EXHIBIT 10.1
EXECUTION COPY
FIRST UNION NATIONAL BANK
as Seller,
RAFC TRANSFEROR TRUST
as Transferor,
FIRST UNION NATIONAL BANK
as Certificate Administrator
and
CITIBANK, N.A
as Trustee
LOAN PURCHASE AGREEMENT
Dated as of November 30, 2001
Fixed Rate Mortgage Loans
RAFC Asset-Backed Trust, Series 2001-1
RAFC Asset-Backed Certificates, Series 2001-1
Table of Contents
Page
ARTICLE I.........................................................................................................1
DEFINITIONS.......................................................................................................1
Section 1.01 Definitions..................................................................................1
ARTICLE II........................................................................................................2
Section 2.01 Sale of the Loans.............................................................................2
ARTICLE III.......................................................................................................5
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH...............................................................5
Section 3.01 Seller's Representations and Warranties.......................................................5
Section 3.02 Individual Mortgage Loans.....................................................................6
Section 3.03 Transferor Representations and Warranties....................................................15
ARTICLE IV.......................................................................................................16
SELLER'S COVENANTS...............................................................................................16
Section 4.01 Covenants of the Seller......................................................................16
Section 4.02 Payment of Expenses..........................................................................17
ARTICLE V........................................................................................................18
CONDITIONS TO LOAN PURCHASE......................................................................................18
Section 5.01 Conditions of Transferor's Obligations.......................................................18
ARTICLE VI INDEMNIFICATION BY SELLER WITH RESPECT TO THE LOANS..................................................18
Section 6.01 Indemnification With Respect to the Loans....................................................18
Section 6.02 Limitation on Liability of Seller............................................................19
ARTICLE VII......................................................................................................19
TERMINATION......................................................................................................19
Section 7.01 Termination..................................................................................19
ARTICLE VIII.....................................................................................................20
MISCELLANEOUS PROVISIONS.........................................................................................20
Section 8.01 Amendment....................................................................................20
Section 8.02 Governing Law................................................................................21
This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of New
York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance
with such laws............................................................................................21
Section 8.03 Notices......................................................................................21
Section 8.04 Severability of Provisions...................................................................22
Section 8.05 Relationship of Parties......................................................................22
Section 8.06 Counterparts.................................................................................22
Section 8.07 Further Agreements...........................................................................22
Section 8.08 Intention of the Parties.....................................................................23
Section 8.09 Successors and Assigns; Assignment of Purchase Agreement.....................................23
8.10 Survival.......................................................................................23
8.11 Liability of the Trustee.......................................................................23
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THIS LOAN PURCHASE AGREEMENT (this "Purchase Agreement"), dated as of
November 30, 2001, is made among First Union National Bank in its capacity as
Seller (the "Seller"), RAFC Transferor Trust, a Delaware business trust (the
"Transferor"), First Union National Bank in its capacity as the certificate
administrator (the "Certificate Administrator") and Citibank, N.A. (the
"Trustee").
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the terms of this Purchase Agreement, the
Seller will sell the Loans to the Transferor on the Closing Date;
WHEREAS, pursuant to the terms of the Pooling and Servicing
Agreement, the Transferor will transfer the Loans, and assign all of its rights
under this Purchase Agreement to Residential Asset Funding Corporation, which
will in turn transfer them to the Trustee, without recourse, on the Closing
Date;
WHEREAS, pursuant to the terms of the Pooling and Servicing
Agreement, the Trustee will issue the Certificates as directed by the
Transferor;
WHEREAS, pursuant to the terms of the Underwriting Agreement,
the Transferor will sell the Underwritten Certificates to the Underwriters; and
WHEREAS, pursuant to the terms of the Pooling and Servicing
Agreement, the Servicer will service the Loans.
NOW, THEREFORE, the parties hereto do agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
-----------
For all purposes of this Purchase Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions contained in Section 1.01 of the Pooling and
Servicing Agreement, dated as of November 30, 2001, among the Certificate
Administrator, the Trustee, the Transferor and First Union National Bank as
Sub-Servicer, HomeEq Servicing Corporation as Servicer, which is incorporated by
reference herein. All other capitalized terms used herein shall have the
meanings specified herein.
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ARTICLE II
SALE OF LOANS
Section 2.01 Sale of the Loans.
-----------------
(a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys without recourse to the Transferor on the Closing Date all of
the Seller's right, title and interest in the Loans as such are identified on
the Schedule annexed hereto as Exhibit 1, and the proceeds thereof (including
the related Mortgage Files) (the "Loans"). The Loans will have an aggregate
Principal Balance as of the close of business on the Cut-off Date, after giving
effect to any payments due on or before such date whether or not received, of
approximately $889,185,900.18. The sale of the Loans will take place on the
Closing Date, subject to and simultaneously with the deposit of the Loans into
the Trust Fund, the issuance of the Certificates by the Trustee and the sale of
the Underwritten Certificates pursuant to the Underwriting Agreement. The
purchase price (the "Purchase Price") for the Loans to be paid by the Transferor
to the Seller on the Closing Date shall consist of the following:
(i) a payment in an amount equal to $137,837,325.50
representing a portion of the net proceeds of the sale of the Underwritten
Certificates, which payment shall be paid to the Seller by wire transfer in
immediately available funds on the Closing Date by or on behalf of the
Transferor, or as otherwise agreed by the Transferor; and
(ii) to [specify entity] [specify classes and balances of
retained certificates].
(b) In connection with such conveyance by the Seller, the Seller shall
at the direction of the Transferor deliver to, and deposit with the Custodian on
behalf of the Trustee, on or before the Closing Date, the following documents or
instruments with respect to each Loan (the "Mortgage File"):
(i) the original Mortgage Note, endorsed "Pay to the order of
holder" or "Pay to the order of Citibank, N.A., as Trustee of the RAFC
Asset-Backed Trust 2001-1, relating to the RAFC Asset-Backed Securities, Series
2001-1" and signed, by facsimile or manual signature, in the name of the Person
delivering the note by a Responsible Officer, with all prior and intervening
endorsements showing a complete chain of endorsement from the originator to such
Person, or with respect to any lost Mortgage Note, an original Lost Note
Affidavit, together with a copy of the related Mortgage Note and;
(ii) either: (1) the original Mortgage, with evidence of
recording thereon, (2) a copy of the Mortgage certified as a true copy by a
Responsible Officer of the Seller where the original has been transmitted for
recording until such time as the original is returned by the public recording
office or (3) a copy of the Mortgage certified by the public recording office in
those instances where the original recorded Mortgage has been lost;
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(iii) either: (1) the original assignment of the Mortgage from
the Person delivering such Assignment to " Citibank, N.A., as Trustee of the
RAFC Asset-Backed Trust 2001-1, relating to the RAFC Asset-Backed Securities,
Series 2001-1" with evidence of recording thereon (provided, however, that where
permitted under the laws of the jurisdiction wherein the Mortgaged Property is
located, the assignment of Mortgage may be effected by one or more blanket
assignments for Mortgage Loans secured by Mortgaged Properties located in the
same county), (also provided, however, that the Person delivering such
assignment shall not be required to record an assignment of a Mortgage if such
Person furnishes to the Trustee on or before the Closing Date, at the Person's
expense, an opinion of counsel with respect to the relevant jurisdiction that
such recording is not necessary to perfect the Trustee's interest in the related
Mortgage Loans (in form and substance and from counsel satisfactory to the
Rating Agencies)). Notwithstanding the delivery of opinions specified above, the
Trustee shall cause to be recorded each assignment of a Mortgage upon the
earlier to occur of (a) the removal of the Servicer pursuant to the Pooling and
Servicing Agreement or (b) written notification to the Trustee, of the
occurrence of a foreclosure, bankruptcy or insolvency relating to the applicable
Mortgagor; or (2) a copy of such assignment of Mortgage certified as a true copy
by a Responsible Officer of the Seller where the original has been transmitted
for recording (provided, however, that where the original assignment of Mortgage
is not being delivered to the Custodian, each such Responsible Officer of the
Seller may complete one or more blanket certificates attaching copies of one or
more assignments of Mortgage relating to the Mortgages originated by the
Seller);
(iv) (1) the original policy of title insurance or, if such
policy has not yet been delivered by the insurer, the commitment or binder to
issue same, or if the original principal balance of the Mortgage Loan was less
than or equal to $15,000 or the Mortgage Loan was not originated by the Seller,
other evidence of the status of title, which shall consist of an attorney's
opinion of title or certificate of title, a preliminary title report, a property
search, a title search, a lot book report, a property information report or a
report entitled "prelim" or "PIRT" (property information report), and (ii) proof
of hazard insurance in the form of a hazard insurance policy or hazard insurance
policy endorsement that names the Seller, its successors and assigns, as a
mortgagee/loss payee, and, if such endorsement does not show the amount insured
by the related hazard insurance policy, some evidence of such amount;
(v) with respect to any intervening assignments, if
applicable, either: (i) originals of all intervening assignments, if any,
showing a complete chain of title from the originator to the Person delivering
such assignment, including warehousing assignments, with evidence of recording
thereon if such assignments were recorded, (ii) copies of any assignments
certified as true copies by a Responsible Officer of the Seller where the
originals have been submitted for recording until such time as the originals are
returned by the public recording officer, or (iii) copies of any assignments
certified by the public recording office in any instances where the original
recorded assignments have been lost;
(vi) originals of all assumption and modification agreements,
if any; and Except with respect to certain Loans with original principal
balances of less than $15,000, the appraisal made in connection with the
origination of the related Loan with photographs of the subject property and of
comparable properties (if available), constituting evidence sufficient to
indicate that the Mortgaged Property relates to a Residential Dwelling (or, with
respect to Multifamily Loans, a Multifamily Property) and identifying the type
thereof.
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If a material defect in any Mortgage File is discovered which
may materially and adversely affect the value of the related Loan, or the
interests of the Trustee (as pledgee of the Loans), or the Certificateholders in
such Loan, including if any document required to be delivered to the Certificate
Administrator has not been delivered (provided that a Mortgage File will not be
deemed to contain a defect for an unrecorded assignment under clause (i) above
for 180 days following submission of the assignment if the Seller has submitted
such assignment for recording pursuant to the terms of the following paragraph),
the Seller shall cure such defect, repurchase the Loans that relate to such Loan
at the Repurchase Price [or substitute Loans in an Eligible Substitute Mortgage
Loan for the related Loan upon the same terms and conditions set forth in
Section 3.02 hereof] for breaches of representations and warranties.
Promptly after the Closing Date, the Seller at its own expense
shall complete and submit for recording in the appropriate public office for
real property records each of the assignments referred to in clause (i) above,
with such assignment completed in favor of the Trustee. While such assignment to
be recorded is being recorded, the Certificate Administrator shall retain a
photocopy of such assignment. If any assignment is lost or returned unrecorded
to the Certificate Administrator because of any defect therein, the Seller is
required to prepare a substitute assignment or cure such defect, as the case may
be, and the Seller shall cause such substitute assignment to be recorded in
accordance with this paragraph.
In instances where an original Mortgage or any original
intervening assignment of Mortgage is not, in accordance with clause (ii) or
(iv) above, delivered by the Seller to the Certificate Administrator, on behalf
of the Trustee, prior to or on the Closing Date the Seller will deliver or cause
to be delivered the originals of such documents to the Certificate
Administrator, on behalf of the Trustee, promptly upon receipt thereof.
Effective on the Closing Date, the Transferor hereby
acknowledges its acceptance of all right, title and interest to the Loans and
other property, existing on the Closing Date and thereafter created and conveyed
to it pursuant to this Section 2.01.
The Trustee, as assignee or transferee of the Transferor,
shall be entitled to all scheduled principal payments due after the Cut-off
Date, all other payments of principal due and collected after the Cut-off Date,
and all payments of interest on the Loans. No scheduled payments of principal
due on or before the Cut-off Date and collected after the Cut-off Date shall
belong to the Transferor pursuant to the terms of this Purchase Agreement. The
Pooling and Servicing Agreement shall provide that any late payment charges
collected in connection with a Loan shall be paid to the Servicer as provided
therein.
(c) The parties hereto intend that the transactions set forth herein
constitute a sale by the Seller to the Transferor on the Closing Date of all the
Seller's right, title and interest in and to the Loans and other property as and
to the extent described above. In the event the transactions set forth herein
shall be deemed not to be a sale, the Seller hereby grants to the Transferor as
of the Closing Date a security interest in all of the Seller's right, title and
interest in, to and under the Loans and such other property, to secure all of
the Seller's obligations hereunder and this Purchase Agreement shall constitute
a security agreement under applicable law and in such event, the parties hereto
acknowledge that the Certificate Administrator, in addition to holding the Loans
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on behalf of the Trustee for the benefit of the Certificateholders, holds the
Loans as designee of the Transferor. The Seller agrees to take or cause to be
taken such actions and to execute such documents, including without limitation
the filing of all necessary UCC-1 financing statements filed in the State of [ ]
(which shall have been submitted for filing as of the Closing Date and each
Subsequent Transfer Date, as applicable), any continuation statements with
respect thereto and any amendments thereto required to reflect a change in the
name or corporate structure of the Seller, as are necessary to perfect and
protect the interests of the Transferor and its respective assignees in each
Loan and the proceeds thereof. The Transferor agrees to take or cause to be
taken such actions and to execute such documents, including without limitation
the filing of all necessary UCC-1 financing statements, and continuation
statements with respect thereto and any amendments thereto as are necessary to
perfect and protect the interests of the Trustee and its assignees in each Loan.
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.01 Seller's Representations and Warranties.
---------------------------------------
The Seller hereby represents and warrants to the Transferor
and the Trustee as of the date hereof, as of the Closing Date (or if otherwise
specified below, as of the date so specified):
(a) As to the Seller:
(i) the Seller is a National Banking Association duly
organized, validly existing and in good standing under the laws of the United
States of America; and the Seller further represents and warrants that it is
qualified and in good standing as a foreign corporation to do business in each
jurisdiction where such qualification is necessary, except where the failure so
to qualify would not have a material adverse effect on it's ability to enter
into this Purchase Agreement and to consummate the transactions contemplated
hereby;
(ii) the Seller has the power and authority to make,
execute, deliver and perform its obligations under this Purchase Agreement and
all of the transactions contemplated under this Purchase Agreement, and has
taken all necessary action to authorize the execution, delivery and performance
of this Purchase Agreement;
(iii) the Seller is not required to obtain the consent of
any other Person or any consent, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Purchase Agreement, except for such consents, approvals or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be;
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(iv) the execution and delivery of this Purchase Agreement
and the performance of the transactions contemplated hereby by the Seller will
not violate any provision of any existing law or regulation or any order or
decree of any court applicable to it or any provision of the certificate of
incorporation, charter or bylaws, as the case may be, of the Seller, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Seller is a party or by which the Seller may be bound;
(v) no litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to its
knowledge threatened, against the Seller or any of the Seller's properties or
with respect to this Purchase Agreement, or the Certificates, which in the
Seller's opinion has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Purchase Agreement;
(vi) this Purchase Agreement constitutes the legal, valid
and binding obligations of the Seller, enforceable against the Seller in
accordance with its terms, 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 principles of equity
(whether considered in a proceeding at law or in equity);
(vii) this Purchase Agreement constitutes a valid transfer
and assignment to the Transferor of all right, title and interest of the Seller
in and to the Cut-off Date Principal Balance of the Loans, all monies due or to
become due with respect thereto, and all proceeds of such Cut-off Date Principal
Balance of the Loans, and
(viii) the Seller is not in default with respect to any
order or decree of any court or any order or regulation of any federal, state or
governmental agency, which 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
adversely affect its performance hereunder.
Section 3.02 Individual Mortgage Loans.
-------------------------
The Seller hereby represents and warrants to the Trustee and
the Certificateholders, with respect to each Mortgage Loan, as of the Closing
Date:
(a) The information with respect to each Mortgage Loan set
forth in the related Mortgage Loan Schedule and the Schedules of Mortgage Loans
is true and correct;
(b) All of the original or certified documentation set forth
in Section 2.01(b) (including all material documents related thereto) has been
or will be delivered to the Custodian on the Closing Date or as otherwise
provided in Section 2.01;
(c) Each Mortgage Loan being transferred to the Trust Fund is
a Qualified Mortgage;
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(d) Each Mortgaged Property (other than the Multifamily
Properties) is improved by a Residential Dwelling, which, to the best of the
Seller's knowledge, does not include cooperatives or mobile homes attached to a
foundation or otherwise and does not constitute other than real property under
state law;
(e) Each Mortgage Loan has been originated and underwritten,
or purchased and re-underwritten, by the Seller in accordance with the
underwriting criteria set forth in the Registration Statement and each Mortgage
Loan is being serviced by the Servicer or one or more Subservicers and, with
respect to each Mortgage Loan originated by the Seller, there is only one
originally executed Mortgage Note not stamped as a duplicate copy with respect
to each such Mortgage Loan;
(f) The Mortgage Note rate shall be at least equal the sum of
(i) the Class __ Remittance Rate, in the case of the Mortgage Loans, and (ii)
the rates used in calculating the Servicing Fee, the Trustee Fee, the Trust
Administrator Fee and the Custodian Fee.
(g) Except with respect to 38.90% of the Mortgage Loans, each
Mortgage Note relating to the Mortgage Loans will provide for a schedule of
substantially level and equal Monthly Payments which are, if timely paid,
sufficient to fully amortize the principal balance of such Mortgage Note on or
before its maturity date.
(h) Each Mortgage is, with respect to the Mortgage Loans, a
valid and subsisting lien of record on the Mortgaged Property (with 80.81% of
the Mortgage Loans, (measured by Principal Balances as of the Cut-Off Date)
being secured by first liens) subject, in the case of any second or more junior
Mortgage Loan, only to any applicable Prior Liens on such Mortgaged Property and
subject in all cases to the exceptions to title set forth in the title insurance
policy or the other evidence of title enumerated in Section 2.01(b), with
respect to the related Mortgage Loan, which exceptions are generally acceptable
to banking institutions in connection with its regular mortgage lending
activities, and such other exceptions to which similar properties are commonly
subject and which do not individually, or in the aggregate, materially and
adversely affect the benefits of the security intended to be provided by such
Mortgage;
(i) Immediately prior to the transfer and assignment herein
contemplated, the Seller held good and indefeasible title to, and was the sole
owner of, each Mortgage Loan conveyed by the Seller subject to no liens,
charges, mortgages, encumbrances or rights of others except as set forth in
Section 3.02(h) or other liens which will be released simultaneously with such
transfer and assignment; and immediately upon the transfer and assignment herein
contemplated, the Trustee will hold good and indefeasible title, to, and be the
sole owner of, each Mortgage Loan subject to no liens, charges, mortgages,
encumbrances or rights of others except as set forth in Section 3.02(h) or other
liens which will be released simultaneously with such transfer and assignment;
(j) As of the Cut-Off Date, no Mortgage Loan is 60 days or
more delinquent in payment and, except as provided in the next sentence, no
Mortgage Loan has been delinquent 60 days or more as measured at the end of any
month during the 12 months immediately preceding the Cut-Off Date. Approximately
7
1.29% of the Mortgage Loans, respectively, were 60 days or more delinquent as
measured at the end of any month during the 12 months immediately preceding the
Cut-Off Date. As of the Cut-Off Date, no more 0% of the Mortgage Loans (each by
principal balance), will be delinquent in payment;
(k) To the best of the Seller's knowledge, there is no
delinquent tax or assessment lien on any Mortgaged Property, and each Mortgaged
Property is free of material damage and is in good repair;
(l) The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including 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, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(m) There is no mechanics' lien or claim for work, labor or
material affecting any Mortgaged Property which is or may be a lien prior to, or
equal with, the lien of such Mortgage except those which are insured against by
the title insurance policy referred to in Section 3.02(o) below;
(n) Each Mortgage Loan at the time it was made complied in all
material respects with applicable state and federal laws and regulations,
including, without limitation, usury, equal credit opportunity, disclosure and
recording laws;
(o) With respect to each Mortgage Loan with an original
principal balance greater than $15,000 other than any Mortgage Loan which was
not originated by the Seller a lender's title insurance policy, issued in
standard American Land Title Association, California Land Title Association, New
York Board of Title Underwriters form, or other form acceptable in a particular
jurisdiction, by a title insurance company authorized to transact business in
the state in which the related Mortgaged Property is situated, together with a
condominium endorsement, if applicable, in an amount at least equal to the
original principal balance of such Mortgage Loan insuring the mortgagee's
interest under the related Mortgage Loan as the holder of a valid first or
second mortgage lien of record on the real property described in the Mortgage,
subject only to exceptions of the character referred to in Section 3.02(h)
above, or, with respect to any Mortgage Loan with an original principal balance
less than or equal to $15,000 or any Mortgage Loan which was not originated by
the Seller, some other evidence of the status of title, or other evidence of
title as enumerated in Section 2.01(b), was effective on the date of the
origination of such Mortgage Loan, and, as of the Closing Date, such policy will
be valid and thereafter such policy shall continue in full force and effect;
(p) The improvements upon each Mortgaged Property are covered
by a valid and existing hazard insurance policy with a generally acceptable
carrier that provides for fire and extended coverage;
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(q) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards, a flood insurance policy is in effect with respect to such
Mortgaged Property with a generally acceptable carrier in an amount representing
coverage described in Sections 5.07 and 5.08 of the Pooling and Servicing
Agreement;
(r) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the maker thereof and is enforceable in accordance with
its terms, except only as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether considered in a proceeding or action in equity or at law), none of
which will prevent the ultimate realization of the security provided by the
Mortgage, and all parties to each Mortgage Loan had full legal capacity to
execute all Mortgage Loan documents and convey the estate therein purported to
be conveyed;
(s) The Servicer, at the direction of 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 insurance policies
applicable to the Mortgage Loans including, without limitation, any necessary
notifications of insurers, assignments of policies or interests therein, and
establishments of co-insured, joint loss payee and mortgagee rights in favor of
the Trustee;
(t) No more than approximately 0.17% of the Principal Balances
of the Mortgage Loans are secured by Mortgaged Properties located within any
single zip code area;
(u) Each original Mortgage was recorded, and 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 (or, subject to Section 2.01(b) hereof, are
in the process of being recorded);
(v) Each Mortgage Loan conforms, and all such Mortgage Loans
in the aggregate conform, to the description thereof set forth in the Prospectus
Supplement;
(w) No Mortgage Loan is subject to the provisions of the Home
Ownership and Equity Protection Act of 1994;
(x) [Reserved]
(y) 94.32% of the Mortgage Loans are Single-Family Loans
3.44% of the Mortgage Loans are Mobile Homes
(z) With respect to each Multifamily Loan, no less than
approximately 90% of the related Mortgaged Property, measured by square footage,
number of units and projected rent, is allocated to residential units;
(aa) The terms of the Mortgage Note and the Mortgage have not
been impaired, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interest of the
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Certificateholders and which has been delivered to the Custodian. The substance
of any such alteration or modification is reflected on the Mortgage Loan
Schedule and has been approved by the primary mortgage guaranty insurer, if any;
(bb) No instrument of release or waiver has been executed in
connection with the Mortgage Loan, and no Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement which has been
approved by the primary mortgage guaranty insurer, if any, and which has been
delivered to the Custodian;
(cc) 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 Servicer 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 by the Mortgage, except for interest accruing from the date
of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is greater, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(dd) There is no proceeding pending or threatened for the
total or partial condemnation of the Mortgaged Property, nor is such a
proceeding currently occurring, and such property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty, so as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;
(ee) All of the improvements which were included for the
purpose of determining the appraised value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged Property unless
any such improvements are (except with respect to those Mortgage Loans with
original principal balances which were less than $15,000 or not originated by
the Seller) stated in the title insurance policy and affirmatively insured;
(ff) To the best of the Seller's knowledge 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 be
reasonably 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;
(gg) No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities and the Mortgaged Property is lawfully occupied
under applicable law;
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(hh) The proceeds of the Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to make
future advances thereunder. Any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing or recording the Mortgage Loans were paid;
(ii) The related Mortgage Note is not and has not been secured
by any collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(jj) No Mortgage Loan was originated under a buydown plan;
(kk) There is no obligation on the part of the Seller or any
other party to make payments in addition to those made by the Mortgagor;
(ll) No statement, report or other document signed by the
Seller 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;
(mm) The origination and collection practices used by the
Seller with respect to the Mortgage Note and Mortgage have been in all respects
legal, proper, prudent and customary in the mortgage lending and servicing
business;
(nn) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage, and
no fees or expenses are or will become payable by the Certificateholders to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(oo) With respect to each Mortgage Loan that is not a first
lien mortgage loan, the related Prior Lien requires equal monthly payments, at
the time of the origination of the Mortgage Loan, the related Prior Lien was not
30 or more days delinquent;
(pp) With respect to each Mortgage Loan that is not a first
lien mortgage loan, either (i) no consent for the Mortgage Loan is required by
the holder of the related Prior Lien or (ii) such consent has been obtained and
is contained in the Mortgage File;
(qq) With respect to each Mortgage Loan that is not a first
lien mortgage loan, to the best of the Seller's knowledge, the related Prior
Lien does not provide for negative amortization;
(rr) With respect to each Mortgage Loan that is not a first
lien mortgage loan, the maturity date of the Mortgage Loan is prior to the
maturity date of the related Prior Lien if such Prior Lien provides for a
balloon payment;
(ss) The Mortgaged Property is located in the state identified
in the Mortgage Loan Schedule and consists of a single parcel of real property
with a Residential Dwelling erected thereon (or, with respect to any Multifamily
Loans, a Multifamily Property erected thereon);
11
(tt) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (1) in compliance
with any and all applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (2)(A) organized under the laws
of such state, or (B) qualified to do business in such state, or (C) federal
savings and loan associations or national banks having principal offices in such
state, or (D) not doing business in such state;
(uu) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event the related Mortgaged Property is sold without the prior consent of
the mortgagee thereunder;
(vv) Any future advances 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 reflected on the Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan. The Mortgage Note does not permit or obligate the Servicer to
make future advances to the Mortgagor at the option of the Mortgagor;
(ww) The related Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including, (i) in the case of a Mortgage designated as a deed of
trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would
materially interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;
(xx) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related 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 Servicer nor the Seller has waived any default,
breach, violation or event of acceleration;
(yy) All parties to the Mortgage Note and the Mortgage had
legal capacity to execute the Mortgage Note and the Mortgage and each Mortgage
Note and Mortgage have been duly and properly executed by such parties;
(zz) The Mortgage Loan was not selected for inclusion under
this Agreement from its portfolio of comparable loans on any basis which would
have a material adverse effect on a Certificateholder;
12
(aaa) All amounts received after the Cut-Off Date with respect
to the Mortgage Loans have been deposited into the Principal and Interest
Account and are, as of the Closing Date with respect to the Mortgage Loans, in
the Principal and Interest Account;
(bbb) With respect to each Mortgage Loan originated by the
Seller with an original principal balance in excess of $15,000 for which the
Seller conducted a drive-by appraisal pursuant to ▇▇▇▇▇▇▇ Mac Form 704 or
alternative ▇▇▇▇▇▇ Mae Form in connection with the origination thereof, such
deposited Mortgage Loan (i) had an original principal balance not in excess of
$35,000, and (ii) has a Loan-to-Value Ratio less than 50% and/or an appraisal on
▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇ Mac Form 1004 was performed by the related Seller within one
year prior to the origination of such Mortgage Loan;
(ccc) At the applicable dates of origination of the Mortgage
Loans, none of the Mortgage Loans had a Loan-to-Value Ratio in excess of 100%
and, for each Mortgage Loan with a REMIC LTV (as defined below) greater than
125% substantially all the proceeds of each such Mortgage Loan have been or will
be used to acquire or to improve or protect an interest in real property that,
at the origination date of such Mortgage Loan, was the only security for such
Mortgage Loan. For each Mortgage Loan, "REMIC LTV" means, the fraction expressed
as a percentage, the numerator of which is equal to the original principal
amount of such Mortgage Loan and the denominator of which is equal to the value
(as defined below) of the related Mortgaged Property at the time of origination
of such Mortgage Loan, less the outstanding amount, at the time of origination
of such Mortgage Loan, of any Prior Lien and any lien ranking on a parity with
such Mortgage Loan. For purposes of this clause (ddd), the "value" of a
Mortgaged Property is the lesser of (i) the value of the related Mortgaged
Property, based upon the appraisal made at the time of organization of the
Mortgage Loan, or (ii) the purchase price of such Mortgaged Properly if the
proceeds from such Mortgage Loan were used to acquire such Mortgaged Property;
(ddd) No more than approximately 4.26% of the Mortgage Loans
(measured by outstanding principal balance as of the Cut-Off Date), had a
Debt-to-Income Ratio exceeding 50.0%. "Debt-to-Income Ratio" is that ratio,
stated as a percentage, which results from dividing a Mortgagor's Monthly Debt
by his gross monthly income. "Monthly Debt" includes (i) the monthly payment
under the Prior Liens (which generally includes an escrow for real estate
taxes), (ii) the related Mortgage Loan Monthly Payment (which, with respect to
the Mortgage Loans with adjustable rates, is calculated with interest based on a
rate equal to the Lifetime Cap), (iii) other installment debt service payments,
including, in respect of revolving credit debt, the required monthly payment
thereon, or, if no such payment is specified, 5.0% of the balance as of the date
of calculation. "Monthly Debt" does not include any of the debt (other than
revolving credit debt) described above that matures within less than 10 months
from the date of the calculation. No more than approximately 2.69% of the
Mortgage Loans were originated without verifying the Mortgagor's income;
(eee) At the applicable dates of origination, no Mortgage Loan
had an original term to maturity of greater than 30 years; and
13
(fff) the Seller has good title to, and is the sole owner of,
the Loans, and on the Closing Date, the Seller will transfer to the Transferor
all of the Seller's right, title and interest in the related Loan, free and
clear of any pledge, lien, encumbrance or security interest (except for the
transactions contemplated by this Agreement or the Pooling and Servicing
Agreement).
Upon discovery by the Seller or upon notice from the
Transferor, the Trustee, or the Certificate Administrator, as applicable, of a
breach of any representation or warranty in subsection (a) of this Section which
materially and adversely affects the interests of the Certificateholders the
Seller shall, within 45 days of its discovery or its receipt of notice of such
breach, either (i) cure such breach in all material respects or (ii) to the
extent that such breach is with respect to a Loan or a Related Document, [either
(A)] repurchase the Loans relating to such Loan from the Trustee at the
Repurchase Price, [or (B) substitute one or more Eligible Substitute Loans for
such Loan,] in each case in the manner and subject to the conditions and
limitations set forth below.
Upon discovery by the Seller or upon notice from the
Transferor, the Trustee, or the Certificate Administrator, as applicable, of a
breach of any representation or warranty in this subsection (b) with respect to
any Loan or upon the occurrence of a Repurchase Event, which materially and
adversely affects the value of the related Loan or the interests of any
Certificateholders or of the Transferor or the Trustee in such Loan (notice of
which shall be given to the Transferor and the Trustee by the Seller, if it
discovers the same) the Seller shall, within 90 days after the earlier of its
discovery or receipt of notice thereof, either cure such breach or Repurchase
Event in all material respects or [either (i) ] repurchase such Loan from the
Trustee at the Repurchase Price, [or (ii) substitute one or more Eligible
Substitute Loans for such Loan, in each case in the manner and subject to the
conditions set forth below.] The Repurchase Price for any such Loan repurchased
by the Seller shall be deposited or caused to be deposited by the Servicer in
the Collection Account maintained by it pursuant to Section 3.06 of the Pooling
and Servicing Agreement.
[In the event that the Seller elects to substitute an Eligible
Substitute Loan or Loans for a Deleted Loan pursuant to this Section 3.02, the
Seller shall deliver to the Custodian on behalf of the Trustee, with respect to
the related Eligible Substitute Loan or Loans, the original Mortgage Note and
all other documents and agreements as are required by Section 2.01 hereof, with
the Mortgage Note endorsed as required by such Section 2.01 hereof. No
substitution will be made in any calendar month after the Determination Date for
such month. Monthly Payments due with respect to Eligible Substitute Loans in
the month of substitution shall not be part of the Trust Fund and will be
retained by the Servicer and remitted by the Servicer to the Seller on the next
succeeding Payment Date. For the month of substitution, distributions to the
Payment Account pursuant to the Pooling and Servicing Agreement will include the
Monthly Payment due on a Deleted Loan for such month and thereafter the Seller
shall be entitled to retain all amounts received in respect of such Deleted
Loan. The Servicer shall amend or cause to be amended the Loan Schedule to
reflect the removal of such Deleted Loan and the substitution of the Eligible
Substitute Loan or Loans and the Servicer shall deliver the amended Loan
Schedule to the Certificate Administrator and the Trustee. Upon such
substitution, the Eligible Substitute Loan or Loans shall be subject to the
terms of this Purchase Agreement and the Pooling and Servicing Agreement in all
respects, the Seller shall be deemed to have made the representations and
warranties with respect to the Eligible Substitute Loan contained herein set
14
forth in this Section 3.02, to the extent set forth in the definition of
"Eligible Substitute Loan", as of the date of substitution, and the Seller shall
be obligated to repurchase or substitute for any Eligible Substitute Loan as to
which a Repurchase Event has occurred as provided herein. In connection with the
substitution of one or more Eligible Substitute Loans for one or more Deleted
Loans, the Servicer will determine the amount (such amount, a "Substitution
Adjustment Amount"), if any, by which the aggregate principal balance of all
such Eligible Substitute Loans as of the date of substitution is less than the
aggregate principal balance of all such Deleted Loans (after application of the
principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to the Payment Account in the month of substitution). the
Seller shall pay an amount equal to the amount of such shortfall to the Servicer
for deposit into the Collection Account on the day of substitution, without any
reimbursement therefor.]
Upon receipt by the Trustee of written notification, signed by
a Servicing Officer, of the deposit of such Repurchase Price [or of such
substitution of an Eligible Substitute Loan and deposit of any applicable
Substitution Adjustment Amount] as provided above, the Certificate Administrator
shall, on behalf of the Trustee, cause to be released to the Seller on behalf of
the Seller the related Mortgage File for the Loan being repurchased [or
substituted] for and the Trustee shall execute and deliver such instruments of
transfer or assignment prepared by the Servicer, in each case without recourse,
as shall be necessary to vest in the Seller or its designee such Loan released
pursuant hereto and thereafter such Loan shall not be an asset of the Trustee.
It is understood and agreed that the obligation of the Seller
to cure any breach with respect to or to repurchase or substitute for, any Loan
as to which such a breach has occurred and is continuing shall, except to the
extent provided in Section 6.01 of this Purchase Agreement, constitute the sole
remedy respecting such breach available to the Transferor, the Trustee, the
Certificateholders (or the Certificate Administrator on behalf of the Trustee
for the benefit of Certificateholders) against the Seller.
It is understood and agreed that the representations and
warranties set forth in this Section 3.01 [and 3.02] shall survive delivery of
the respective Mortgage Files to the Custodian.
Section 3.03 Transferor Representations and Warranties.
-----------------------------------------
The Transferor hereby represents and warrants to the Seller
and the Trustee as of the date hereof and as of the Closing Date that:
(a) The Transferor is duly organized and validly existing as a
business trust in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
(b) The Transferor is duly qualified to do business as a
foreign business trust in good standing and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of its
property or the conduct of its business shall require such qualifications and in
which the failure to so qualify would have a material adverse effect on the
business, properties, assets or condition (financial or other) of the Transferor
and the ability of the Transferor to perform under this Purchase Agreement.
15
(c) The Transferor has the power and authority to execute and
deliver this Purchase Agreement and to carry out its terms; the Transferor has
full power and authority to purchase the property to be purchased from the
Seller and the Transferor has duly authorized such purchase by all necessary
corporate action; and the execution, delivery and performance of this Purchase
Agreement have been duly authorized by the Transferor by all necessary trust
action.
(d) The consummation of the transactions contemplated by this
Purchase Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the certificate of trust or
the trust agreement of the Transferor, or any indenture, agreement or other
instrument to which the Transferor is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to the
best of the Transferor's knowledge, any order, rule or regulation applicable to
the Transferor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Transferor or its properties.
(e) The Transferor (A) is a solvent entity and is paying its
debts as they become due and (B) after giving effect to the transfer of the
Loans, will be a solvent entity and will have sufficient resources to pay its
debts as they become due.
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller.
-----------------------
The Seller hereby covenants as of the date hereof and as of
the Closing Date that, except for the transfer hereunder, on and after the
Closing Date, that it will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur or assume any Lien on, any Loan, whether now
existing or hereafter created, or any interest therein; it will notify the
Certificate Administrator and the Trustee of the existence of any such Lien on
any Loan immediately upon discovery thereof; and it will defend the right, title
and interest of the Trustee, on its own behalf and as assignee of the
Transferor, in, to and under the Loans, whether now existing or hereafter
created, against all claims of third parties claiming through or under it.
In the event that the Certificate Administrator or the Trustee
receives actual notice of any transfer taxes arising out of the transfer,
assignment and conveyance of the Loans, on written demand by the Certificate
Administrator, or upon the Seller otherwise being given notice thereof by the
Certificate Administrator, the Seller shall pay any and all such transfer taxes
(it being understood that the Holders of the Certificates, the Transferor, the
Certificate Administrator and the Trustee shall have no obligation to pay such
transfer taxes).
16
Section 4.02 Payment of Expenses.
-------------------
(a) The Seller shall pay on the Closing Date all expenses
incident to the performance of its obligations under this Purchase Agreement and
the Underwriting Agreement, including its share of (i) the preparation, printing
and any filing of the preliminary prospectus, Prospectus Supplement and
Prospectus (including any schedules or exhibits and any document incorporated
therein by reference) originally filed and of each amendment or supplement
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Purchase Agreement, the Underwriting Agreement, the Pooling and Servicing
Agreement and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Certificates, (iii) the
preparation, issuance and delivery of the Underwritten Certificates to the
Representative of the Underwriters, including any charges of DTC, [CEDEL, S.A.
and the Euroclear System] in connection therewith; (iv) the qualification of the
Underwritten Certificates under securities laws in accordance with the
provisions of Section 3(f) of the Underwriting Agreement, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplement thereto for delivery to potential investors, (v) in
addition to the initial printing and filing costs under (i) above, the printing
and delivery to each Underwriter of copies of each preliminary prospectus and of
the Prospectus and any amendments or supplements thereto for delivery to
potential investors, (vi) the fees and expenses of the Trustee and the
Certificate Administrator, including the fees and disbursements of counsel for
the Trustee and the Certificate Administrator in connection with the Pooling and
Servicing Agreement, the Purchase Agreement and the Certificates and (vii) any
fees payable in connection with the rating of the Certificates.
(b) If the Underwriting Agreement is terminated by the
Representative of the Underwriters in accordance with the provisions of Section
5 or Section 9(a) thereof, the Seller shall reimburse the Underwriters for all
of its out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the Underwriters.
(c) The Seller's share of these expenses shall be a pro-rata
share of the total, determined on the basis of the principal balances of the
Loans sold by the Seller as a percentage of all the Loans in the Trust Fund.
17
ARTICLE V
CONDITIONS TO LOAN PURCHASE
Section 5.01 Conditions of Transferor's Obligations.
--------------------------------------
The Transferor's obligation to purchase the Loans shall be
subject to each of the following conditions precedent:
(i) the Mortgage File for each Loan shall have been
delivered in accordance with this Purchase Agreement;
(ii) the representations and warranties set forth in
Section 3.02(b) hereof with respect to each Loan shall be true as of the Closing
Date;
(iii) the Underwriters or their affiliates shall have had
an opportunity to perform a due diligence review of each Loan;
(iv) the Seller shall have provided to the Representative
of the Underwriters or their affiliates such other documents which are then
required to have been delivered under this Purchase Agreement or which are
reasonably requested by the Underwriters or their affiliates, which other
documents may include UCC financing statements, a favorable opinion or opinions
of counsel with respect to matters which are reasonably requested by the
Underwriters, and/or an Officers' Certificate; and
(v) each of the conditions precedent set forth in the
Underwriting Agreement shall have been satisfied.
ARTICLE VI
INDEMNIFICATION BY SELLER WITH RESPECT TO THE LOANS
Section 6.01 Indemnification With Respect to the Loans.
-----------------------------------------
The Seller shall indemnify and hold harmless the Transferor,
Trustee and the Certificate Administrator from and against any loss, liability
or expense arising from the breach by it of its respective representations and
warranties in Section 3.01 [or 3.02] of this Purchase Agreement which materially
and adversely affects the value of any Loan or from the failure by the Seller to
perform its obligations under this Purchase Agreement in any material respect.
18
Section 6.02 Limitation on Liability of Seller.
---------------------------------
None of the directors, officers, employees or agents of the
Seller shall be under any liability to the Transferor, it being expressly
understood that all such liability is expressly waived and released as a
condition of, and as consideration for, the execution of this Purchase
Agreement. Except as and to the extent expressly provided in the Basic
Documents, the Seller shall not be under any liability to the Trustee, the
Certificate Administrator or the Certificateholders. The Seller and any
director, officer, employee or agent of the Seller may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder.
ARTICLE VII
TERMINATION
Section 7.01 Termination.
-----------
(a) Except as provided in Section 7.01(b) hereof, the
respective obligations and responsibilities of the Seller, the Transferor, the
Trustee and the Certificate Administrator created hereby shall terminate, except
for the Seller's indemnity obligations as provided herein, upon the termination
of the Trust Fund pursuant to the terms of the Pooling and Servicing Agreement.
(b) The Transferor may terminate this Purchase Agreement, by
notice to the Seller, at any time at or prior to the Closing Date:
(i) if the Underwriting Agreement is terminated by the
Representative of the Underwriters pursuant to the terms of the Underwriting
Agreement or if there has been, since the time of execution of this Purchase
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the financial condition, earnings,
business affairs or business prospects of the Seller, whether or not arising in
the ordinary course of business, or
(ii) if there has occurred any material adverse change in
the financial markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representative of the Underwriters, impracticable to
market the Underwritten Certificates or to enforce contracts for the sale of the
Underwritten Certificates, or
19
(iii) if trading in any securities has been suspended or
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the NASDAQ National Market System has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority,
(iv) if a banking moratorium has been declared by either
federal or New York authorities,
(v) the Representative of the Underwriters determines in
its sole discretion that any material adverse change has occurred in the
management of the Seller,
(vi) there is (A) a material breach by the Seller of any
representation and warranty contained in this Purchase Agreement or the
Underwriting Agreement other than a representation or warranty relating to
particular Loans, and the Representative of the Underwriters has reason to
believe in good faith either that such breach is not curable within two (2) days
or that such breach may not have been cured in all material respects at the
expiration of two (2) days following discovery thereof by the Seller or (B) a
failure by the Seller to make any payment payable by it under this Purchase
Agreement or (C) any other failure by the Seller to observe and perform in any
material respect its material covenants, agreements and obligations with the
Transferor, including without limitation those contained in this Purchase
Agreement, and the Transferor has reason to believe in good faith that such
failure may not have been cured in all material respects at the expiration of
two (2) days following discovery thereof by the Seller, or
(vii) the Seller fails to provide written notification to
the Underwriters of any change in its loan origination, acquisition or appraisal
guidelines or practices, or the Seller, without the prior consent of the
Underwriters (which shall not be unreasonably withheld), amends in any material
respect its loan origination, acquisition or appraisal guidelines or practices.
(viii) If this Purchase Agreement is terminated pursuant
to this Section 7.01(b), such termination shall be without liability of any
party to any other party except as provided in Section 4.02 hereof.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment.
---------
This Purchase Agreement may be amended from time to time by
the Seller, the Transferor, the Certificate Administrator and the Trustee by
written agreement signed by the Seller, the Transferor, the Certificate
Administrator and the Trustee.
20
Section 8.02 Governing Law.
-------------
This Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 8.03 Notices.
-------
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by registered mail, postage prepaid, addressed as follows:
if to the Seller:
First Union National Bank
12th Floor, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ 1179
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Structured Finance Trust Services (RAFC
Asset Backed Trust, Series 2001-1)
or, such other address as may hereafter be furnished to the other parties hereto
in writing by the Seller.
if to the Transferor:
RAFC Transferor Trust
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Administration
or such other address as may hereafter be furnished to the other parties hereto
in writing by the Transferor.
if to the Certificate Administrator:
First Union National Bank
12th Floor, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ 1179
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Structured Finance Trust Services (RAFC
Asset Backed Trust, Series 2001-1)
or such other address as may hereafter be furnished to the other parties hereto
in writing by the Certificate Administrator.
21
if to the Trustee:
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Structured Finance Group (RAFC Asset Backed
Trust, Series 2001-1)
or such other address as may hereafter be furnished to the Seller in writing by
the Trustee.
Section 8.04 Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or
terms of this Purchase Agreement shall be held invalid for any reason
whatsoever, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
Purchase Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Purchase Agreement.
Section 8.05 Relationship of Parties.
-----------------------
Nothing herein contained shall be deemed or construed to
create a partnership or joint venture between the parties hereto, and the
services of the Seller shall be rendered as an independent contractor and not as
agent for the Transferor.
Section 8.06 Counterparts.
------------
This Purchase Agreement may be executed in two or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts together shall constitute one and the same agreement.
Section 8.07 Further Agreements.
------------------
The Transferor and the Seller agree to execute and deliver to
the other such additional documents, instruments or agreements as may be
necessary or appropriate to effectuate the purposes of this Purchase Agreement.
Each of the Transferor and the Seller agrees to use its best reasonable efforts
to take all actions necessary to be taken by it to cause the Class A-1
Certificates to be rated "A-1a" by ▇▇▇▇▇'▇ and "P-1A" by S&P, the Class A-2
Certificates to be rated "Aaa" by ▇▇▇▇▇'▇ and "AAA" by S&P, the Class A-3
Certificates to be rated "Aaa" by ▇▇▇▇▇'▇ and "AAA" by S&P, the Class M-1
Certificates to be rated "Aa2" by ▇▇▇▇▇'▇ and "AA" by S&P, the Class M-2
Certificates to be rated "A2" by ▇▇▇▇▇'▇ and "A" by S&P, the Class B-1
Certificates to be rated "Baa2" by ▇▇▇▇▇'▇ and "BBB" by S&P, and the Class B-2
Certificates to be rated "Ba2" by ▇▇▇▇▇'▇ and "BB" by S&P, and each party will
cooperate with the other in connection therewith.
22
Section 8.08 Intention of the Parties.
------------------------
It is the intention of the parties that the Transferor is
purchasing on the Closing Date, and the Seller is selling on the Closing Date,
the Loans, rather than the Transferor providing to the Seller a loan secured by
the Loans on the Closing Date.
Section 8.09 Successors and Assigns; Assignment of
-------------------------------------
Purchase Agreement.
------------------
This Purchase Agreement shall bind and inure to the benefit of
and be enforceable by the Seller, the Transferor, the Trustee, the Certificate
Administrator, and their respective successors and assigns. The obligations of
the Seller under this Purchase Agreement cannot be assigned or delegated to a
third party without the consent of the Transferor, which consent shall be at the
Transferor's discretion. The parties hereto acknowledge that (i) the Transferor
is acquiring the Loans for the purpose of selling them to Residential Asset
Funding Corporation, the Depositor, who will in turn sell the Loans to the
Trustee for the benefit of the Certificateholders. As an inducement to the
Transferor, the Depositor and the Trustee to purchase the Loans, the Seller
acknowledges and consents to (i) the assignment by the Transferor to the
Depositor, and by the Depositor to the Trustee of all of the Transferor's rights
or remedies against the Seller pursuant to this Purchase Agreement and to (ii)
the enforcement or exercise of any rights against the Seller pursuant to this
Purchase Agreement by the Transferor, the Certificate Administrator and the
Trustee. Such enforcement of a right or remedy by the Transferor, the Trustee or
the Certificate Administrator, as applicable, shall have the same force and
effect as if the right or remedy had been enforced or exercised by the
Transferor directly.
8.10 Survival.
--------
The representations and warranties made herein by the Seller
and the provisions of Article V hereof shall survive the purchase of the Loans
hereunder.
8.11 Liability of the Trustee.
------------------------
The Trustee is entering into the Basic Documents to which it
is a party solely as Trustee, hereunder and thereunder, and not in its
individual capacity, and all persons having any claim against the Trustee by
reason of the transactions contemplated by this Agreement or any other Basic
Document shall look only to the Trust Fund for payment or satisfaction thereof.
8.12 Limitation of Liability of Owner Trustee.
----------------------------------------
Notwithstanding anything else contained herein to the
contrary, it is expressly understood and agreed by the parties that (a) this
document is executed and delivered by Wilmington Trust Company, not individually
or personally, but solely as Owner Trustee, in the exercise of the powers and
23
authority conferred and vested in it, pursuant to the Trust Agreement, (b) each
of the representations, undertakings and agreements herein made on the part of
the Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Trust, (c) nothing herein contained shall be construed as
creating any liability on Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
person claiming by, through or under the parties hereto, and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or any other related documents. In
all circumstances hereunder, notwithstanding anything contained herein or in any
other document to the contrary, the Owner Trustee is entitled to the benefits of
the Trust Agreement and has no obligation to act hereunder other than pursuant
to instruction as set forth in the Trust Agreement.
24
IN WITNESS WHEREOF, the Seller, the Transferor, the
Certificate Administrator and the Trustee have caused their names to be signed
to this Purchase Agreement by their respective officers thereunto duly
authorized as of the day and year first above written.
FIRST UNION NATIONAL BANK
as Seller
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: SVP
RAFC TRANSFEROR TRUST
as Transferor
By: WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Financial Services Officer
FIRST UNION NATIONAL BANK
as Certificate Administrator
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
CITIBANK, N.A.,
not in its individual capacity,
but solely as Trustee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
[Loan Purchase Agreement Signature Page]
EXHIBIT 1
LOAN SCHEDULE
[On File with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP]