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ASSET REPURCHASE AGREEMENT
This Asset Repurchase Agreement (the "Agreement") is entered
into as of March 31, 1997 by and between Xxxx Xxxxx Life Insurance Company, a
Minnesota corporation ("Seller"), and SunAmerica Life Insurance Company, an
Arizona corporation ("Purchaser").
Reference is made to the Asset Purchase and Sale Agreement
dated as of November 29, 1996 by and between Seller and Purchaser (the "Asset
Purchase Agreement") and the Stock Purchase and Sale Agreement dated as of
November 29, 1996 by and between Seller and Purchaser (the "Stock Agreement").
The Asset Purchase Agreement and the Stock Agreement are referred to herein as
the "1996 Agreements". All capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed thereto in the 1996
Agreements.
WHEREAS, in connection with the transactions contemplated by
the 1996 Agreements, Purchaser desires to have, and Seller desires to grant, the
option to require Seller to repurchase certain of the assets transferred, sold
or assigned by Seller to Purchaser under the Asset Purchase Agreement or owned
by JANY for cash.
WHEREAS, Schedule A (which Schedule includes commercial and
residential loans held by Seller or JANY) sets forth Mortgage Loans to be
acquired by Purchaser under the Asset Purchase Agreement or which are Mortgage
Loans under the Stock Purchase Agreement, which, due to the lack of or defects
in the documentation required pursuant to the 1996 Agreements, are not
acceptable to Purchaser ("Schedule A Mortgage Loans"). Such lack of or defects
in documentation shall constitute a Put Event (as defined below) unless cured as
provided herein.
NOW THEREFORE, in consideration of the premises and agreements
contained herein and other good, valuable and sufficient consideration, the
receipt of which is hereby acknowledged, Seller and Purchaser, intending to be
legally bound, hereby agree as follows:
Section 1.1 In the event that Purchaser determines that a Put
Event shall be existing at the end of the Cure Period (as defined below) with
respect to a Schedule A Mortgage Loan (each a "Rejected Asset"), Purchaser shall
have the right to require Seller to repurchase for cash the Rejected Asset on a
rescission basis (the amount of the cash purchase price being
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the Book Value on the Closing Date of the Rejected Asset plus interest for the
Cure Period calculated at the three month LIBOR rate in effect on the Business
Day preceding the Closing Date plus 100 basis points, from the Closing Date to
the date of repurchase, less any payments received in respect of the Rejected
Asset by Purchaser (which payments shall be retained by Purchaser) during the
Cure Period. The "Cure Period" shall mean the period beginning on the Closing
Date and ending on (i) July 31, 1997 in the case of all Schedule A Mortgage
Loans with respect to which the subject property is located outside of the
States of New York, Connecticut, New Jersey and the District of Columbia, and
(ii) September 30, 1997 in the case of Schedule A Mortgage Loans with respect to
which the subject property is located in the States of New York, Connecticut,
New Jersey or the District of Columbia.
The repurchases contemplated by the paragraph immediately
above shall be effected in accordance with the procedures set forth in Sections
1.2 and 1.3 below ("Asset Put Election").
One or more of the lack of or defects in documentation listed
on Schedule A hereto, if not cured by Seller to the reasonable satisfaction of
Purchaser on or prior to the second Business Day prior to the end of the Cure
Period, constitutes a "Put Event" with respect to the related Schedule A
Mortgage Loan.
Section 1.2 Purchaser may make an Asset Put Election with
respect to any Schedule A Mortgage Loan by giving Seller notice of such Asset
Put Election (a "Put Notice") within five (5) Business Days after the end of the
Cure Period. The Put Notice shall identify the Rejected Asset and certify the
Put Event as to each Rejected Asset upon which its rejection is based. The Put
Notice shall also include the amount of cash Purchaser expects to receive as the
repurchase price calculated in accordance with Section 1.1.
Section 1.3 Within ten (10) Business Days of the end of the
Cure Period, Seller shall transfer to Purchaser as to each Rejected Asset cash
in an amount calculated in accordance with Section 1.1 hereof. Purchaser shall
simultaneously reconvey the Rejected Assets to Seller by appropriate transfer
documents, but without warranty or representation by Purchaser except that
Purchaser shall represent that it has not sold, assigned, transferred, modified
or hypothecated such Rejected Assets to any other party or taken any action that
materially and adversely affects the rights of the holder of such Rejected
Assets without Seller's prior written consent, which consent shall not be
unreasonably withheld.
Section 1.4. Attached as Schedule C is a listing of various
Mortgage Loans. The Mortgage Loans on Schedule C are
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referred to herein as the "Schedule C Mortgage Loans". The parties have
identified certain minor issues with respect to the documentation relating to
the Schedule C Mortgage Loans, as noted on Schedule C. Seller, at its sole cost
and expense, will use its commercially reasonable efforts to promptly resolving
the identified problems with respect to the Schedule C Mortgage Loans (including
any Mortgage Loans listed on Schedule B that duplicate the Mortgage Loans listed
on Schedule A with respect to any problems on Schedule C) in addition to
resolving the lack of or defects in documentation with respect to the Schedule A
Mortgage Loans. Such efforts shall include retention of the employees listed on
Schedule B, and at the request of Purchaser retention of a third party
contractor reasonably acceptable to Seller and at Seller's sole cost and expense
to aid in the resolution process.
Section 1.5. Seller's obligations under this Agreement are in
addition to its obligations under the 1996 Agreements, as amended, and do not
constitute a waiver by Purchaser of any of its rights or remedies under the 1996
Agreements. Without limiting the generality of the foregoing, Seller's
obligations hereunder are not subject to the "basket" provisions in Section
10.3(b) or (c) of the Asset Purchase Agreement or Section 9.3(b) or (c) of the
Stock Agreement.
Section 1.6. All representations and warranties set forth in
the 1996 Agreements will survive the execution of this Agreement pursuant to the
terms of the 1996 Agreements, notwithstanding any knowledge that Purchaser has
with respect to any of the Mortgage Loans that are the subject of this Agreement
and or the 1996 Agreements or its examination of any related documentation.
Section 1.7 The provisions in Article 12 (Miscellaneous) of
the Asset Purchase Agreement shall be incorporated herein as though set forth in
this Agreement in their entirety.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first set forth above.
XXXX XXXXX LIFE INSURANCE COMPANY
By: /s/Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
SUNAMERICA LIFE INSURANCE COMPANY
By: /s/Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Senior Vice President
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