions wherein such recordation is necessary
to perfect the lien thereof as against creditors of the Seller.
Section 3.3 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Seller, as of the
date of execution of this Agreement and the Closing Date, that:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
purchase each Mortgage Loan and to execute, deliver and perform, and to enter
into and consummate all the transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, and, assuming the due authorization,
execution and delivery hereof by the Seller, constitutes the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except such as have been made on or prior to
the Closing Date;
(e) The Depositor has filed or will file the Prospectus and
Prospectus Supplement with the Commission in accordance with Rule 424(b) under
the Securities Act; and
(f) None of the execution and delivery of this Agreement,
the purchase of the Mortgage Loans from the Seller, the consummation of the
other transactions contemplated hereby, or the fulfillment of or compliance with
the terms and conditions of this Agreement, (i) conflicts or will conflict with
the charter or bylaws of the Depositor or conflicts or will conflict with or
results or will result in a breach of, or constitutes or will constitute a
default or results or will result in an acceleration under, any term, condition
or provision of any indenture, deed of trust, contract or other agreement or
other instrument to which the Depositor is a party or by which it is bound and
which is material to the Depositor, or (ii) results or will result in a
violation of any law, rule, regulation, order, judgment or decree of any court
or governmental authority having jurisdiction over the Depositor.
Section 3.4 Repurchase Obligation for Defective
Documentation and for Breach of a Representation or Warranty. (a) Each of the
representations and warranties contained in Sections 3.1 and 3.2 shall survive
the purchase by the Depositor of the Mortgage Loans and the subsequent transfer
thereof by the Depositor to the Trustee and shall continue in full force and
effect, notwithstanding any restrictive or qualified endorsement on the Mortgage
Notes and notwithstanding subsequent termination of this Agreement or the
Pooling and Servicing Agreement.
(b) With respect to any representation or warranty contained
in Section 3.1 or 3.2 hereof that is made to the best of the Seller's knowledge,
if it is discovered by the Servicer, any subservicer, the Trustee, the
Certificate Insurer or any Certificateholder or the holder of the Exchangeable
Certificate that the substance of such representation and warranty was
inaccurate as of the Closing Date and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan, then notwithstanding the
Seller's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made, such inaccuracy shall be deemed a breach of
the applicable representation or warranty. Upon discovery by the Seller, the
Servicer, any subservicer, the Trustee, the Certificate Insurer or any
Certificateholder or the holder of the Exchangeable Certificate of a breach of
any of such representations and warranties which materially and adversely
affects the value of Mortgage Loans or the interest of the Certificateholders or
the holder of the Exchangeable Certificate, or which materially and adversely
affects the interests of the Certificate Insurer, the Certificateholders or the
holder of the Exchangeable Certificate in the related Mortgage Loan in the case
of a representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the Seller's
best knowledge), the party discovering such breach shall, pursuant to Section
3.3 of the Pooling and Servicing Agreement, give prompt written notice to the
others. Subject to the next to last paragraph of this Section 3.4, within 60
days of the earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Seller shall (i) promptly cure such breach in
all material respects, or (ii) purchase such Mortgage Loan at a purchase price
equal to the Principal Balance of such Mortgage Loan as of the date of purchase,
plus the greater of (1) all accrued and unpaid interest on such Principal
Balance and (2) 30 days' interest on such Principal Balance, computed at the
Mortgage Interest Rate, plus the amount of any unreimbursed Servicing Advances
made by the Servicer with respect to such Mortgage Loan, or (iii) cause the
removal of such Mortgage Loan from the Trust Fund (in which case it shall become
a Deleted Mortgage Loan) and substitute one or more Qualified Substitute
Mortgage Loans; provided, that, such substitution is effected not later than the
date which is 2 years after the Startup Day or at such later date, if the
Trustee and the Certificate Insurer receive an Opinion of Counsel to the effect
set forth below in this Section. Any such substitution shall be accompanied by
payment by the Seller of the Substitution Adjustment, if any, to be deposited in
the Collection Account or the Trustee Collection Account pursuant to the Pooling
and Servicing Agreement.
(c) As to any Deleted Mortgage Loan for which the Seller
substitutes, or has caused to be substituted therefor, a Qualified Substitute
Mortgage Loan or Loans, the Seller shall effect, or shall cause to be effected,
such substitution by delivering, or causing the delivery, to the Trustee a
certification in the form attached to the Pooling and Servicing Agreement as
Exhibit H, executed by a Servicing Officer of the Servicer and the documents
described in Section 2.4(a) for such Qualified Substitute Mortgage Loan or
Loans. Pursuant to the Pooling and Servicing Agreement, upon receipt by the
Trustee of a certification of a Servicing Officer of the Servicer of such
substitution or purchase and, in the case of a substitution, upon receipt of the
related Trustee's Mortgage File, and the deposit of certain amounts in the
Trustee Collection Account pursuant to Section 2.4(b) of the Pooling and
Servicing Agreement (which certification shall be in the form of Exhibit H to
the Pooling and Servicing Agreement), the Trustee shall be required to release
to the Servicer for release to the Seller the related Trustee's Mortgage File
and shall be required to execute, without recourse, and deliver such instruments
of transfer furnished by the Seller as may be necessary to transfer such
Mortgage Loan to the Seller.
(d) Pursuant to the Pooling and Servicing Agreement, the
Servicer has agreed to deposit in the Trustee Collection Account all payments
received in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution. Monthly Payments received with respect to
Qualified Substitute Mortgage Loans on or before the date of substitution will
be retained by the Seller. The Trust Fund will own all payments received on the
Deleted Mortgage Loan on or before the date of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. Pursuant to the Pooling and Servicing
Agreement, the Servicer shall be required to give written notice to the Trustee
and the Certificate Insurer that such substitution has taken place and shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of the Pooling and Servicing Agreement and the substitution
of the Qualified Substitute Mortgage Loan. The parties hereto agree to amend
the Mortgage Loan Schedule accordingly. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of the Pooling
and Servicing Agreement and this Agreement in all respects, and the Seller shall
be deemed to have made with respect to such Qualified Substitute Mortgage Loan
or Loans, as of the date of substitution, the representations and warranties set
forth in Sections 3.1 and 3.2 herein. On the date of such substitution, the
Seller will remit, or will cause to be remitted, to the Servicer and pursuant to
the Pooling and Servicing Agreement the Servicer will deposit into the Trustee
Collection Account an amount equal to the Substitution Adjustment, if any.
(e) It is understood and agreed that the obligations of the
Seller set forth in Section 2.5 and this Section 3.4 to cure, purchase or
substitute for a defective Mortgage Loan as provided in Section 2.5 and this
Section 3.4 constitute the sole remedies of the Depositor, the Trustee, the
Certificate Insurer and the Certificateholders and the holder of the
Exchangeable Certificate respecting a breach of the foregoing representations
and warranties (other than the representation and warranty set forth in Section
3.2(g) to the extent of any fines, penalties, costs, or other damages or losses
other than the lost economic value of the Mortgage Loan, the value of which the
remedies provided for in Section 2.5 and 3.4 shall be deemed adequate for).
(f) Any cause of action against the Seller relating to or
arising out of the breach of any representations and warranties or covenants
made in Section 2.5, 3.1, or 3.2 or this Section 3.4 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by any party and notice thereof
to the Seller, (ii) failure by the Seller to cure such breach or purchase or
substitute such Mortgage Loan as specified above, and (iii) demand upon the
Seller by the Trustee for all amounts payable in respect of such Mortgage Loan.
(g) Notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage Loan which is not in default or as to
which no default is imminent, no purchase, or substitution pursuant to Section
2.5(b) or this Section 3.4 shall be made unless the Seller provides to the
Trustee and the Certificate Insurer an Opinion of Counsel to the effect that
such purchase or substitution would not (i) result in the imposition of taxes on
"prohibited transactions" of the REMIC Trust, as defined in Section 860F of the
Code or a tax on contributions to the REMIC Trust under the REMIC Provisions, or
(ii) cause the REMIC Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which purchase or
substitution was delayed pursuant to this paragraph shall be purchased or
substituted (subject to compliance with Section 2.5 and this Section 3.4) upon
the earlier of (1) the occurrence of a default or imminent default with respect
to such loan and (2) receipt by the Trustee and the Certificate Insurer of an
Opinion of Counsel to the effect that such purchase or substitution will not
result in the events described in clauses (i) and (ii) of the preceding
sentence.
(h) Pursuant to the Pooling and Servicing Agreement, upon
discovery by the Seller, the Servicer, the Trustee, the Certificate Insurer or
any Certificateholder or the holder of the Exchangeable Certificate that any
Mortgage Loan does not constitute a Qualified Mortgage, the party discovering
such fact shall promptly (and in any event within 5 days of the discovery) give
written notice thereof to the other parties. In connection therewith, the
Seller shall repurchase or substitute a Qualified Substitute Mortgage Loan for
the affected Mortgage Loan within 60 days of the earlier of such discovery by
any of the foregoing parties, or the Trustee's or the Seller's receipt of
notice, in the same manner as it would a Mortgage Loan for a breach of
representation or warranty contained in Section 3.1 or 3.2. Pursuant to the
Pooling and Servicing Agreement the Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 3.1 or 3.2 hereof.
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ARTICLE IV
THE SELLER
Section 4.1 Covenants of the Seller. The Seller covenants
to the Depositor as follows:
(a) The Seller shall cooperate with the Depositor and the
firm of independent certified public accountants retained with respect to the
issuance of the Certificates in making available all information and taking all
steps reasonably necessary to permit the accountants' letters required hereunder
to be delivered within the times set for delivery herein.
(b) The Seller agrees to satisfy or cause to be satisfied on
or prior to the Closing Date, all of the conditions to the Depositor's
obligations set forth in Section 5.1 hereof that are within the Seller's (or its
agents') control.
(c) The Seller hereby agrees to do all acts, transactions,
and things and to execute and deliver all agreements, documents, instruments,
and papers by and on behalf of the Seller as the Depositor or its counsel may
reasonably request in order to consummate the transfer of the Mortgage Loans to
the Depositor and the subsequent transfer thereof to the Trustee, and the
rating, issuance and sale of the Certificates.
Section 4.2 Merger or Consolidation. The Seller will keep
in full effect its existence, rights and franchises as a corporation and will
obtain and preserve its qualification to do business as a foreign corporation,
in each jurisdiction necessary to protect the validity and enforceability of
this Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Section 4.3 Costs. In connection with the transactions
contemplated under this Agreement and the Pooling and Servicing Agreement, the
Seller shall promptly pay or cause the Servicer to pay (or shall promptly
reimburse the Depositor to the extent that the Depositor shall have paid or
otherwise incurred):
(a) the fees and disbursements of the transaction counsel,
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇;
(b) the initial (but not ongoing) fees of Standard & Poor's
Ratings Services and ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) any of the fees of the Trustee as provided in the letter
from the Trustee to the Depositor and the Servicer dated as of December 4, 1995
to the extent such fees are not paid pursuant to Section 6.5 of the Pooling and
Servicing Agreement, the fees and disbursements of the Trustee's counsel, if
any, the fees and expenses of the institution (which may, but need not, be the
Servicer or the Trustee) selected as calculating agent and the fees of the
Trustee for custodial acceptance and loan deposit;
(d) expenses incurred in connection with printing the
Prospectus Supplement, any amendment or supplement thereto, any preliminary
prospectus and the Certificates;
(e) fees and expenses relating to the filing of documents
with the Securities and Exchange Commission (including, without limitation,
periodic reports under the Exchange Act and registration fees for the issuance
of the Certificates);
(f) [Reserved];
(g) all of the initial expenses of the Certificate Insurer,
including, without limitation, legal fees and expenses, accountant fees and
expenses and expenses in connection with due diligence conducted on the Mortgage
Files; and
(h) (without duplication to clause (c) hereof) the Trustee's
fees and expenses, including, without limitation, all of the Trustee's fees and
expenses in connection with any actions taken by the Trustee pursuant to Section
9.2(a)(v) of the Pooling and Servicing Agreement.
For the avoidance of doubt, the parties hereto acknowledge that it is the
intention of the parties that the Depositor shall not pay any of the Trustee's
fees and expenses in connection with the transactions contemplated by the
Pooling and Servicing Agreement. All other costs and expenses in connection
with the transactions contemplated hereunder shall be borne by the party
incurring such expenses.
Section 4.4 Indemnification. (a) (i) The Seller agrees to
indemnify and hold harmless the Depositor, each of its directors, each of its
officers who have signed the Registration Statement, and each of its directors
and each person or entity who controls the Depositor or any such person, within
the meaning of Section 15 of the Securities Act, against any and all losses,
claims, damages or liabilities, joint and several, to which the Depositor or any
such person or entity may become subject, under the Securities Act or otherwise,
and will reimburse the Depositor and each such controlling person for any legal
or other expenses incurred by the Depositor or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Prospectus
Supplement or any amendment or supplement to the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements in the Prospectus Supplement
or any amendment or supplement to the Prospectus Supplement approved in writing
by the Seller, in light of the circumstances under which they were made, not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission relates to the information contained
in the Prospectus Supplement referred to in Section 3.1(d) hereof. This
indemnity agreement will be in addition to any liability which the Seller may
otherwise have.
(ii) The Seller agrees to indemnify and to hold the Depositor
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Depositor may sustain in any way related to the failure of the Seller
to perform its duties in compliance with the terms of this Agreement. The
Seller shall immediately notify the Depositor if a claim is made by a third
party with respect to this Agreement, and the Seller shall have the right to
assume the defense of any such claim and will pay or cause to be paid all
expenses in connection therewith, including reasonable counsel fees, and will
promptly pay or cause to be paid, discharged and satisfied any judgment or
decree which may be entered against the Depositor in respect of such claim.
Pursuant to the Pooling and Servicing Agreement, the Trustee shall reimburse the
Seller in accordance with the Pooling and Servicing Agreement for all amounts
advanced by the Seller pursuant to the preceding sentence except when the claim
relates directly to the failure of the Seller to perform its duties in
compliance with the terms of this Agreement.
(b) The Depositor agrees to indemnify and hold harmless the
Seller, each of its directors and each person or entity who controls the Seller
or any such person, within the meaning of Section 15 of the Securities Act,
against any and all losses, claims, damages or liabilities, joint and several,
to which the Seller or any such person or entity may become subject, under the
Securities Act or otherwise, and will reimburse the Seller and any such director
or controlling person for any legal or other expenses incurred by the Seller or
any such director or controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) (i) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Prospectus, the
Prospectus Supplement, any amendment or supplement to the Prospectus or the
Prospectus Supplement or the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than a statement or omission
relating to the information set forth in subsection (a)(i) of this Section 4.4.
This indemnity agreement will be in addition to any liability which the
Depositor may otherwise have or (ii) result directly from a determination that
the Trust will not be treated as a REMIC and the Class A Certificates will not
be treated as "regular interests" in such REMIC.
(c) Promptly after receipt by an indemnified party under
this Section 4.4 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 4.4, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent such
indemnifying party has been prejudiced thereby. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying
party to such indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party under this
Section 4.4 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. The indemnifying party shall not be liable for
the expenses of more than one separate counsel.
(d) In order to provide for just and equitable contribution
in circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 4.4 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
subsection (b) of this Section 4.4 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof); provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by the Seller on the one hand, and the
Depositor on the other, the Seller's and the Depositor's relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or omission, and
any other equitable considerations appropriate in the circumstances. The Seller
and the Depositor agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation. For purposes
of this Section 4.4, each director of the Depositor, each officer of the
Depositor who signed the Registration Statement, and each person, if any who
controls the Depositor within the meaning of Section 15 of the Securities Act,
shall have the same rights to contribution as the Depositor, and each director
of the Seller, and each person, if any who controls the Seller within the
meaning of Section 15 of the Securities Act, shall have the same rights to
contribution as the Seller.
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ARTICLE V
CONDITIONS OF CLOSING
Section 5.1 Conditions of Depositor's Obligations. The
obligations of the Depositor to purchase the Mortgage Loans will be subject to
the satisfaction on the Closing Date of the following conditions. Upon payment
of the purchase price for the Mortgage Loans, such conditions shall be deemed
satisfied or waived.
(a) Each of the obligations of the Seller required to be
performed by it on or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of the Seller under this Agreement shall be true
and correct as of the Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default under this Agreement,
and the Depositor shall have received a certificate to the effect of the
foregoing signed by an authorized officer of the Seller.
(b) The Depositor shall have received a letter dated the
date of this Agreement, in form and substance acceptable to the Depositor and
its counsel, prepared by Coopers & ▇▇▇▇▇▇▇, independent certified public
accountants, regarding the numerical information contained in the Prospectus
Supplement.
(c) The Mortgage Loans will be acceptable to the Depositor,
in its sole discretion.
(d) The Depositor shall have received the following
additional closing documents, in form and substance satisfactory to the
Depositor and its counsel:
(i) the Mortgage Loan Schedule and an executed
receipt acknowledging delivery of the Mortgage Loans to the Trustee;
(ii) the Pooling and Servicing Agreement dated as of
December 6, 1995 and the Underwriting Agreement dated as of December 1, 1995
between the Depositor and Prudential Securities Incorporated and all documents
required thereunder, duly executed and delivered by each of the parties thereto
other than the Depositor;
(iii) an officer's certificate, dated as of the
Closing Date, in the form of Exhibit B hereto, and attached thereto resolutions
of the board of directors of the Seller and a copy of the charter and by-laws of
the Seller;
(iv) copy of the Seller's charter and all amendments,
revisions, and supplements thereof, certified by the Secretary of the Seller;
(v) an opinion of the counsel for the Seller as to
various corporate matters substantially in the form attached hereto as Exhibit C
(it being agreed that the opinion shall expressly provide that the Trustee shall
be entitled to rely on the opinion);
(vi) opinions of counsel for the Seller, in forms
acceptable to the Depositor, its counsel, S&P and Moody's as to such matters as
shall be required for the assignment of a rating to the Class A Certificates of
AAA by S&P's Ratings Services and Aaa by ▇▇▇▇▇'▇ Investors Service, Inc. (it
being agreed that such opinions shall expressly provide that the Trustee shall
be entitled to rely on such opinions);
(vii) a letter from Moody's that it has assigned a
rating of Aaa to the Class A Certificates;
(viii) a letter from S&P that it has assigned a rating
of AAA to the Class A Certificates;
(ix) an opinion of counsel for the Trustee in form
and substance acceptable to the Depositor, its counsel, Moody's and S&P (it
being agreed that the opinion shall expressly provide that the Seller shall be
entitled to rely on the opinion);
(x) an opinion or opinions of counsel for the
Servicer, in form and substance acceptable to the Depositor, its counsel,
Moody's and S&P (it being agreed that the opinion shall expressly provide that
the Seller shall be entitled to rely on the opinion);
(xi) an opinion or opinions of counsel for the
Certificate Insurer, in each case in form and substance acceptable to the
Depositor, its counsel, Moody's and S&P (it being agreed that the opinion shall
expressly provide that the Seller shall be entitled to rely on the opinion); and
(xii) [Reserved].
(e) The Certificate Insurance Policy shall have been duly
executed, delivered and issued with respect to the Certificates.
(f) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
satisfactory in form and substance to the Depositor and its counsel.
(g) The Seller shall have furnished the Depositor with such
other certificates of its officers or others and such other documents or
opinions as the Depositor or its counsel may reasonably request.
Section 5.2 Conditions of Seller's Obligations. The
obligations of the Seller under this Agreement shall be subject to the
satisfaction, on the Closing Date, of the following conditions:
(a) Each of the obligations of the Depositor required to be
performed by it at or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of the Depositor contained in this Agreement
shall be true and correct as of the Closing Date and the Seller shall have
received a certificate to that effect signed by an authorized officer of the
Depositor.
(b) The Seller shall have received the following additional
documents:
(i) the Pooling and Servicing Agreement, and all
documents required thereunder, in each case executed by the Depositor as
applicable; and
(ii) a copy of a letter from Moody's to the Depositor
to the effect that it has assigned a rating of Aaa to the Class A Certificates
and a copy of a letter from S&P to the Depositor to the effect that it has
assigned a rating of AAA to the Class A Certificates.
(c) The Seller shall have received an executed receipt,
acknowledging the delivery of the Mortgage Loans and the Mortgage Loan Schedule
to the Trustee.
(d) The Depositor shall have furnished the Seller with such
other certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Agreement as the Seller
may reasonably request.
Section 5.3 Termination of Depositor's Obligations. The
Depositor may terminate its obligations hereunder by notice to the Seller at any
time before delivery of and payment of the purchase price for the Mortgage Loans
if: (a) any of the conditions set forth in Section 5.1 are not satisfied when
and as provided therein; (b) there shall have been the entry of a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller, or for the winding up or
liquidation of the affairs of the Seller; (c) there shall have been the consent
by the Seller to the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller or of or relating to
substantially all of the property of the Seller; (d) any purchase and assumption
agreement with respect to the Seller or the assets and properties of the Seller
shall have been entered into; or (e) a Termination Event shall have occurred.
The termination of the Depositor's obligations hereunder shall not terminate the
Depositor's rights hereunder or its right to exercise any remedy available to it
at law or in equity.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered to or mailed by registered mail, postage
prepaid, or transmitted by telex or telegraph and confirmed by a similar mailed
writing, if to the Depositor, addressed to the Depositor at Prudential
Securities Secured Financing Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, or to such other address as
the Depositor may designate in writing to the Seller and if to the Seller,
addressed to the Seller c/▇ ▇▇▇▇▇ Financial Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ Attention ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, with a copy to be
provided simultaneously to ▇▇▇▇▇ Home Equity Corporation, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, or to such
other address as the Seller may designate in writing to the Depositor.
Section 6.2 Severability of Provisions. Any part,
provision, representation, warranty or covenant of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation, warranty or
covenant of this Agreement which is prohibited or unenforceable or is held to be
void or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction. To
the extent permitted by applicable law, the parties hereto waive any provision
of law which prohibits or renders void or unenforceable any provision hereof.
Section 6.3 Agreement of Seller. The Seller agrees to
execute and deliver such instruments and take such actions as the Depositor may,
from time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement.
Section 6.4 Survival. The parties to this Agreement agree
that the representations, warranties and agreements made by each of them herein
and in any certificate or other instrument delivered pursuant hereto shall be
deemed to be relied upon by the other party hereto, notwithstanding any
investigation heretofore or hereafter made by such other party or on such other
party's behalf, and that the representations, warranties and agreements made by
the parties hereto in this Agreement or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans.
Section 6.5 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 6.6 Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as expressly permitted by
the terms hereof, this Agreement may not be assigned, pledged or hypothecated by
any party hereto to a third party without the written consent of the other party
to this Agreement and the Certificate Insurer; provided, however, that the
Depositor may assign its rights hereunder without the consent of the Seller.
Section 6.7 Confirmation of Intent; Grant of Security
Interest. It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Seller to the Depositor as contemplated by this
Purchase and Sale Agreement be, and be treated for all purposes as, a sale by
the Seller to the Depositor of the Mortgage Loans. It is, further, not the
intention of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Seller to the Depositor to secure a debt or other obligation of the
Seller. However, in the event that, notwithstanding the intent of the parties,
the Mortgage Loans are held to continue to be property of the Seller then (a)
this Purchase and Sale Agreement shall also be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the Uniform Commercial Code; (b) the
transfer of the Mortgage Loans provided for herein shall be deemed to be a grant
by the Seller to the Depositor of, and the Seller hereby does grant, a security
interest in all of the Seller's right, title and interest in and to the Mortgage
Loans and all amounts payable on the Mortgage Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property to secure a loan
from the Depositor in the amount equal to the purchase price described in
Section 2.2 hereof; (c) the possession by the Depositor of Mortgage Notes and
such other items of property as constitute instruments, money, negotiable
documents or chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-305 of the Uniform Commercial Code; and (d) notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or agents (as
applicable) of the Depositor for the purpose of perfecting such security
interest under applicable law. Any assignment of the interest of the Depositor
pursuant to any provision hereof shall also be deemed to be an assignment of any
security interest created hereby. The Seller and the Depositor shall, to the
extent consistent with this Purchase and Sale Agreement, take such actions as
may be necessary to ensure that, if this Purchase and Sale Agreement were deemed
to create a security interest in the Mortgage Loans, such security interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of this
Agreement.
Section 6.8 Miscellaneous. This Agreement supersedes all
prior agreements and understandings relating to the subject matter hereof.
Section 6.9 Amendments. (a) This Agreement may be amended
from time to time by the Seller and the Depositor by written agreement, upon the
prior written consent of the Certificate Insurer (which consent shall not be
withheld if, in the Opinion of Counsel addressed to the Trustee and the
Certificate Insurer, failure to amend would adversely affect the interests of
the Certificateholders, unless such amendment would adversely affect the
interests of the Certificate Insurer), without notice to or consent of the
Certificateholders to cure any ambiguity, to correct or supplement any
provisions herein, to comply with any changes in the Code, or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel, at
the expense of the party requesting the change, delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder;
and provided, further, that no such amendment shall reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, or change the rights or obligations of any other party
hereto without the consent of such party.
(b) This Agreement may be amended from time to time by the
Seller and the Depositor with the consent of the Certificate Insurer (which
consent shall not be withheld if, in the Opinion of Counsel addressed to the
Trustee and the Certificate Insurer, failure to amend would adversely affect the
interests of the Certificateholders, unless such amendment would adversely
affect the interests of the Certificate Insurer), the Majority
Certificateholders and the Holders of the majority of the Percentage Interest in
the Class R Certificates for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders; provided, however, that no
such amendment shall be made unless the Trustee receives an Opinion of Counsel,
at the expense of the party requesting the change, that such change will not
adversely affect the status of the REMIC Trust as a REMIC or cause a tax to be
imposed on the REMIC; and provided, further, that no such amendment shall reduce
in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate or reduce the percentage for each
Class the Holders of which are required to consent to any such amendment without
the consent of the Holders of 100% of each Class of Certificates affected
thereby.
(c) It shall not be necessary for the consent of Holders
under this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.
Section 6.10 Third-Party Beneficiaries. The parties agree
that each of the Certificate Insurer and the Trustee is an intended third-party
beneficiary of this Agreement to the extent necessary to enforce the rights and
to obtain the benefit of the remedies of the Depositor under this Agreement
which are assigned to the Trustee for the benefit of the Certificateholders and
the Certificate Insurer pursuant to the Pooling and Servicing Agreement and to
the extent necessary to obtain the benefit of the enforcement of the obligations
and covenants of the Seller under Sections 4.1 and 4.4(a)(ii) of this Agreement.
The parties further agree that Prudential Securities Incorporated and each of
its directors and each person or entity who controls Prudential Securities
Incorporated or any such person, within the meaning of Section 15 of the
Securities Act (each, an "Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary to obtain the benefit of
the enforcement of the obligations and covenants of the Seller with respect to
each Underwriter Entity under Section 4.4(a)(i) of this Agreement.
Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
(b) THE DEPOSITOR AND THE SELLER EACH HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED
STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND
EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT
ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS
SET FORTH IN SECTION 6.1 OF THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED
TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S.
MAILS, POSTAGE PREPAID. THE DEPOSITOR AND THE SELLER EACH HEREBY WAIVE ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE DEPOSITOR AND THE SELLER TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT EITHER'S RIGHT TO BRING ANY ACTION
OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.
(c) THE DEPOSITOR AND THE SELLER EACH HEREBY WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN
CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
Section 6.12 Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties to this Purchase and Sale
Agreement have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION, as Depositor
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
IHE FUNDING CORP., as Seller
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President & Treasurer
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On December 6, 1995 before me, the undersigned, a Notary Public
in and for said County and State, personally appeared ▇▇▇▇ ▇▇▇▇▇▇, personally
known to me (or proved to me on the basis of satisfactory evidence) to be Vice
President [title] of Prudential Securities Secured Financing Corporation, a
Delaware corporation, the corporation that executed the within Purchase and Sale
Agreement on behalf of said corporation, and acknowledged to me that said
corporation executed it.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Notary Public
My Commission expires: July 18, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.
COUNTY OF NEW YORK )
On December 6, 1995 before me, the undersigned, a Notary Public
in and for said County and State, personally appeared ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be Vice President & Treasurer [title] of IHE Funding Corp., the entity that
executed the within Purchase and Sale Agreement; on behalf of said corporation,
and acknowledged to me that said corporation executed it.
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Notary Public
My Commission expires: July 18, 1996