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Exhibit 2.2
MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
This Mortgage Loan Purchase and Sale Agreement (this "Loan Purchase
Agreement" or "MLPA") is made as of February 23, 2001, by and among CHASE
MANHATTAN BANK USA, NATIONAL ASSOCIATION (the "Purchaser" or "Chase"), Chase
Manhattan Mortgage Corporation ("CMMC"), ADVANTA CORP. (the "Company"), and the
selling subsidiaries set forth on Exhibit E (collectively the "Selling
Subsidiaries" or the "Seller").
BACKGROUND
Purchaser wishes to purchase from the Selling Subsidiaries, and the Selling
Subsidiaries wish to sell to Purchaser, on the terms and conditions contained in
this Loan Purchase Agreement, the mortgage loans (including HELOCs) identified
in Exhibit A attached hereto. The Company and Chase Manhattan Mortgage
Corporation ("CMMC") are parties to a Purchase and Sale Agreement (the "Purchase
and Sale Agreement"), dated as of January 8, 2001, providing for the sale by the
Company and the Selling Subsidiaries (as defined therein) to CMMC and certain
affiliates of CMMC of the Assets and certain liabilities relating to the
Business.
In consideration of the mutual promises, covenants, and agreements
contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. All capitalized terms used in this Loan Purchase Agreement but
not otherwise defined herein shall have the same meanings ascribed to such words
in the Purchase and Sale Agreement. As used in this Loan Purchase Agreement, the
following capitalized terms shall have the following meanings, unless the
context requires otherwise:
"ACCEPTED SERVICING PRACTICES": With respect to any Mortgage Loan, those
mortgage servicing practices (including collection practices) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Property is located.
"ASSIGNMENT OF MORTGAGE": An assignment of the Mortgage, notice of transfer
or equivalent instrument (which, in each jurisdiction where permitted under
applicable law, shall include a blanket assignment) sufficient under the laws of
the jurisdiction wherein the related collateral is located to reflect of record
the transfer of the Mortgage Loan to Chase or one of its affiliates "in blank."
"CLOSED END PERFORMING LOANS": All closed end Mortgage Loans (other
than Corporate Finance Loans), including the Off-Balance Sheet Loans in the
Xxxxxx Xxxxxxx Warehouse Facility and closed end Mortgage Loans owned by the
Company and the
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Selling Subsidiaries that, as of the Cut-Off Date are not Non-Performing Loans
or Unsalable Loans.
"CORPORATE FINANCE LOANS": Mortgage Loans acquired by a Selling Subsidiary
under the Corporate Finance Agreements.
"CORPORATE FINANCE RESERVE AMOUNT": The amount reserved on the balance
sheet of the Seller on the date of Closing under the Purchase and Sale Agreement
relating to Corporate Finance Loans, which amount shall, upon the Closing under
the Purchase and Sale Agreement, become the property of Purchaser. Such reserve
amount shall, upon any Loss incurred by Purchaser relating to a Corporate
Finance Loan, be reduced by the amount of such Loss.
"CREDIT FILE": All documentation required by Chase for underwriting review
as set forth in the Exhibit C hereto.
"CREDIT LINE AGREEMENT": With respect to any Mortgage Loan that is a HELOC,
the related home equity line of credit agreement or promissory note executed by
the related Mortgagor and any amendment or modification thereof.
"CUT-OFF DATE": The close of business on January 31, 2001 or such other
date as shall be mutually agreed upon by the parties hereto.
"ELECTRONIC DATA FILE": An electronic file that provides data on a loan
level basis with respect to the following fields: Loan Number, Alt Loan Number,
Pricing Category, Last Name, Current UPB, Credit Limit (for HELOCs), Original
CLTV, Current Note Rate, Product Type or Interest Method, Original Term,
Maturity Date, Lien, Funding Date or Note Date, Pre-Payment Penalty (Closed-end
only)(Y/N) (if applicable), Pre-Pay Code (Closed-end only), Life Cap (HELOC
only) (if applicable), Life Floor (if applicable), State, Maximum Rate (Closed
End), Minimum Rate (Closed End), Pricing Category, Margin (if applicable), Index
(if applicable), Draw Period (HELOC only) and such other fields as may be
reasonably requested by Chase.
"HELOC": A Mortgage Loan that is a home equity line of credit.
"HELOC PERFORMING LOANS": All HELOCs, including the Off-Balance Sheet Loans
in the Xxxxxx Xxxxxxx Warehouse Facility, and any HELOCs owned on-balance sheet
by the Company and the Selling Subsidiaries that, as of the Cut-Off Date are not
Non-Performing Loans or Unsalable Loans.
"INVESTOR RIGHTS": Any and all rights and privileges associated with the
ownership of a Mortgage Loan, including but not limited to the right to receive
all payments of principal and interest paid by a Mortgagor.
"LETTER AGREEMENT": The Mortgage Loan Purchase Price and Terms Letter,
dated as
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of January 8, 2001, by and between CMMC and the Company.
"LOANS": The Performing Loans, the Corporate Finance Loans, the Unsalable
Loans and the Non-Performing Loans as set forth in the Mortgage Loan Schedule.
"LOAN FILE": All documentation required for a Mortgage Loan as set forth in
Exhibit D hereto.
"LOSSES": Any and all claims, losses, liabilities, costs, fines, expenses
(including reasonable expenses for attorneys or other expenses of litigation,
arbitration or other similar proceedings), damages, obligations to third
parties, expenditures, proceedings, judgements, awards, settlements or demands
that are imposed upon or otherwise incurred, suffered or sustained by the
relevant party.
"MLPA CLOSING DATE": February 23, 2001 or such other date as shall be
mutually agreed upon by the parties hereto, but in no event shall the MLPA
Closing Date be later than the date on which the "Closing" occurs under the
Purchase and Sale Agreement.
"MORTGAGE": The mortgage, deed of trust or other security instrument
creating a first or junior lien on an interest in real property securing a Note
or, in the case of HELOCs, securing each Credit Line Agreement.
"MORTGAGE LOAN(S)": The mortgage loans (including HELOCs) identified on the
Mortgage Loan Schedule. The term "Mortgage Loan" includes any Mortgage Loan
which is a Non-Performing Mortgage Loan, which relates to a foreclosure or which
relates to a Property which is an REO Property prior to such Property's
disposition.
"MORTGAGE LOAN SCHEDULE": The schedule of Mortgage Loans set forth in
Exhibit A hereto. The Mortgage Loan Schedule will contain the following
information as to each Mortgage Loan: (i) the Mortgage Loan identifying number;
(ii) the street address of the Property including the city, state and zip code;
(iii) an indication of whether the Property is owner-occupied; (iv) the property
type of the Property; (v) the maturity date; (vi) the original loan-to-value
ratio or combined loan-to-value ratio, as applicable; (vii) the original
principal balance of the Mortgage Loan or in the case of a HELOC, the maximum
amount of the line of credit; (viii) the unpaid principal balance of the
Mortgage Loan as of the close of business on the Cut-off Date; (ix) the current
mortgage rate; (x) the amount of the current monthly payment (or, in the case of
a HELOC, the amount of the most recent payment); (xi) the loan type, i.e., fixed
rate or adjustable rate; (xii) type of lien, i.e., first or second lien; (xiii)
whether such Mortgage Loan is a closed end loan or open end loan; (xiv) the next
due date; (xv) whether such Mortgage Loan is a "Section 32 loan;" and (xvi) a
designation as to which pricing category and subcategory identified in Column A
of Exhibit B applies to such Mortgage Loan.
"MORTGAGOR(S)": The maker(s), obligor(s) and/or guarantor(s) of a Note.
"NON-PERFORMING LOANS": All Mortgage Loans (other than Corporate Finance
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Loans) that, as of the Cut-off Date (i) are 61 days or more delinquent
calculated by the number of days elapsed from the last payment date to the
Cut-Off Date, (ii) have been 61 days delinquent 2 or more times in the 12 months
immediately prior to the Cut-Off Date, (iii) have been 91 days delinquent in the
12 months immediately prior to the Cut-Off Date and (iv) REO properties. For
purposes of clause (i), with respect to any closed end Mortgage Loan for which a
monthly payment due on December 1, 2000 has not been received as of the Cut-Off
Date (but for which all monthly payments due prior to December 1, 2000 have been
received), such Mortgage Loan shall not be considered 61 days or more delinquent
as of the Cut-Off Date (but shall be considered 31-60 days delinquent).
"NOTE" OR "MORTGAGE NOTE": The promissory note or, with respect to a HELOC,
the Credit Line Agreement, of a Mortgagor secured by a Mortgage.
"OFF-BALANCE SHEET LOANS": The meaning set forth in the Purchase and Sale
Agreement.
"PERFORMING LOANS": All Closed End Performing Loans and HELOC Performing
Loans.
"PRICING CATEGORY": With respect to Closed End Loans and Open-end (HELOC)
Loans, Xxxxxx Facility Closed-end Loans and Xxxxxx Facility Open-end Loans each
of the following pricing categories identified in Column A of Exhibit B:
Performing Loans; Corporate Finance Loans; Unsalable Loans; and Non-Performing
Loans, and each of the subcategories relating to such categories .
"PRICING CATEGORY PRICE PERCENTAGE": As to each Pricing Category, the
percentage identified in Column B of Exhibit B.
"PRICING CUT-OFF DATE": November 30, 2000.
"PROPERTY": The underlying property securing a Mortgage Loan.
"PURCHASE AND SALE AGREEMENT": The Purchase and Sale Agreement between
Advanta Corp. and Chase Manhattan Mortgage Corporation, dated as of January 8,
2001.
"SECURITIZABLE LOANS": The Off-Balance Sheet Loans, Mortgage Loans held
on-balance sheet that satisfy the representations and warranties in Section
4.2(a), or other Mortgage Loans held on-balance sheet that are similar to
mortgage loans securitized by the Selling Subsidiaries in recent
Company-Sponsored Mortgage Loan Securitization Transactions or which meet the
criteria established by one or more independent rating agencies.
"SERVICING AGREEMENT": As defined in Section 7.1.
"SERVICING FEE": As defined in Section 7.1.
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"SERVICING RIGHTS": All rights to service Mortgage Loans.
"SUBSERVICER": Advanta Mortgage Corp. USA.
"UNSALABLE LOANS": All Mortgage Loans that are not Securitizable Loans,
Corporate Finance Loans or Non-Performing Loans. Unsalable Loans shall include
bankruptcies which do not meet the definition of Non-Performing Loans (i.e.,
"current bankruptcies") and Mortgage Loans that as of the Cut-Off Date have
legal deficiencies or credit deficiencies which prevent sale to a securitization
and which deficiencies remain uncorrected through the MLPA Closing Date.
ARTICLE II
SALE OF LOANS; PRICING; DUE DILIGENCE
SECTION 2.1. SALE OF LOANS
(a) On the Purchase Date, or such other date as may be mutually agreed upon
by the parties hereto but in no event later than the Closing Date under the
Purchase and Sale Agreement (the "Settlement Date"), the Selling Subsidiaries
shall sell or cause to be sold, and Purchaser shall purchase, the Mortgage Loans
described in Exhibit A attached hereto. If for any reason the Company is unable
to sell the Off-Balance Sheet Loans, then, at Chase's option, either this Loan
Purchase Agreement may be terminated by Chase giving written notice thereof to
the Company, without further liability on the part of any party hereto, or the
Mortgage Loans other than the Off-Balance Sheet Loans shall be sold in
accordance with the terms of this Loan Purchase Agreement. The Corporate Finance
Loans which are part of the Mortgage Loans will be sold to Buyer subject to the
terms of the Corporate Finance Agreements.
(b) The aggregate amount of Mortgage Loans that will be purchased by
Purchaser will be the actual outstanding principal balance at the close of
business on the Cut-Off Date. In the event that the Closing occurs under the
Purchase and Sale Agreement on February 28, 2001, the Purchaser shall pay to
Seller an amount equal to the aggregate additional draws on HELOCs that are
funded by the Company or a Selling Subsidiary from the Cut-Off Date through and
including February 28, 2001; in the event that the Closing does not occur under
the Purchase and Sale Agreement on February 28, 2001, the March, 2001 remittance
from Subservicer to Purchaser pursuant to the Servicing Agreement will be
reduced by an amount equal to the aggregate additional draws on HELOCs that are
funded by the Company or a Selling Subsidiary from the Cut-Off Date through and
including February 28, 2001. In the event that the Closing occurs under the
Purchase and Sale Agreement on March 31, 2001, the Purchaser shall pay to Seller
an amount equal to the aggregate additional draws on HELOCs that are funded by
the Company or a Selling Subsidiary from March 1, 2001 through and including
March 31, 2001. To the extent that the Closing under the Purchase and Sale
Agreement does not occur on or before by March 31, 2001, each remittance from
Subservicer to Purchaser pursuant to the Servicing Agreement from April 2001 and
thereafter shall be reduced by
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an amount equal to the aggregate additional draws on HELOCs that are funded by
the Company or a Selling Subsidiary during the calendar month immediately
preceding the month of such remittance date. To the extent that the Closing
under the Purchase and Sale Agreement does not occur on or before March 31,
2001, Purchaser and Seller shall agree on a mutually satisfactory arrangement
whereby Purchaser shall assume responsibility for funding draws on HELOCs made
after such date and in any event Purchaser shall assume such responsibility not
later than June 1, 2001. Purchaser shall be entitled to all collections of
principal and interest on the Mortgage Loans after the Cut-off Date.
SECTION 2.2. PRICING.
(a) The purchase price (the "MLPA Purchase Price") for the Mortgage Loans
shall be calculated as set forth in Schedule 1 attached hereto. On the MLPA
Closing Date, in addition to the MLPA Purchase Price, Purchaser shall pay to
Seller an amount of accrued interest, calculated from the date interest was last
paid for each Mortgage Loan (other than Non-Performing Loans) through and
including the day prior to the MLPA Closing Date, net of the applicable
subservicing fee ("Accrued Interest"). Seller shall provide to Purchaser a
detailed reconciliation of the calculation of accrued interest on HELOCs within
30 days of the MLPA Closing Date. Purchaser shall not pay Accrued Interest on
Non-Performing Loans. On the MLPA Closing Date, Purchaser shall pay to Seller an
amount equal to the MLPA Purchase Price (less applicable amounts subject to the
ARM Holdback, Document Holdback and CF Holdback pursuant to paragraph 3(b)
below) plus Accrued Interest (as described above). Seller acknowledges that
Purchaser has relied upon the Electronic Data File and other supplementary
materials relating to the Electronic Data File provided by or on behalf of
Seller with respect to the Mortgage Loans (the "Offering Materials") in
connection with the transactions contemplated hereby. If at any time prior to
the day that is one hundred and eighty (180) days following the MLPA Closing
Date, either Purchaser or Seller believes that the amount paid by Purchaser to
Seller on the MLPA Closing Date was calculated in error, Purchaser or Seller, as
the case may be, shall give written notice of such error to the other. In the
event that the Closing occurs under the Purchase and Sale Agreement, any such
discrepancy shall be resolved in accordance with Section 1.05 of the Purchase
and Sale Agreement; in the event that no such Closing occurs, Seller and
Purchaser agree to attempt to resolve any such discrepancy promptly and in good
faith, with any agreed to adjustment being paid over to the appropriate party
promptly in immediately available funds.
(b) An ARM Holdback, a Document Holdback and a CF Holdback shall be
withheld by Purchaser from the MLPA Purchase Price. The amount withheld for the
ARM holdback shall be $31,185. The amount withheld for the Document Holdback
shall be determined on the basis of a Document Report (as defined in the
Purchase and Sale Agreement) relating solely to the Mortgage Loans and delivered
to Purchaser two Business Days prior to the MLPA Closing Date at the rate of
$55.00 for each document that is categorized in Schedule 2 as being subject to
the Document Holdback. With respect to the Corporate Finance Loans, there shall
be an amount withheld (the "CF Holdback") that is equal to the difference
between (a) the portion of the MLPA Purchase
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Price attributable to the Corporate Finance Loans, as calculated in accordance
with Schedule 1, and (b) what the purchase price for the Corporate Finance Loans
would have been if Corporate Finance Loans that would otherwise meet the
definition of Non-Performing Loans or Unsalable Loans, except for the fact that
Corporate Finance Loans are excluded from such definitions, had been priced in
the Pricing Categories for Non-Performing Loans and Unsalable Loans,
respectively, taking into account that Accrued Interest is not paid by the
Purchaser on Non-Performing Loans; provided that, for purposes of the preceding
sentence only, Corporate Finance Loans with a limited or no appraisal in the
credit file shall be priced as Unsalable Loans and the difference shall be
included in the CF Holdback..
The provisions of Sections 1.05(l) and (m) of the Purchase and Sale
Agreement relating to the ARM Holdback and the Document Holdback and the release
of such holdbacks are hereby incorporated by reference into this Loan Purchase
Agreement. The amount of the CF Holdback plus accrued interest at a rate equal
to the "Fed Funds" rate shall be paid to Seller on the date that Closing under
the Purchase and Sale Agreement occurs, if such Closing occurs.
(c) Notwithstanding anything to the contrary contained in this Loan
Purchase Agreement, the Company may, at its sole option, terminate this Loan
Purchase Agreement by written notice thereof given to CMMC at any time prior to
the Purchase Date, without any liability, if prior to such time the Purchase and
Sale Agreement has been terminated for any reason.
SECTION 2.3. DUE DILIGENCE.
(a) The Company and the Purchaser acknowledge that the classification
of the Mortgage Loans on Exhibit B hereto differs from the classification of the
Mortgage Loans that was attached to the Letter Agreement. Such differences
reflect the reclassification of certain Mortgage Loans which occurred based upon
the Purchaser's due diligence in accordance with Paragraph 8 of the Letter
Agreement, together with certain other updated information to which the parties
hereto shall have agreed.
(b) Based on Purchaser's due diligence, the parties agree that certain
missing or defective documentation ("Legal File Exceptions") shall cause a Loan
to be reclassified into the Unsalable Loan category. The Legal File Exceptions
that cause such reclassification of a Mortgage Loan are specified in Schedule 2
and are referred to herein as "Unsalable Exceptions".
(c) Based on Purchaser's due diligence, Purchaser identified a total of
[542] Mortgage Loans with missing title policies or title policy exceptions that
were categorized by Purchaser as "Title Policy Missing/Incorrect" (collectively,
the "Title Policy Exceptions"). Such Loans are identified on Schedule 4. The
Company has engaged an independent third party vendor to cure the Title Policy
Exceptions noted by Purchaser in its due diligence. Two Business Days prior to
the MLPA Closing Date, the Company will provide Purchaser with a status report
identifying which title policy
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exceptions have been corrected as of such date (the "Corrected Title Policies").
On the MLPA Closing Date, the Company shall indicate on Schedule 4 (i) those
Mortgage Loans for which Title Policy Exceptions remain as of the MLPA Closing
Date and (ii) those Loans which are Corrected Title Policies. The parties agree
that all loans with Corrected Title Policies and no Unsalable Exceptions shall
be priced as Performing Loans in accordance with Exhibit B. With respect to the
remainder of the Mortgage Loans with Title Policy Exceptions that have not yet
been corrected, the parties agree that such Mortgage Loans shall be priced as
Unsalable Loans in accordance with Exhibit B; provided, however, that the
Company shall have 60 days following the MLPA Closing Date (the "Post-Closing
Cure Period") to correct any Title Policy Exceptions that were uncorrected as of
the MLPA Closing Date. Upon correction of a Title Policy Exception during the
Post-Closing Cure Period, the Company may, on the twentieth, fortieth, or
sixtieth day of such Post-Closing Cure Period (or, if any such day is not a
Business Day, on the next succeeding Business Day), provide documentation in
writing to Purchaser showing that, with respect to the Mortgage Loans identified
in such documentation, all exceptions have been cured ("Cure Documentation").
Upon receipt of such Cure Documentation, Purchaser shall have 20 days in which
to verify that such exceptions have been cured to its satisfaction (the
"Verification Period"). With respect to all Mortgage Loans which the Purchaser
has verified that all exceptions have been cured to its satisfaction, Purchaser
shall, not later than the fifth Business Day following the end of the applicable
Verification Period, pay to the Company an amount equal to the difference
between what Purchaser paid for such Mortgage Loans on the MLPA Closing Date and
what Purchaser would have paid for such Mortgage Loans if they had been priced
as Performing Loans on the MLPA Closing Date. To the extent that during the
Post-Closing Cure Period Purchaser provides documentation satisfactory to the
Company in writing that with respect to any Mortgage Loan that was deemed to
have a Corrected Title Policy on the MLPA Closing Date, the exception noted by
Purchaser in its due diligence had not in fact been cured (such written notice
to specifically identify the exception that was not corrected), Purchaser shall
be entitled to offset the amount payable to the Company pursuant to the
preceding sentence, by an amount equal to the difference between what Purchaser
paid for such Mortgage Loans on the MLPA Closing Date and what Purchaser would
have paid for such Mortgage Loans had they been priced as Unsalable Loans on the
MLPA Closing Date (or, if the funds available for offset are insufficient to
cover such amount, the Company shall pay the Purchaser any shortfall amount
within five Business Days of written notice demanding payment for such
shortfall).
(d) As of the date of this Loan Purchase Agreement, there are 128
Mortgage Loans with missing credit files and 79 Mortgage Loans with missing
credit documents (such 207 Mortgage Loans referred to herein collectively as,
the "Credit File Exception Loans"), and 32 Mortgage Loans with withdrawn legal
files (the "Withdrawn Legal File Loans"), which Loans are listed on Schedules
5a, 5b and 5c respectively, attached hereto. The parties agree that all Credit
File Exception Loans and Withdrawn Legal File Loans shall be priced as Unsalable
Loans as of the MLPA Closing Date. If any of the 207 missing credit files or
missing credit documents or any of the 32 withdrawn legal files are located
during the Post-Closing Cure Period, Purchaser shall review the located credit
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files or credit documents or legal files, as the case may be, and the related
Mortgage Loans shall, if applicable, be repriced as Performing Loans based on
the same criteria that were used to price Mortgage Loans with credit files that
were reviewed prior to the MLPA Closing Date or Mortgage Loans with complete
legal files prior to the MLPA Closing Date, as the case may be, upon Purchaser's
satisfaction that such criteria have been met (the Mortgage Loans that are to be
repriced in accordance with this and the preceding sentence being referred to
collectively as either, the "Cured Credit File Loans" or the "Cured Legal File
Loans", as the case may be). On the fifth Business Day following the end of the
Post-Closing Cure Period, Purchaser shall pay to the Company an amount equal to
the difference between what Purchaser paid for the Credit File Exception Loans
and Withdrawn Legal File Loans, as the case may be, on the MLPA Closing Date and
what Purchaser would have paid for the Credit File Exception Loans and Withdrawn
Legal File Loans, as the case may be, on such date had the Cured Credit File
Loans and Cured Legal File Loans been priced as Performing Loans on the MLPA
Closing Date. In addition, on the fifth Business Day following the end of the
Post-Closing Cure Period, Purchaser shall pay to the Company an amount equal to
$220 with respect to each Cured Legal File Loan.
(e) With respect to the 30 Loans listed on Schedule 6 attached hereto,
the Purchase Price for each such Loan shall be reduced by $350 to account for
missing appraisals.
ARTICLE III
DELIVERY AND PAYMENT
SECTION 3.1. DELIVERY OF MORTGAGE LOANS. On the MLPA Closing Date and
upon payment of the MLPA Purchase Price, ownership of the Mortgage Loans and the
related Loan Files shall transfer to Chase and Seller shall instruct the
custodian of the Loan Files to deliver or release such Loan Files to Chase
whereupon the custodian shall hold such Loan Files as custodian for Chase
pursuant to a custodian agreement to be entered into between Chase and the
custodian of the Loan Files.
SECTION 3.2. [Reserved]
SECTION 3.3. INVESTOR RIGHTS AND SERVICING RIGHTS. The purchase price
of each Mortgage Loan shall include all Investor Rights and Servicing Rights and
benefits pertaining to such Mortgage Loan accruing from and after the MLPA
Closing Date as well as the right to receive all collections of principal and
Accrued Interest (together with all accrued interest on any Non-Performing
Loans) on the Mortgage Loans after the Cut-off Date. Seller shall execute and
deliver documentation (other than assignments and endorsements in accordance
with Section 3.6 hereof), as outlined herein, to transfer all Investor Rights
and Servicing Rights accruing from and after the MLPA Closing Date from Seller
to Chase free and clear of all claims, liens and encumbrances, and to enable
Chase (or its designated representative) to own, sell and service such Mortgage
Loan. Seller hereby covenants to provide to Chase any additional documentation
reasonably requested by Chase for such purposes.
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SECTION 3.4 INSPECTION OF MORTGAGE LOAN FILES. Chase reserves the right
to inspect all Loan Files and Credit Files and satisfy itself that all Mortgage
Loans comply with Seller's representations concerning the Mortgage Loans;
however, no such inspection shall minimize any rights to recovery under the
terms of this Loan Purchase Agreement. All Mortgage Loans that are not Unsalable
Loans shall have a Loan File and Credit File that are complete in all material
respects, consistent with Industry Practice.
SECTION 3.5 [Reserved]
SECTION 3.6 RECORDATION OF ASSIGNMENTS OF MORTGAGE. All Assignments of
Mortgage and endorsements will be prepared by Purchaser in accordance with
commercially reasonable terms and conditions. Purchaser will record such
assignments in those jurisdictions where Purchaser deems appropriate. Seller
shall provide one or more powers of attorney, in the form of Exhibit A-3 hereto
with respect to each of the entities listed on Exhibit E hereto, to the
Purchaser for the purpose of preparing and recording such Assignments of
Mortgage. Purchaser shall deduct $25 per Mortgage Loan (but only for those
Mortgage Loans with respect to which the related Property is located in one of
the states listed on Exhibit F hereto) from the MLPA Purchase Price to cover the
cost of the recordation referred to in this Section 3.6.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF SELLER
SECTION 4.1 REPRESENTATIONS AND WARRANTIES REGARDING THE SELLING
SUBSIDIARIES. Except as set forth in the Company Disclosure Schedule delivered
to CMMC prior to the execution of the Purchase and Sale Agreement, as such
Disclosure Schedule shall be updated in accordance with the requirements of the
Purchase and Sale Agreement, each of the Selling Subsidiaries represents and
warrants to Chase as of the date of execution of this Loan Purchase Agreement
through and as of the MLPA Closing Date, the following:
A. The Company and each Selling Subsidiary is a corporation, industrial
loan corporation or national banking association, as set forth in Section 4.01
of the Company Disclosure Schedule, duly organized and validly existing under
the laws of the jurisdiction of its formation or a banking organization duly
chartered by its chartering authority. Each of the Company and Selling
Subsidiaries is duly qualified as a foreign corporation to conduct its business
in the states of the United States and any foreign jurisdictions where it is
required to be so qualified other than those where the failure to be so
qualified is not material;
B. The Company and each Selling Subsidiary has the full power and
authority and legal right to hold, transfer and convey each Mortgage Loan, to
sell each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate all transactions contemplated by this Loan Purchase Agreement.
The execution and delivery
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of this Loan Purchase Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board and no
other corporate proceedings on the part of the Company or any Selling Subsidiary
are necessary to authorize the execution, delivery or performance of this Loan
Purchase Agreement. The Company and each Selling Subsidiary has the full power
and authority to conduct its business as presently conducted, has duly
authorized the execution, delivery and performance of this Loan Purchase
Agreement and any agreements contemplated hereby, has duly executed and
delivered this Loan Purchase Agreement, and any agreements contemplated hereby,
and this Loan Purchase Agreement and any agreements contemplated hereby
constitutes a legal, valid and binding obligation of the Company and each
Selling Subsidiary, enforceable against it in accordance with its terms, and all
requisite corporate action has been taken by the Company and each Selling
Subsidiary to make this Loan Purchase Agreement and all agreements contemplated
hereby valid and binding upon the Company and each Selling Subsidiary in
accordance with their terms;
C. Neither the execution and delivery of this Loan Purchase Agreement
by the Company and each Selling Subsidiary, nor the origination of the Mortgage
Loans by the Company or the applicable Selling Subsidiary, the sale of the
Mortgage Loans to Chase, the consummation of the transactions contemplated
hereby, or the fulfillment of or compliance with the terms and conditions of
this Loan Purchase Agreement will conflict with or result in any breach or
violation of any of the terms, conditions or provisions of the Company or any
Selling Subsidiary's charter or by-laws or conflict with or result in a material
breach or violation of or a material default under (or require any consent of or
notice to any Person) or give rise to any lien, right of termination, unilateral
modification or amendment, or cancellation of any of the terms, conditions or
provisions of any legal restriction or any agreement or instrument to which the
Company or any Selling Subsidiary is now a party or by which they are bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the material violation of any law, rule, regulation, statute,
ordinance, order, judgment or decree to which the Company or any Selling
Subsidiary or any of their properties are subject, or impair the ability of
Chase to realize on the Mortgage Loans;
D. There is no litigation, suit, action, arbitration proceeding or
investigation pending or threatened, or any order or decree outstanding, with
respect to the Company or any Selling Subsidiary which, either in any one
instance or in the aggregate, is reasonably likely to have a material adverse
effect on the execution, delivery, performance or enforceability of this Loan
Purchase Agreement, or which is reasonably likely to have a material adverse
effect on the Company's or any Selling Subsidiary's ability to perform its
obligations under this Loan Purchase Agreement or the Subservicer's obligations
under the Servicing Agreement;
E. No consent, approval, authorization or order of any court or
governmental or regulatory agency or body is required for the execution,
delivery and performance by the Company or any Selling Subsidiary of or
compliance by the Company or any Selling Subsidiary with this Loan Purchase
Agreement, or the sale of the Mortgage Loans and delivery of the Credit Files
and Loan Files to Chase or the consummation of the
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transactions contemplated by this Loan Purchase Agreement, except for consents,
approvals, authorizations and orders which have been obtained;
F. The Subservicer is an approved servicer of residential mortgage
loans for FNMA and FHLMC, with such facilities, procedures and personnel
necessary for servicing of such mortgage loans in accordance with Accepted
Servicing Practices. The Subservicer has serviced the Mortgage Loans in
accordance with Accepted Servicing Practices;
G. The Offering Materials are true and correct in all material
respects; and
H. The representations and warranties in Exhibit A-1 hereto are in all
material respects similar to the representations and warranties which the
Company or any applicable Affiliate of the Company has made in recent
Company-Sponsored Mortgage Loan Securitization Transactions (except with respect
to representations and warranties relating to underwriting).
SECTION 4.2 REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL MORTGAGE
LOANS.
(a) With respect to each Securitizable Loan and Corporate Finance Loan
that is a Securitizable Loan originated or acquired by such Selling Subsidiary,
as identified in the Mortgage Loan Schedule, such Selling Subsidiary shall
provide the representations and warranties set forth in Exhibit A-1 hereto.
(b) With respect to each Unsalable Loan, each Non-Performing Loan and
each Corporate Finance Loan that would be an Unsalable Loan or a Non-Performing
Loan except for the fact that Corporate Finance Loans are excluded from the
definitions of Unsalable Loan and Non-Performing Loan, originated or acquired by
such Selling Subsidiary, as identified in the Mortgage Loan Schedule, such
Selling Subsidiary such Selling Subsidiary shall provide the representations and
warranties set forth in Exhibit A-2 hereto.
(c) All of the representations and warranties set forth in this Article
IV (including the representations and warranties set forth in Exhibit A-1 and
Exhibit A-2 hereto) shall survive and continue in full force for the remaining
life of the Mortgage Loan and are made for the benefit of Chase and its
successors and assigns.
SECTION 4.3 COVENANT OF SELLER. Seller covenants and agrees with Chase
that Seller shall notify Chase immediately if following the sale of any Mortgage
Loan to Chase, Seller becomes aware of any fact or circumstance regarding any
Mortgage Loan which would have caused any representation or warranty with
respect to any Mortgage Loan to be incorrect.
ARTICLE V
REMEDIES/INDEMNIFICATION
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SECTION 5.1 BREACH OF REPRESENTATION OR WARRANTY.
(a) Except as set forth in paragraph 5.1(b) below, each Selling Subsidiary
shall provide indemnification of Purchaser from and against any Losses suffered,
incurred or sustained by Purchaser resulting from any breach of any
representation or warranty on the part of such Selling Subsidiary under this
Loan Purchase Agreement. Upon sustaining a Loss, Purchaser shall give written
notice to the Selling Subsidiary indicating that the Purchaser has sustained a
Loss and specifying the amount of such Loss. Upon receipt of such notice, the
indemnifying Selling Subsidiary shall have 30 days in which to investigate the
cause of such Loss. The indemnifying Selling Subsidiary shall pay such
indemnification to the Purchaser by wire transfer of immediately available funds
as soon as such indemnifying Selling Subsidiary is satisfied as to the cause of
such Loss and, unless there is a reasonable disagreement as to the cause of such
Loss, not later than the tenth Business Day after the expiration of the 30 day
period referred to above; provided, however, that in the case of any Loss
relating to a Corporate Finance Loan, the indemnifying Selling Subsidiary shall
only be required to indemnify Purchaser as provided in this Section if Purchaser
has provided written notice to Seller that the Corporate Finance Reserve Amount
has been reduced to zero. Except as set forth in paragraph 5.1(b) below, upon
discovery of a breach of any of the representations and warranties or of the
covenants contained in this Loan Purchase Agreement, the party discovering such
breach shall give written notice to the other. Pursuant to the provisions of
Section 8.9 hereof, Chase shall reasonably cooperate with the Company's or the
Selling Subsidiary's attempt to cure any such breach.
With respect to those representations and warranties in Exhibit A-1 or A-2
which include a knowledge qualifier ("to the best knowledge of such Selling
Subsidiary" or similar language), Seller shall indemnify Purchaser for a breach
of the underlying representation and warranty pursuant to the indemnification
provisions as if the knowledge qualifier was omitted and did not apply.
(b) On the Cut-Off Date, Seller shall deliver to Purchaser a schedule of
exceptions to the representations and warranties in Exhibit A-2 with respect to
the Unsalable Loans and the Non-Performing Loans. Such Schedule shall be
attached hereto as Schedule 3. Any items scheduled as exceptions to the
representations and warranties under (iii), (iv), (vii) and (xii) of Exhibit A-2
shall be deemed to be "Enforceability Exceptions" except to the extent that the
scheduled exception does not have a material adverse effect on the validity or
enforceability of the underlying Note or Mortgage. Scheduled exceptions to all
other representations and warranties on Exhibit A-2 that have a material adverse
effect on Purchaser's ability to realize the value of the Mortgage Loan shall be
deemed to be "Non-Enforceability Exceptions."
(i) Non-Enforceability Exceptions. With respect to Mortgage Loans that
are Unsalable Loans, Non-Enforceability Exceptions shall be acceptable to
Purchaser and shall not result in either a request by Purchaser for
indemnification or an adjustment to the MLPA Purchase Price but only if the
total unpaid principal balance as of the Cut-Off Date of the affected Unsalable
Loans (the "Non-Enforceability Exception Loans") does
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not exceed ten percent (10%) of the total unpaid principal balances of all
Unsalable Loans as of the Cut-Off Date (the "Exception Loan Threshold"). If,
however, the total unpaid principal balances as of the Cut-off Date of the
Non-Enforceability Exception Loans does exceed the Exception Loan Threshold,
then Seller shall indemnify Purchaser with respect to the scheduled
Non-Enforceability Exceptions in excess of the Exception Loan Threshold in
accordance with Section 5.4. Non-Performing Loans with Non-Enforceability
Exceptions shall be acceptable to Purchaser and shall not result in either a
request by Purchaser for indemnification or an adjustment to the Purchase Price.
(ii) Enforceability Exceptions. With respect to Unsalable Loans with
Enforceability Exceptions and Non-Performing Loans with Enforceability
Exceptions, Seller shall indemnify Purchaser with respect to such Enforceability
Exceptions in accordance with Section 5.4.
SECTION 5.2 [Reserved]
SECTION 5.3 [Reserved]
SECTION 5.4 INDEMNIFICATION.
(a) Subject to the limitations set forth in Section 5.1, each of
Selling Subsidiary, on the one hand, and Chase on the other hand, hereby agree
to indemnify, save, and hold harmless the other, its successors and assigns,
from and against any and all Losses resulting or arising from its breach of any
representation or warranty, covenant or agreement. This indemnification shall
survive any termination or cancellation of this Loan Purchase Agreement.
(b) Any and all Losses referred to in this Article V shall be computed
on a net basis, after taking into account any amounts received by any party or
its affiliates under any insurance policies or other amounts received under
contracts, any tax deductions taken or other tax benefits received as a result
of such Losses. The indemnified party or its affiliates shall exercise
commercially reasonable good faith efforts to pursue all available insurance
recoveries or claims or other contractual benefits.
(c) If, under any circumstances, a Selling Subsidiary fails to fulfill
indemnification or other obligations pursuant to this Loan Purchase Agreement,
the Company shall be obligated to fulfill such indemnification and other
obligations on behalf of the Selling Subsidiary. If a Selling Subsidiary is
required by the terms of this Loan Purchase Agreement to fulfill an
indemnification or other obligation by or within a specific time period, and
such Selling Subsidiary fails to do so, the Company shall be obligated to
fulfill such indemnification or other obligation on behalf of such Selling
Subsidiary within two (2) Business Days of the expiration of such time period.
(d) If, under any circumstances, Chase fails to fulfill indemnification
or other obligations pursuant to this Loan Purchase Agreement, CMMC shall be
obligated to fulfill such indemnification and other obligations on behalf of
Chase. If Chase is required
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by the terms of this Loan Purchase Agreement to fulfill an indemnification or
other obligation by or within a specific time period, and Chase fails to do so,
CMMC shall be obligated to fulfill such indemnification or other obligation on
behalf of CMMC within two (2) Business Days of the expiration of such time
period.
SECTION 5.5 REMEDIES NOT EXCLUSIVE. The remedies set forth in this Article
V and in other sections of this Loan Purchase Agreement are in addition to and
not to the exclusion of any and all rights and remedies available to Chase at
law or in equity including specific performance.
ARTICLE VI
[RESERVED]
ARTICLE VII
SERVICING
SECTION 7.1 SELLER TO ASSIGN SERVICING. (a) Seller hereby assigns and
releases all Servicing Rights and responsibilities including without limitation,
all rights to receive servicing fees and other servicing-related income and
benefits, with respect to each Mortgage Loan purchased under this Loan Purchase
Agreement to and for the benefit of Chase, as of the MLPA Closing Date. Seller
acknowledges and agrees that Chase shall enjoy such Servicing Rights, all freely
assignable, with no residual, contingent or other claims thereon remaining in
Seller. Chase hereby agrees to assume the servicing obligations of the assigned
Mortgage Loans on the MLPA Closing Date; provided, however, that the obligations
of the Company and Seller set forth in this Loan Purchase Agreement shall
survive such assignment as obligations of the Company and Seller.
(b) The Subservicer shall subservice the Mortgage Loans after the MLPA
Closing Date in accordance with the terms of that certain Loan Servicing
Agreement, dated as of July 17, 1996, as amended, by and between Chase Manhattan
Mortgage Corporation, as owner and master servicer, and Advanta Mortgage Corp.
USA, as subservicer (as amended, the "Servicing Agreement"). In consideration of
the Subservicer subservicing the Mortgage Loans in accordance with the Servicing
Agreement, the Subservicer shall receive the Servicing Fee (as defined in the
Servicing Agreement) in the manner and amount set forth in the Servicing
Agreement (the "Servicing Fee"). Notwithstanding the foregoing, the set up fees
in Section 4.10(c) of the Servicing Agreement and the termination fees in
Section 6.15(c) of the Servicing Agreement shall not apply to the parties
hereto.
SECTION 7.2 NON-SOLICITATION. The Seller and the Company each hereby
agrees not to take any action or allow any action to be taken by any of its
affiliates to solicit prepayment by any borrower. This non-solicitation
provision shall be deemed to be on terms consistent with the non-solicitation
provisions of Section 6.14 of the Purchase and Sale Agreement.
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ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.1 ASSIGNMENT. This Loan Purchase Agreement shall be binding
upon and inure to the benefit of the parties hereto and any permitted assignees.
Seller may not assign, or delegate any of its rights, duties, and/or obligations
hereunder without the written permission of Chase which may be withheld in its
sole discretion. Chase may assign this Loan Purchase Agreement to any affiliate
without consent; provided that such affiliate agrees in writing to be bound by
all of the terms, conditions and provisions contained in this Loan Purchase
Agreement.
SECTION 8.2 RELATIONSHIP BETWEEN PARTIES. No exclusive relationship
between Seller and Chase shall result from this agreement. Seller is an
independent contractor and nothing herein shall be construed to make Seller a
partner, joint venture, employee or agent of Chase. Seller shall not make any
statement which leads any third party to reasonably believe that it is an agent
of Chase, and shall have no authority to bind or make any representations on
behalf of Chase. Seller shall not use or refer to Chase's name in any form of
advertising, written materials or circulars except as may be required by law.
SECTION 8.3 NO THIRD PARTY BENEFITS. This Loan Purchase Agreement is
made for the express benefit of Seller and Chase, not for the benefit or
interest of any other persons or entities, and accordingly, no third party shall
obtain or acquire any rights or interest in this Loan Purchase Agreement or by
reason of the performance or failure of performance of either of the parties
hereto or of their respective rights, privileges, duties or obligations arising
hereunder.
SECTION 8.4 ENTIRE AGREEMENT. This Loan Purchase Agreement, the
Purchase and Sale Agreement and the Servicing Agreement, including all exhibits
and schedules attached hereto or thereto together with any addendum(s) attached
hereto or thereto and executed by all parties constitute the entire
understanding of the parties regarding the subject matter hereof and supersede
all other prior disclosures, agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof. Any
additions, changes, amendments or modifications of this Loan Purchase Agreement
must be in writing and executed by all of the parties hereto. The invalidity of
any portion of this Loan Purchase Agreement shall not affect the remaining
provisions.
SECTION 8.5 NOTICE. Any notice required to be given to a party hereto
under the provisions of this Loan Purchase Agreement must be in writing and
delivered either personally, by telecopy transmission, or by certified mail to
the other party at the following addresses, or such other address as may
hereafter be furnished to the other party by like notice:
If to Chase or CMMC:
c/o Chase Manhattan Mortgage Corporation
000 Xxxx Xxxxxxxxx
00
00
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxx
If to the Company or Seller:
c/o Advanta Corp.
Welsh & XxXxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx Xxxx
Any such demand, notice or communication hereunder shall be deemed to have been
received on the date delivered to or received at the premises of the addressee
(as evidenced, in the case of registered or certified mail, by the date noted on
the return receipt).
SECTION 8.6 CAPTIONS. Paragraph or other headings contained in this
Loan Purchase Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Loan Purchase Agreement.
SECTION 8.7 GOVERNING LAW. This Loan Purchase Agreement and the
interpretation of its terms shall be governed by the laws of the State of
Delaware without giving effect to its principles of conflicts of law. THE
PARTIES WAIVE THEIR RIGHTS TO A JURY TRIAL IN ANY ACTION UNDER THIS LOAN
PURCHASE AGREEMENT.
SECTION 8.8 COUNTERPARTS. This Loan Purchase Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original and
all of which, taken together, shall be deemed to be one Loan Purchase Agreement.
SECTION 8.9 COOPERATION IN CURING BREACHES OF REPRESENTATIONS AND
WARRANTIES; ACCESS TO INFORMATION. After the closing under the Purchase and Sale
Agreement Purchaser shall reasonably cooperate with the Company's or any Selling
Subsidiary's attempt to cure any breach of a representation or warranty with
respect to any Mortgage Loan. After the closing under the Purchase and Sale
Agreement, the parties hereto shall comply with the provisions of Section 6.15
of the Purchase and Sale Agreement.
SECTION 8.10 CONFIDENTIALITY. Seller shall not, at any time during or
following termination of this Loan Purchase Agreement, regardless of the manner,
reason, time or cause of such termination, directly or indirectly disclose or
furnish to any person not entitled to receive the same for the immediate benefit
of Chase (except to the extent actually required in connection with any
litigation between parties arising out of this Loan Purchase Agreement or by
applicable law), any trade secrets or confidential information including, but
not limited to, information related to Chase business operations, credit
policies, procedures and customers. Once the Closing has occurred
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under the Purchase and Sale Agreement, this Section 8.10 shall be subject to
Section 6.14(d) of the Purchase and Sale Agreement which governs the use of
"Confidential Business Information" and such Section 6.14(d) is incorporated
herein by reference in its entirety.
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IN WITNESS WHEREOF, each of the parties below has Loan Purchase Agreement
to be executed as of the date and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION
BY: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
NAME: Xxxxxx X. Xxxxxxxx
TITLE: Vice President
CHASE MANHATTAN MORTGAGE CORPORATION
BY: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
NAME: Xxxxxx X. Xxxxxxxx
TITLE: Vice President
ADVANTA CORP., FOR ITSELF AND ON BEHALF
OF THE SELLING SUBSIDIARIES
BY: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
NAME: Xxxxxxx X. Xxxxxx
TITLE: President and Vice Chairman
ADVANTA MORTGAGE CORP. USA,
AS SUBSERVICER
BY: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
NAME: Xxxxxxx X. Xxxxxx
TITLE: President
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Exhibit A-1
Representations and Warranties for Securitizable Loans and Corporate Finance
Loans
With respect to each Securitizable Loan and Corporate Finance Loan
originated or acquired by such Selling Subsidiary, as identified in the Mortgage
Loan Schedule, such Selling Subsidiary hereby represents, warrants and
covenants, as of the MLPA Closing Date, as follows:
(i) the information with respect to each Mortgage Loan set
forth in the Mortgage Loan Schedule is true and correct in all material
respects;
(ii) all of the original or certified documentation required
to be delivered to Purchaser pursuant to this Loan Purchase Agreement
(including all material documents related thereto) with respect to each
Mortgage Loan has been or will be delivered to Purchaser in accordance
with the terms of the Loan Purchase Agreement; each of the documents
and instruments specified to be included therein has been duly executed
and is in due and proper form, and each such document or instrument is
in a form generally acceptable to prudent mortgage lenders that
regularly originate or purchase mortgage loans comparable to the
Mortgage Loans for sale to prudent investors in the secondary market
that invest in mortgage loans such as the Mortgage Loans;
(iii) each Property is improved by a one-to-four family
residential dwelling, condominium or townhouse, which may include a
manufactured home which qualifies as eligible for inclusion in a REMIC;
provided, however, that no more than 10.0% by aggregate principal
balance of the Securitizable Loans and Corporate Finance Loans as of
the Cut-Off Date are leasehold mortgages;
(iv) each Mortgage is either a valid and subsisting first,
second or third lien of record on the Property, as reflected on the
Mortgage Loan Schedule, (subject in the case of any Junior Mortgage
Loan only to a Senior Lien on such Property) and subject in all cases
to the exceptions to title set forth in the Mortgage Loan's title
insurance policy, which exceptions are generally acceptable to banking
institutions in connection with their 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;
(v) immediately prior to the transfer and assignment herein
contemplated, each Selling Subsidiary held good and indefeasible title
to, and was the owner of, each Mortgage Loan originated or acquired by
such Selling Subsidiary and conveyed by such Selling Subsidiary to
Purchaser; the Mortgage Loan was not subject to liens, charges,
mortgages, encumbrances or rights of others except liens which will be
released simultaneously with such transfer and assignment; and
immediately upon the transfer and assignment herein contemplated,
Purchaser will hold good and indefeasible title to, and be the sole
owner of, each Mortgage
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Loan subject to no liens, charges, mortgages, encumbrances or rights of
others except liens which will be released simultaneously with such
transfer and assignment (and except, in the case of the Corporate
Finance Loans, subject to the Corporate Finance Agreements);
(vi) no Securitizable Loans and Corporate Finance Loans are
Non-Performing Loans as of the Cut-Off Date;
(vii) to the best knowledge of such Selling Subsidiary, there
is no delinquent tax or assessment lien on any Property, and each
Property is free of substantial damage and is in good repair;
(viii) to the best knowledge of such Selling Subsidiary, there
is no valid and enforceable right of rescission, offset, defense or
counterclaim to any Note or Mortgage, including the obligation of the
related Mortgagor to pay the unpaid principal balance of or interest on
such Note or the defense of usury, nor will the operation of any of the
terms of the Note or the Mortgage, or the exercise of any right
thereunder, render either the 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;
(ix) to the best knowledge of such Selling Subsidiary, there
is no mechanics' lien or claim for work, labor or material affecting
any Property which is or may be a lien prior to, or equal with, the
lien of the related Mortgage except those which are insured against by
any title insurance policy referred to in paragraph (xi) below;
(x) each Mortgage Loan at the time it was made complied in all
material respects with all applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act and other consumer protection laws, real estate
settlement procedure, usury, equal credit opportunity, disclosure and
recording laws;
(xi) with respect to each Mortgage Loan, a title search or a
lender's title insurance policy, issued in standard California Land
Title Association form or American Land Title Association 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 Property is situated, in an amount at least equal to the
original principal amount of such Securitizable Loan insuring the
mortgagee's interest under the related Securitizable Loan as the holder
of a valid first, second or third mortgage lien of record on the
Property described in the related Mortgage, as the case may be, subject
only to exceptions of the character referred to in paragraph (iv)
above, was effective on the date of the origination of such Mortgage
Loan, and, as of the Cut-Off Date such policy, if issued or upon its
issuance, will be valid and thereafter such policy shall continue in
full force and effect;
(xii) the improvements upon each Property are covered by a
valid and existing
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hazard insurance policy (which may be a blanket policy) with a
generally acceptable carrier that provides for fire and extended
coverage representing coverage not less than the least of (A) the
outstanding principal balance of the related Mortgage Loan (together,
in the case of a Junior Mortgage Loan, with the outstanding principal
balance of the Senior Lien), (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis or (C) the
full insurable value of the Property;
(xiii) each Mortgage and Note, including any Prepayment
Penalty, 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), and all parties to each Mortgage Loan had full legal capacity to
execute all documents relating to such Mortgage Loan and convey the
estate therein purported to be conveyed and the Note and Mortgage have
been duly and properly executed by such parties;
(xiv) each original Mortgage was recorded or is in the process
of being recorded, and all subsequent assignments of the original
Mortgage have been or are in the process of being recorded in the
appropriate jurisdictions wherein such recordation is necessary to
perfect the lien thereof for the benefit of the applicable Selling
Subsidiary;
(xv) the terms of each Note and each 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 owners; the substance of each Note and/or Mortgage as
modified or altered, if applicable, is reflected on the Mortgage Loan
Schedule;
(xvi) the proceeds of each Mortgage Loan (other than HELOCs)
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 such Mortgage Loans were paid;
(xvii) except as otherwise required by law or pursuant to the
statute under which the related Mortgage Loan was made, the related
Note is not and has not been secured by any collateral, pledged account
or other security except the lien of the corresponding Mortgage;
(xviii) to the best knowledge of such Selling Subsidiary, no
Mortgage Loan was originated under a buydown plan;
(xix) to the best knowledge of such Selling Subsidiary, no
Mortgage Loan provides for negative amortization, has a shared
appreciation feature, or other contingent
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interest feature;
(xx) each Property is located in the state identified in the
Mortgage Loan Schedule and consists of one or more parcels of real
Property with a residential dwelling erected thereon;
(xxi) each Mortgage contains a provision for the acceleration
of the payment of the unpaid principal balance of the related Mortgage
Loan in the event the related Property is sold without the prior
consent of the mortgagee thereunder;
(xxii) any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-Off Date, have been consolidated
with the outstanding principal amount secured by the related Mortgage,
and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Mortgage Loan
Schedule. No Note (other than Credit Line Agreements for HELOCs)
permits or obligates the Servicer or the Sub-Servicer to make future
advances to the related Mortgagor at the option of the Mortgagor;
(xxiii) to the best knowledge of such Selling Subsidiary,
there is no proceeding pending or threatened for the total or partial
condemnation of any Property, nor is such a proceeding currently
occurring, and each Property is undamaged by waste, fire, earthquake or
earth movement, flood, tornado or other casualty, so as to affect
adversely the value of the Property as security for the Mortgage Loan
or the use for which the premises were intended;
(xxiv) all of the improvements which were included for the
purposes of determining the appraised value of any Property lie wholly
within the boundaries and building restriction lines of such Property,
and no improvements on adjoining properties encroach upon such
Property, and, if a title insurance policy exists or upon its issuance
with respect to such Property, are stated in such title insurance
policy and affirmatively insured;
(xxv) to the best knowledge of such Selling Subsidiary, no
improvement located on or being part of any 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 each 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 such Property is lawfully occupied under
the applicable law;
(xxvi) with respect to each Junior Mortgage Loan, either (A)
no consent for such Mortgage Loan was required by the holder of the
related Senior Lien prior to the making of such Mortgage Loan or (B)
such consent has been obtained and is contained in the related Mortgage
File;
(xxvii) each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against
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the related Property of the benefits of the security, including (A) in
the case of a Mortgage designated as a deed of trust, by trustee's sale
and (B) otherwise by judicial foreclosure. To the best knowledge of
such Selling Subsidiary, there is no homestead or other exemption
available which materially interferes with the right to sell the
related Property at a trustee's sale or the right to foreclose the
related Mortgage;
(xxviii) except as provided by paragraph (vi) above, there is
no default, breach, violation or event of acceleration existing under
any Mortgage or the related 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 the applicable Selling Subsidiary has not waived any default,
breach, violation or event of acceleration;
(xxix) to the best knowledge of such Selling Subsidiary, 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, except in connection with an assumption agreement and which has
been delivered to the Trustee;
(xxx) the related Selling Subsidiary has no actual knowledge
that there exist on any Property any hazardous substances, hazardous
wastes or solid wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation and Liability Act, the Resource
Conservation and Recovery Act of 1976, or other federal, state or local
environmental legislation.
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Exhibit A-2
Representations and Warranties for Unsalable Loans and Non-Performing
Loans
With respect to each Unsalable Loan and each Non-Performing Loan
originated or acquired by such Selling Subsidiary, as identified in the Mortgage
Loan Schedule, such Selling Subsidiary hereby represents, warrants and
covenants, as of the MLPA Closing Date, as follows:
(i) the information with respect to each Mortgage Loan set
forth in the Mortgage Loan Schedule is true and correct in all material
respects;
(ii) other than with respect to the Unsalable Loans, all of
the original or certified documentation required to be delivered to
Purchaser pursuant to this Loan Purchase Agreement (including all
material documents related thereto) with respect to each Mortgage Loan
has been or will be delivered to Purchaser in accordance with the terms
of this Loan Purchase Agreement; each of the documents and instruments
specified to be included therein has been duly executed and is in due
and proper form, and each such document or instrument is in a form
generally acceptable to prudent mortgage lenders that regularly
originate or purchase mortgage loans comparable to the Mortgage Loans
for sale to prudent investors in the secondary market that invest in
mortgage loans such as the Mortgage Loans;
(iii) each Mortgage is either a valid and subsisting first,
second or third lien of record on the Property, as reflected on the
Mortgage Loan Schedule (subject in the case of any Junior Mortgage Loan
only to a Senior Lien on such Property) and subject in all cases to the
exceptions to title set forth in the Mortgage Loan's title insurance
policy, which exceptions are generally acceptable to banking
institutions in connection with their 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;
(iv) immediately prior to the transfer and assignment herein
contemplated, each Selling Subsidiary held good and indefeasible title
to, and was the owner of, each Mortgage Loan originated or acquired by
such Selling Subsidiary and conveyed by such Selling Subsidiary to
Purchaser; the Mortgage Loan was not subject to liens, charges,
mortgages, encumbrances or rights of others except liens which will be
released simultaneously with such transfer and assignment; and
immediately upon the transfer and assignment herein contemplated,
Purchaser 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 liens which will be released
simultaneously with such transfer and assignment;
(v) other than Non-Performing Loans, no Mortgage Loans is a
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Performing Loan as of the Cut-Off Date;
(vi) except as set forth in Sections 4.07-6(b) and 4.31 of the
Company Disclosure Schedule to the Purchase and Sale Agreement, to the
best knowledge of such Selling Subsidiary, there is no delinquent tax
or assessment lien on any Property, and each Property is free of
substantial damage and is in good repair;
(vii) to the best knowledge of such Selling Subsidiary, there
is no valid and enforceable right of rescission, offset, defense or
counterclaim to any Note or Mortgage, including the obligation of the
related Mortgagor to pay the unpaid principal balance of or interest on
such Note or the defense of usury, nor will the operation of any of the
terms of the Note or the Mortgage, or the exercise of any right
thereunder, render either the 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;
(viii) to the best knowledge of such Selling Subsidiary, there
is no mechanics' lien or claim for work, labor or material affecting
any Property which is or may be a lien prior to, or equal with, the
lien of the related Mortgage except those which are insured against by
any title insurance policy referred to in paragraph (x) below;
(ix) each Mortgage Loan at the time it was made complied in
all material respects with all applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act and other consumer protection laws, real estate
settlement procedure, usury, equal credit opportunity, disclosure and
recording laws;
(x) with respect to each Mortgage Loan, a title search or a
lender's title insurance policy, issued in standard California Land
Title Association form or American Land Title Association 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 Property is situated, in an amount at least equal to the
original principal amount of such Mortgage Loan insuring the
mortgagee's interest under the related Unsalable Loan as the holder of
a valid first, second or third mortgage lien of record as set forth in
the Mortgage Loan Schedule on the Property described in the related
Mortgage, as the case may be, subject only to exceptions of the
character referred to in paragraph (iii) above, was effective on the
date of the origination of such Mortgage Loan, and, as of the Cut-Off
Date such policy, if issued or upon its issuance, will be valid and
thereafter such policy shall continue in full force and effect;
(xi) the improvements upon each Property are covered by a
valid and existing hazard insurance policy (which may be a blanket
policy) with a generally acceptable carrier that provides for fire and
extended coverage representing coverage not less than the least of (A)
the outstanding principal balance of the
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related Mortgage Loan (together, in the case of a Junior Mortgage Loan,
with the outstanding principal balance of the Senior Lien), (B) the
minimum amount required to compensate for damage or loss on a
replacement cost basis or (C) the full insurable value of the Property;
(xii) each Mortgage and Note, including any Prepayment
Penalty, 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), and all parties to each Mortgage Loan had full legal capacity to
execute all documents relating to such Mortgage Loan and convey the
estate therein purported to be conveyed and the Note and Mortgage have
been duly and properly executed by such parties;
(xiii) each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage have been or are in the process of being recorded in
the appropriate jurisdictions wherein such recordation is necessary to
perfect the lien thereof for the benefit of the applicable Selling
Subsidiary;
(xiv) the terms of each Note and each Mortgage have not been
materially impaired, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of the owners; the substance of each Note and/or Mortgage
as modified or altered, if applicable, is reflected on the Mortgage
Loan Schedule.
(xv) the proceeds of each Mortgage Loan (other than HELOCs)
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 such Mortgage Loans were paid;
(xvi) except as otherwise required by law or pursuant to the
statute under which the related Mortgage Loan was made, the related
Note is not and has not been secured by any collateral, pledged account
or other security except the lien of the corresponding Mortgage;
(xvii) to the best knowledge of such Selling Subsidiary, no
Mortgage Loan was originated under a buydown plan;
(xviii) to the best knowledge of such Selling Subsidiary, no
Loan provides for negative amortization, has a shared appreciation
feature, or other contingent interest feature;
(xix) each Property is located in the state identified in the
Mortgage Loan Schedule
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and consists of one or more parcels of real Property with a residential
dwelling erected thereon;
(xx) each Mortgage contains a provision for the acceleration
of the payment of the unpaid principal balance of the related Mortgage
Loan in the event the related Property is sold without the prior
consent of the mortgagee thereunder;
(xxi) any advances made after the date of origination of a
Mortgage Loan but prior to the Cut-Off Date, have been consolidated
with the outstanding principal amount secured by the related Mortgage,
and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term reflected on the Mortgage Loan
Schedule. No Note (other than Credit Line Agreements for HELOCs)
permits or obligates the Servicer or the Sub-Servicer to make future
advances to the related Mortgagor at the option of the Mortgagor;
(xxii) to the best knowledge of the Selling Subsidiary, there
is no proceeding pending or threatened for the total or partial
condemnation of any Property, nor is such a proceeding currently
occurring, and each Property is undamaged by waste, fire, earthquake or
earth movement, flood, tornado or other casualty, so as to affect
adversely the value of the Property as security for the Mortgage Loan
or the use for which the premises were intended;
(xxiii) all of the improvements which were included for the
purposes of determining the appraised value of any Property lie wholly
within the boundaries and building restriction lines of such Property,
and no improvements on adjoining properties encroach upon such
Property, and, if a title insurance policy exists or upon its issuance
with respect to such Property, are stated in such title insurance
policy and affirmatively insured;
(xxiv) to the best knowledge of such Selling Subsidiary, no
improvement located on or being part of any 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 each 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 such Property is lawfully occupied under
the applicable law;
(xxv) with respect to each Junior Mortgage Loan, either (A) no
consent for such Unsalable Loan was required by the holder of the
related Senior Lien prior to the making of such Mortgage Loan or (B)
such consent has been obtained and is contained in the related Mortgage
File;
(xxvi) each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Property of the
benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and
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(B) otherwise by judicial foreclosure. To the best knowledge of such
Selling Subsidiary, there is no homestead or other exemption available
which materially interferes with the right to sell the related Property
at a trustee's sale or the right to foreclose the related Mortgage;
(xxvii) other than with respect to the Non-Performing Loans,
except as provided by paragraph (v) above, there is no default, breach,
violation or event of acceleration existing under any Mortgage or the
related 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 the
applicable Selling Subsidiary has not waived any default, breach,
violation or event of acceleration;
(xxviii) to the best knowledge of such Selling Subsidiary, 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, except in connection with an assumption agreement and which has
been delivered to the Trustee;
(xxix) the related Selling Subsidiary has no actual knowledge
that there exist on any Property any hazardous substances, hazardous
wastes or solid wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation and Liability Act, the Resource
Conservation and Recovery Act of 1976, or other federal, state or local
environmental legislation.
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SCHEDULE 1
MLPA PURCHASE PRICE
On the MLPA Closing Date, the purchase price for the Mortgage Loans within a
Pricing Category shall be equal to the product of (i) the Pricing Category Price
(as set forth in Column B under "New Price" on Exhibit B) for the applicable
Pricing Category (as set forth under Column A of Exhibit B) and, (ii) the unpaid
principal balance as of the Cut-Off Date of all Mortgage Loans within the
applicable Pricing Category. The aggregate purchase price to be paid by
Purchaser on the MLPA Closing Date (the "MLPA Purchase Price") for the Mortgage
Loans shall be the sum of the products calculated in accordance with the
preceding sentence. The MLPA Purchase Price (less the applicable ARM holdback,
document holdback and CF holdback) plus Accrued Interest (exclusive of accrued
interest on Non-Performing Loans) shall be payable by Chase to Selling
Subsidiaries on the MLPA Closing Date, by wire transfer of immediately available
federal funds to such bank account or accounts as shall be designated by the
Seller in writing two (2) Business Days prior to the MLPA Closing Date.
Exhibit "B" sets forth the MLPA Purchase Price of the Mortgage Loans determined
based on the unpaid principal balance as of November 30, 2000 (the "Pricing
Cut-Off Date"). The MLPA Purchase Price as of the Pricing Cut-Off Date may be
adjusted between the Pricing Cut-Off Date and the MLPA Closing Date only to the
extent that Purchaser's due diligence performed in accordance with paragraph 8
of the Letter Agreement, conclusively reveals that any of the Mortgage Loans
were improperly categorized with respect to the Pricing Categories or as
described in paragraph 6(c) of the Letter Agreement, with respect to
Non-Enforceability Exceptions in excess of the Exception Loan Threshold and with
respect to Enforceability Exceptions. In the event that any Mortgage Loan is
recategorized into a different Pricing Category as a result of Purchaser's due
diligence in accordance with paragraph 8 of the Letter Agreement or due to the
Exception Loan Threshold having been exceeded, only the amount reflected as the
unpaid principal balance associated with the applicable Pricing Categories shall
be impacted.
With respect to each of the Closed End Performing, and Open End Performing
subcategories, a pricing adjustment, shown on Exhibit B, shall be made with
respect to the portion of each such subcategory which constitutes Mortgage Loans
31-60 days delinquent as of the Cut-off Date in excess of 1.5% of the aggregate
outstanding principal balance of all of the Mortgage Loans in such subcategory.
Such pricing adjustments shall cause a reduction in the purchase price for the
Mortgage Loans in each such subcategory equal to, with respect to any such
subcategory, one half of the product of (i) an amount equal to the amount of the
aggregate outstanding principal balance of the Mortgage Loans in the related
subcategory that were 31-60 days delinquent as of the Cut-off Date which exceeds
1.5% of the aggregate outstanding principal balance of all of the Mortgage Loans
in such subcategory and (ii) the percentage which is equal to the difference
between (A) the weighted average purchase price percentage for the Mortgage
Loans in such subcategory and (B) the weighted average purchase price percentage
for the nonperforming loans corresponding to such subcategory (e.g., the
difference between (A)
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the weighted average purchase price percentage for all Closed End Performing
Mortgage Loans and (B) the weighted average purchase price percentage for all
Closed End Nonperforming Mortgage Loans).
Notwithstanding anything to the contrary in this Loan Purchase Agreement, it
shall be a condition precedent to Seller's obligation to sell the Mortgage Loans
under this Loan Purchase Agreement and the Company's obligation to close under
the Purchase and Sale Agreement that the MLPA Purchase Price payable to Seller
on the MLPA Closing Date for the Mortgage Loans identified in Exhibit A attached
to this Loan Purchase Agreement not be less than $829,432,130 by $10,000,000 or
more (including by reason of the removal of any loans by Seller from the
Mortgage Loans as a result of Non-Enforceability Exceptions or Enforceability
Exceptions, or any recategorization attributable to Purchaser's due diligence or
to Seller's representations or warranties, but exclusive of amounts related to
Mortgage Loan principal payments and payoffs between the Pricing Cut-off Date
and the Cut-off Date, the ARM holdback, document holdback and the CF Holdback).
All Corporate Finance Loans shall be categorized on Exhibit B hereto in the
following Pricing Category: "Corporate Finance Loans."
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Copies of the following exhibits and schedules are omitted from filing herewith
in accordance with paragraph (b)(2) of Item 601 of Regulation S-K, but will be
furnished to the Securities and Exchange Commission upon request of the staff:
Exhibit A Mortgage Loan Schedule
Exhibit A-3 Limited Power of Attorney
Exhibit B Mortgage Loans
Exhibit C Credit File Documentation
Exhibit D Loan File Documentation
Exhibit E Selling Subsidiaries
Exhibit F Priority States
Schedule 2 Legal File Exceptions
Schedule 3 Representation and Warranty Exceptions
Schedule 4 Title Policy Missing/Incorrect Exceptions
Schedule 5(a) Credit File Exception Loans: Missing Credit Files
Schedule 5(b) Credit File Exception Loans: Missing Credit Documents
Schedule 5(c) Withdrawn Legal File Loans
Schedule 6 Missing Appraisals
Company Disclosure Schedule
