MASTER AGREEMENT FOR SALE AND PURCHASE OF MORTGAGES
This Master Agreement for Sale and Purchase of Mortgages is made this
3rd day of June, 1997, by and between ContiMortgage Corporation, located at 000
Xxxxxxxxxx Xxxx, Xxxxxxx, XX 00000, a Corporation organized and existing under
the laws of the State of Delaware ("Buyer") and Westmark Mortgage Corporation,
located at 000 X.X. Xxxxx Xxxxxx, Xxxxx 0, Xxxxxx Xxxxx, XX 00000, a Corporation
organized and existing under the laws of California ("Seller").
I. RECITALS
WHEREAS, the Seller desires from time to time to offer for sale to the
Buyer and the Buyer desire from time to time to purchase from the Seller on the
terms and subject to the conditions set forth herein certain Loans owned by the
Seller evidenced by notes and secured by mortgages of the agreed-upon priority
on real property owned by the borrowers ("Borrowers").
WHEREAS, the Buyer and the Seller desire to enter into this agreement
to govern the sale and purchase of said Loans.
Now, therefore, in consideration of the above recitals and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
II. DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(A) Agreement: shall mean this Agreement as same may be amended and
supplemented from time to time. The parties agree that this Agreement shall be
used as the master sale and purchase agreement for those loans purchased by
Buyer from Seller in the future, unless otherwise agreed in writing by the
parties.
(B) Loan to Value Ratio: shall mean the sum of the original principal
amount of the Mortgage Loan and the outstanding principal balance of the first
Mortgage (the "First Mortgage"), if any, at the time of origination of the
Mortgage Loan divided by the lesser of the original purchase price of the
Mortgaged Property if Borrower purchased the Mortgaged Property within twelve
(12) months of the Mortgage Loan origination date or the appraised value of the
Mortgaged Property.
(C) Loan: the Note, the related Mortgage and the Related Assets are
referred to as "Loan," and collectively as "Loans."
(D) "Marked-Up" Title Insurance Policy, Binder or Certificate: a title
insurance policy as further defined in Article V(B)9 of this Agreement in which
all liens, mortgages, claims, assessments, defects, encumbrances and other
exceptions affecting or against the Mortgaged Property have been removed and are
insured against in favor of Buyer by the title insurance company unless
otherwise agreed or approved by the Buyer in writing.
(E) Mortgage: the Note, bond, deed of trust, Mortgage, mortgage
warranty, extension agreement assumption of indebtedness, assignment and any
other documents constituting the basic instruments for real estate security on
real property owned by the Borrower in the state in which the Mortgaged Property
is located.
(F) Essential Mortgage File Documents: as to each Mortgage Loan, the
original of the Note, Mortgage, title insurance policy including endorsements or
"marked-up" title commitment, Related Assets and the additional documents as
described in Exhibit "A," attached hereto and made a part hereof, as applicable.
(G) Mortgage Loans: the Loans identified in the Purchase Schedule
(exhibit "B") as from time to time are subject to this Agreement.
(H) Mortgaged Property or Subject Property: the residential real
property subject to the Mortgage which secures the Mortgage Loan.
(I) Mortgagor or Borrower: the obligor under a Mortgage Loan.
(J) Note: the original Note or bond or other evidence of indebtedness
evidencing the indebtedness of the Borrower/Mortgagor under a Mortgage Loan.
(K) Purchase Price: the purchase price for the Loan(s) described on
each Purchase Schedule shall be an amount as of the Settlement Date equal to the
sum of the: (1) unpaid principal balances of the Note(s); (2) all interest
accrued (up to but not including the Settlement Date) but unpaid on the Note(s)
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(prorated on a 30-day month - 360-day year); and (3) any premiums due Seller, if
applicable, in accordance with the Approval Advice or Purchase Schedule; (4)
less any discount due Buyer, if applicable, in accordance with the Approval
Advice or Purchase Schedule; and (5) less the fee for recordation of
assignments, if applicable.
(L) Related Assets: the documents as further defined in Article
IV(A)(iv) of this Agreement.
(M) Settlement Date: the date of the funding or payment of Purchase
Price by the Buyer for Loans purchased pursuant to this Agreement. Each
Settlement shall be held at the offices of ContiMortgage Corporation, 000
Xxxxxxxxxx Xxxx, Xxxxxxx, XX 00000.
(N) Underwriting Guidelines/Purchasing Guidelines: Exhibit "C" attached
hereto and made a part hereof as may from time to time be amended by Buyer.
III. OFFER TO SELL AND ACCEPTANCE OF OFFER
(A) Offer. The Seller may offer from time to time to submit to the
Buyer a list of the Loans, along with the Essential Mortgage File Documents, as
defined herein, for each of the Loans, for the Buyer's review. The Buyer shall
then deliver to the Seller a Purchase Schedule on which the Buyer has indicated
which Loans, if any, the Buyer is offering to purchase from the Seller and the
Purchase Price for the Loans Buyer is willing to purchase.
(B) Acceptance. The Seller shall endorse the Notes and Mortgages
evidencing the Loans on which the Seller agrees to accept the Buyer's offer to
purchase. Such endorsement shall constitute the Seller's acceptance of the
Buyer's offer to purchase the indicated Loans pursuant to the terms and
conditions of this Agreement.
On occasion, Buyer may issue to Seller a written Approval Advice in the
form attached hereto, made a part hereto and marked Exhibit "D," to cover a
specific Loan purchase by Buyer hereunder which is approved by Buyer in advance
of said specific Loan being made by Seller. Any purchase made hereunder that is
subject to an Approval Advice shall be governed first by the terms of such
Approval Advice and then by the terms of this Agreement, and to the extent of a
conflict between the Approval Advice and this Agreement, the Approval Advice
shall govern for that purchase and only that purchase.
Buyer shall have the absolute and sole discretion and option to agree
or decline to purchase any Loan(s) submitted by Seller for review.
IV. PURCHASE AND SALE OF LOANS
(A) Delivery of Loans.
On or before the business day immediately preceding each Settlement
Date, the Seller shall deliver to the Buyer the following for each Loan
purchased:
(i) Those Loans described by the Buyer on each Purchase Schedule
which are purchased by Buyer pursuant to this Agreement.
(ii) The agreed-upon priority liens and/or Mortgages on Subject
Property.
(iii) The Note(s) and the Mortgage(s) endorsed by an authorized
officer of Seller to the Buyer pursuant to the language set forth on Exhibit "E,
" attached hereto and made a part hereof together with an executed individual
assignment to the Buyer, in recordable form and originals of all intervening
assignments, if any, of the Seller's beneficial interest in the Mortgage,
showing a complete chain of title from origination to the Seller, including
warehousing assignment, with evidence of recording thereon.
(iv) Any and all documents, instruments, collateral agreements,
and assignments and endorsements for all documents, instruments and collateral
agreements, referred to in the Notes and/or Mortgages or related thereto,
including, without limitation, current insurance policies (private mortgage
insurance, if applicable; flood insurance, if applicable; hazard insurance;
title insurance; and other applicable insurance policies) covering the Subject
Property or relating to the Notes and all files, books, papers, ledger cards,
reports and records including, without limitation, loan applications, Borrower
financial statements, separate assignment of rents, if any, credit reports and
appraisals, relating to the Loans (the "Related Assets"). In all cases, the
Related Assets shall be the original documents.
(v) The Essential Mortgage File Document List, including all
writings evidencing the Loan(s) purchased by Buyer. In all cases, these
documents shall be the original documents.
(vi) In the event that Seller cannot deliver to Buyer a duly
recorded assignment of Mortgage or any other document required to be recorded
under this Agreement on the Settlement Date solely because of a delay caused by
the public recording office when such document(s) has been delivered for
recordation, Seller shall deliver to the Buyer a certified copy of each such
document(s) with a statement thereon signed by an officer of the Seller
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certifying each to be a true and correct copy of document(s) delivered to the
appropriate public recording official for recordation. Seller shall deliver to
Buyer such recorded document(s) with evidence of recording indicated thereon no
later than IS days after Seller receives such document, but in any event, no
later than 120 days from the Settlement Date.
(B) Purchase and Sale.
On each Settlement Date hereunder, Seller shall sell, assign, transfer,
convey and deliver to Buyer all of its right, title and interest in and to the
Loans, assets and documents as more fully enumerated and set forth in Article
IV(A)(i) through (vi) inclusive, which is incorporated herein by reference.
(C) Purchase Price. The Purchase Price for the Loans described on each
Purchase Schedule shall be an amount as deemed in Article II(K) above. The
Purchase Price shall be payable as set forth in Article IV(D) below.
(D) Payment of Purchase Price. On each Settlement Date, the Purchase
Price shall be paid as follows: The Buyer shall deposit funds by wire to the
Seller's bank as outlined on the Wire Transfer Authorization (Exhibit "F").
(E) Premium Rebate. In the event that a premium is paid by the Buyer to
the Seller on a Loan and such Loan is prepaid in full by the Borrower, other
than by a refinancing by the Buyer or any of its subsidiaries or affiliates,
within twelve (12) months of Settlement Date, the Seller shall, upon demand by
the Buyer, refund to the Buyer the premium paid by the Buyer to the Seller as
follows: if prepayment in full is within one (1) month of the Settlement Date,
12/12ths of the premium shall be refunded; if prepayment in full is within two
(2) months of the Settlement Date, 11/12ths of the premium shall be refunded; if
prepayment in full is within three (3) months of the Settlement Date, 10/12ths
of the premium shall be refunded; if prepayment in full is within four (4)
months of the Settlement Date, 9/12ths of the premium shall be refunded; if
prepayment in full is within five (5) months of the Settlement Date, 8/12ths of
the premium shall be refunded; if prepayment in full is within six (6) months of
the Settlement Date, 7/12ths of the premium shall be refunded; if prepayment in
full is within seven (7) months of the Settlement Date, 6/12ths of the premium
shall be refunded; if prepayment in full is within eight (8) months of the
Settlement Date, 5/12ths of the premium shall be refunded; if prepayment in full
is within nine (9) months of the Settlement Date, 4/12ths of the premium shall
be refunded; if prepayment in full is within ten (10) months of the Settlement
Date, 3/12ths of the premium shall be refunded; if prepayment in full is within
eleven (11) months of the Settlement Date, 2/12ths of the premium shall be
refunded; if prepayment in full is within twelve (12) months of the Settlement
Date, 1/12th of the premium shall be refunded. In the event any Loan is prepaid
in full later than twelve (12) months from the Settlement Date of such Loan, no
refund shall be due. In the event the Note carries a prepayment penalty, the
Buyer agrees first to recapture the premium rebate from the proceeds of the
prepayment penalty and then from the Seller, if there is any deficient balance
according to the refund calculation specified above.
V.REPRESENTATIONS AND WARRANTIES OF THE SELLER
(A) Representations and Warranties of the Seller - General. It is
understood and agreed by Seller and Buyer that as a material inducement to Buyer
to enter into this Agreement the Seller hereby represents and warrants to the
Buyer as follows:
1 1. The Seller is an organization as set forth in the
introductory paragraph of this Agreement and is duly organized, validly existing
and in good standing under the laws of the state of its incorporation, and is
duly qualified as a foreign corporation in all jurisdictions wherein the
character of the property owned or leased or the nature of the business
transacted by it makes qualification as a foreign corporation necessary.
2 2. The execution and delivery of the Agreement by the Seller
and the performance by the Seller of the obligations to be performed by it
hereunder have been duly authorized by all necessary corporate of other similar
action. Prior to the first Settlement Date, the Seller shall deliver to the
Buyer certified copies of relevant corporate or similar resolutions and a good
standing certificate for the state of its incorporation and, as requested by
Buyer, for each state in which Seller is registered to do business. It is within
Buyer's discretion to periodically request good standing certificates for all
states in which Seller is registered to do business.
3 3. The execution and delivery of this Agreement by the
Seller and the performance by the Seller of the obligations to be performed by
it hereunder do not, and will not, violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Seller or to the charter or
bylaws of the Seller. All parties which have had any interest in the Mortgages,
whether as mortgagee, assignee (other than Buyer or assignee of Buyer) or
pledgee are (or during the period in which they held and disposed of such
interest, were) in compliance with all applicable licensing requirements of the
federal, state, and local government wherein the Subject Property is located.
4. The execution and delivery of this Agreement by the Seller
and the performance by the Seller of the obligations to be performed by it
hereunder do not and will not result in a breach of or constitute a default
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under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Seller is a party or by which it or its properties may
be bound or affected.
5. This Agreement constitutes, when duly executed and
delivered by the Seller, a legal, valid and binding obligation of the Seller
enforceable against the Seller according to its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium, or similar law.
affecting creditors' rights in general, including equitable remedies.
6. There are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened against or affecting the Seller or the
properties of the Seller before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which, if determined adversely to the Seller, would have a material adverse
effect on the financial condition, properties or operation of the Seller. Any
consent by the Buyer to purchase Loans pursuant to this Agreement shall
automatically terminate if: (a) a decree or order of a court or agency
supervisory authority having jurisdiction for the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt, marshalling
of assets and liabilities, bankruptcy proceeding or any similar proceedings, or
for the winding up or liquidation of its affairs, shall have been entered
against the Seller or a Borrower and such decree or order shall have remained in
force undischarged or unstated for a period of 60 days; or (b) the Seller or a
Borrower shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities. bankruptcy or similar proceedings relating to the Seller or
relating to all or substantially all of its property; or (c) the Seller or
Borrower shall admit in writing its inability to pay its debts as they become
due, file a petition to take advantage of any applicable insolvency,
reorganization or bankruptcy statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations.
(B) Representations and Warranties of the Seller As to Each Loan.
It is understood and agreed by Seller and Buyer that as a material inducement to
Buyer to enter into this Agreement the Seller hereby represents and warrants to
the Buyer as of each Settlement Date with respect to each Loan purchased:
1. The Seller is a holder-in-due-course of each Note within
the meaning of the Uniform Commercial Code and is the sole owner of the Loan and
has the right to assign and transfer the Loan to the Buyer. The Seller has not
sold, assigned or otherwise transferred any right or interest in or to the Loan
and has not pledged the Loan as collateral for any loan or obligation of Seller
or other purpose. The assignment of the Loan by the Seller to Buyer validly
transfers such Loan to Buyer free and clear of any pledges, liens, claims,
encumbrances, Mortgages, charges. exceptions and/or security interests.
2. Except as expressly disclosed to and agreed to by the Buyer
in writing, each Loan conforms to: (a) Underwriting Guidelines of Buyer, and (b)
the conditions of the Approval Advice (if applicable).
3. All information set forth in any Purchase Schedule is true
and correct in all respects, ant all other information furnished to Buyer by
Seller with respect to the Loan(s) purchased is true and correct as of the
Settlement Date.
4. Each Note and Mortgage and the Related Assets are in every
respect genuine, are the valid instrument they purport on their face to be, are
the legal, valid, binding and enforceable obligation of the Borrower thereunder
and not subject to any discount, allowance, setoff, counterclaim, presently
pending bankruptcy or other defenses; none of the Notes, Mortgages, or Related
Assets are forged or have affixed thereto any unauthorized signature or have
been entered into by any persons without the required legal capacity; and no
foreclosure (including any nonjudicial foreclosure) or any other legal action
has been brought by the Seller or any senior lienholder in connection therewith.
5. No instruments other than those delivered herewith are
required under applicable law to evidence the indebtedness represented by the
Loan(s) or to perfect the lien of the Mortgage(s).
6. Except as has been disclosed to and agreed to by the Buyer
in writing, there is no agreement with the Borrower regarding any variation of
the interest rate and schedules of payment (except as described in the Note and
Mortgage) or other terms and conditions of the Loan, no Borrower has been
released from liability on the Note, and no property has been released from the
Mortgage. If the Loan is a variable rate loan, the Seller represents and
warrants as of each Settlement Date that all applicable notices required by law
or regulation have been provided to the Borrower and that the right to future
changes in the interest rate and payment schedules has not been waived by the
Seller or any previous holder of the Loan.
7. The Loan is secured by a valid Mortgage, of the agreed-upon
priority, on real property, and such Mortgage has been properly received by the
appropriate public recording official to be filed, recorded on otherwise
perfected in due course in accordance with applicable law in the appropriate
jurisdiction.
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8. There are no violations of any applicable federal or state
law or regulation, including, without limitation, Fair Credit Reporting Act and
Regulations, the Federal Truth-in-Lending Act and Regulation Z (including but
not limited to Section 32), the Federal Equal Credit Opportunity Act and
Regulation B, the Federal Real Estate Settlement Procedures Act and Regulations,
the Federal Debt Collection Practices Act, the Home Mortgage Disclosure Act, and
any federal or state usury laws and regulations. All disclosures required by
law, federal, state or local, were properly made by the Seller prior to the
closing of the Loan.
9. The Seller holds a marked-up title policy or a title
insurance binder or title certificate which is in full force and effect; which
has an insurance limit at least as great as the outstanding principal balance of
the Loan; which names the Seller, its successors and assigns as the insured
party; and which is issued by a till, insurer which has been approved by the
Buyer in writing and is qualified to do business in the jurisdiction where the
Subject Property is located. Said policy shall:
(i) insure the absence of any lien of taxes and other
assessments;
(ii) disclose whether all taxes and other assessments
due as of the date of the policy have been paid in full; and
(iii) disclose all other matters to which like
properties are commonly subject.
If the Buyer purchases a Loan having relied on a
marked-up title insurance binder or title certificate rather than a title
insurance policy, the Seller shall have thirty (30) days to deliver to the Buyer
the title insurance policy.
10. As of the Settlement Date the Seller has transferred to
Buyer all of its right, title and interest in the Note(s), Mortgage(s) and
Related Assets for each Loan purchased free and clear of any pledge, liens,
claims, encumbrances, Mortgages, charges, exceptions or security interests other
than as is disclosed in the title insurance policy to each Loan, together with
an individual flood insurance policy (to the extent required by the Flood
Disaster Protection Act) and an individual current hazard insurance policy
(including fire and extended coverage and other matters as are customary in the
area of the Subject Property), or a blanket policy in lieu thereof, or a
certificate if the Buyer agrees in writing to accept a certificate, insuring the
Subject Property, with a loss payable clause in favor of the Seller, its
successors and assigns in an amount equal to the lower of: (a) the replacement
value of the Subject Property, or (b) the unpaid principal balance of the Loan
and the senior mortgage deed(s) of trust loan.
11. The Note and Mortgage contain customary, valid, legal and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Subject Property of the
benefits of the security created thereby.
12. The proceeds of the Loan have been fully disbursed and any
and all requirements as to completion of on-site and off-site improvements and
disbursement of any escrow funds therefore have been complied with.
13. There are no mechanic's liens or similar liens or claims
which have been filed for work labor or material affecting the Subject Property
which are or may be liens prior to or equal with the lien of the Mortgage and
senior Mortgage(s).
14. The Subject Property is free of material damage and waste
and is in good repair and there is no proceeding pending or threatened for the
total or partial condemnation of the Subject Property, and the Subject Property
is free and clear of all hazardous material.
15. All matured obligations pursuant to the Note and Mortgage
have been paid or performer and the Seller has not waived any defaults, breach,
violation or event of acceleration.
16. The Seller has no knowledge of any fact as to such Loan
which it has failed to disclose which would materially and adversely affect the
value or marketability of such Loans.
17. The Seller has no knowledge of any impediments to title
that adversely affect the value, enjoyment or marketability of the Subject
Property.
18. Where required by state law, the Seller has filed for
record a request for notice of any action by a senior lienholder under a senior
lien, and the Seller has notified any superior lienholder in writing of the
existence of the Loan and requested notification of any action to be taken
against the Borrower by the superior lienholder. The Seller shall, upon request
of the Buyer, cooperate in recording a new request for action in favor of the
Buyer and in providing superior lienholders with written requests for
notification to the Buyer of action against the Borrower.
19. There is no default, breach, violation or event of
acceleration existing under any senior Mortgage which, with notice, and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration.
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20. Each Note and Mortgage contains a 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.
21. All real estate appraisals made in connection with each
Loan shall have been performer in accordance with industry standards in the
appraising industry in the area where the appraised property is located. Any
variances ascertained pursuant to Article VI(G) of this Agreement greater than
ten (10%) percent shall constitute conclusive evidence of a breach of this
warranty.
22. To the best of Seller's knowledge no hazardous or toxic
materials or wastes or product regulated by any law or ordinance or asbestos or
asbestos products or materials or polychlorinated biphenyls or urea formaldehyde
insulation have been used or employed in the construction, use or maintenance of
the Subject Property or have ever been stored, treated at or disposed of on the
Subject Property.
23. To the best of Seller's knowledge there has not occurred
nor has any person or entity alleged that there has occurred, upon the Subject
Property any spillage, leakage, discharge or release into the air soil or
groundwater of any hazardous material or regulated wastes.
24. The Seller has not, in connection with each Loan purchased
by Buyer, taken any action which might result in a claim against the Buyer or an
obligation by the Buyer to refund unearned finance charges, credit life
insurance premiums or any other fees in respect to the transactions between
Buyer and Seller as described in this Agreement. The Seller agrees to indemnify
and hold the Buyer harmless from and against any claims, liabilities, damages or
costs (including reasonable attorney fees) relating to any Borrower, insurer or
other party who claims to be due a refund of finance charges or insurance
premiums or any other fees in connection with transactions contemplated by this
Agreement.
25. The Seller has not, in connection with each Loan purchased
by Buyer, incurred any obligation, made any commitment or taken any action which
might result in a claim against the Buyer or an obligation by the Buyer to pay a
sales brokerage commission, finder's fee or similar fee in respect to the
transactions between Buyer and Seller as described in this Agreement. The Seller
agrees to indemnify and hold the Buyer harmless from and against any claims,
liabilities, damages or costs (including reasonable attorney fees relating to
any broker, agent or finder or other person, who shall claim to have dealt on
behalf of the Seller in Connection with the transactions contemplated by this
Agreement.
26. Seller agrees that for the time period of 36 months
beginning from the applicable settlement date, not to take any action to solicit
Borrowers individually in order to effect the refinancing of any Loans
previously purchased by Buyer from Seller. In the event a Borrower elects to
refinance with Seller a Loan purchased by Buyer from Seller, and such Loan is
currently owned or serviced by Buyer or Buyer otherwise retains a financial
interest in the Loan, Buyer will have the right of first refusal on the purchase
of the refinancing.
VI. BREACH OF REPRESENTATION AND WARRANTIES
(A) Remedy For Breach. In addition to any rights or remedies
the Buyer has at law or in equity, if at any time there is a breach of any
representation or warranty set forth herein by Seller, the Seller shall upon
demand of the Buyer and at the sole option and absolute discretion of Buyer: (1)
repurchase the Loan affected for the Buy-Back Price within ten (10) days of
notification; or (2) if the Loan(s) has been sold by Buyer or the Subject
Property has been liquidated or sold by Buyer, the Seller shall, within ten (10)
days of notification, pay the Buyer the amount of loss, (as defined in Article
VI(D) below).
(B) Reassignment. Upon receipt of the Buy-Back Price, in full,
in immediately available funds, the Buyer shall reassign the Loan affected and
any right it may have in the relevant Subject Property to the Seller free and
clear of all liens, encumbrances, claims, or interest of any person or entity
claiming by, through, or under the Buyer without recourse and shall execute and
deliver to the Seller in recordable form an assignment of the Buyer's beneficial
interest in the affected Mortgage, as well as other documents necessary to
reflect the reassignment of any title protection and insurance policies.
(C) "Buy-Back Price". The term "Buy-Back Price" shall mean the
sum total of: (1) the outstanding principal balance of the Loan, with accrued
interest thereon through the date the Loan is repurchased by Seller; (2) all
advances made by Buyer and all charges due from the Borrower; (3) the total
amount, including accrued interest and other expenses paid by the Buyer to any
senior lienholders, if any, to secure a priority lien position; (4) all
reasonable and necessary expenses, losses and damages paid or incurred by the
Buyer in connection with the Loan or an investigation of said Loan and/or the
related collateral, including, but not limited to, property taxes, maintenance
costs, interest expense, insurance, appraisals, advertising, sales commissions,
reasonable attorney fees, expenses and costs, fines and penalties; and (5)
rebate of premium due Buyer, if applicable.
(D) Definition of "Loss": The term "Loss" shall mean the
negative result, if any, of the following calculations: (a) the sum total of:
(i) the outstanding principal balance of the Loan, with accrued interest thereon
through the date the Loan is sold or date the collateral is liquidated; (ii) all
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advances by Buyer and all charges due from the Borrower; (iii) the total amount
paid by the Buyer to any senior lienholders, if any, to secure a first lien
position; (iv) accrued interest on all Mortgage Loans purchased from senior
lienholders from the date such Mortgage Loans were purchased through the date
the Loan is sold or the date the collateral is liquidated; and (v) all other
reasonable and necessary expenses, losses and damages incurred by and/or paid by
the Buyer in connection with the Loan or an investigation of said Loan or the
sale or liquidation of the Loan and/or the related collateral, including, but
not limited to, reasonable attorney fees, expenses and costs, property taxes,
maintenance costs, insurance, appraisals, advertising, sales commissions, fines
and penalties; less the (b) net proceeds from the sale of the Loan or the sale
or liquidation of the Subject Property or the collateral.
(E) Remedy For Non-Delivery of Documents. However, anything to
the contrary notwithstanding, in the event that the Seller is required to
deliver to the Buyer any documents related to a purchased Loan and the Seller
fails to deliver such document in the proper form on the date or within the time
period specified by the controlling section of this Agreement, Buyer shall
notify the Seller of the breach, and the Seller shall have thirty (30) days from
the date of notice to cure the breach. If the Seller has not cured the breach
within the thirty (30) day cure period, the Seller shall immediately repurchase
the Loan upon Buyer's demand. The Buy-Back Price shall be determined in
accordance with Article VI(C). Any Loan returned by the Buyer pursuant to this
paragraph shall be without recourse, representation or warranty.
(F) Remedy For First Payment Default. However, anything to the
contrary notwithstanding, in the event the Borrower fails to make the first
payment due to the Buyer within thirty (30) days of the payment due date, the
Buyer will notify the Seller and the Seller will assist Buyer in the Collection
of the first payment. In the event that the first payment is not received within
ninety (90) days of the payment due date, then the Seller will refund the
premium to the Buyer.
In the event the failure to make the first payment is due to
misrepresentation of the Borrower and/or Seller of circumstances with regard to
the particular Loan, the Buyer, at its sole and absolute discretion, shall have
the right to have Seller repurchase said Loan at the Buy-Back-Price.
(G) Remedy to Insure Accuracy of Real Estate Appraisals.
Buyer may, at its own expense, in order to verify the accuracy
of real property appraisals prepared for Seller, order a reappraisal of the
property secured by a Mortgage. If the reappraisal obtained by Buyer indicates a
fair market value which is more than ten (10%) percent less than the original
appraisal value, then upon receipt by Seller from Buyer of a signed copy of She
reappraisal, Seller shall repurchase the Loan at the Buy-Back Price (as defined
in Article VI(C), above) and reimburse Buyer for the cost of the appraisal
subject to the following: If Seller disputes the validity of the reappraisal
prepared by Buyer's appraiser, Seller may, at its own expense, request Buyer to
obtain a third appraisal, and only if such third appraisal is also more than ten
(10%) percent less than the original appraisal value shall the Seller be
required to repurchase the Loan at the Buy-Back Price. Buyer shall choose the
appraiser for the third appraisal with Seller's approval, which shall not be
unreasonably withheld, but such appraiser must possess the minimum
qualifications specified in Buyer's Underwriting Guidelines. The appraisal must
be performed in accordance with industry standards for the appraising industry
in the area in which the property is located, and the appraiser must be
independent with respect to both parties unless otherwise agreed to by the
parties. In determining the appropriate appraisal value, the review appraiser
must determine the appraised value as of the original appraisal date using
comparable sales that were available as of the date of the original appraisal.
However, anything to the contrary notwithstanding, the Buyer
reserves the sole right not to request the Seller to repurchase the Loan should
the reappraisal cause the combined loan-to-value not to exceed the maximum
allowable combined loan-to-value of the loan class under which the loan was
purchased.
VII. REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Seller as
follows:
(A) The Buyer is an organization as set forth in the
introductory paragraphs and is duly organized validly existing and in good
standing under laws applicable to its organization's existence.
(B) The execution and delivery of this Agreement by the Buyer
and the performance by the Buyer of the obligations by it to be performed
hereunder have been duly authorized by all necessary corporate resolutions.
(C) The execution and delivery of this Agreement by the Buyer
and the performance by the Buyer of the obligations by it to be performed
hereunder do not, and will not, violate any provision of any law, rule,
regulations, order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Buyer or to the charter or
bylaws of the Buyer.
(D) The execution and delivery of this Agreement by the Buyer
and the performance by the Buyer of the obligations by it to be performed
hereunder do not and will not result in a breach of or constitute a default
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under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Buyer is a party or by which it or its properties may be
bound or affected.
(E) This Agreement constitutes, when duly executed and
delivered by the Buyer, a legal, valid ant binding obligation of the Buyer
enforceable against the Buyer according to its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or similar laws affecting creditors' rights in general, including
equitable remedies.
(F) There are no actions, suits or proceedings pending or, to
the knowledge of the Buyer, threatened against or affecting the Buyer or the
properties of the Buyer before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, which if
determined adversely to the Buyer, would have a material adverse effect on the
financial condition, properties or operation of the Buyer.
(G) Buyer has the authority and legal right to make, deliver
and perform this Agreement and all transactions contemplated hereunder. No
consent of any other party and no consent, license, approval or authorization
of, or registration, or declaration with, any governmental authority, bureau or
agency is required in connection with the execution, delivery, validity or
enforceability of this Agreement or purchase of any Loan, which consent,
license, approval, authorization, registration or declaration has not been
obtained. Buyer shall make available to Seller copies of any required license
upon Seller's request.
VIII. INDEMNIFICATION
(A) Seller agrees to protect, indemnify, and hold Buyer and
its employees, officers, and directors, harmless against, and in respect of, any
and all losses, liabilities, costs and expenses (including reasonable attorney's
fees), judgments, damages, claims, counterclaims, demands, actions or
proceedings, by whomsoever asserted, including but not limited to, the
Borrowers, against any person or persons who prosecute or defend any actions or
proceedings as representatives of or on behalf of a class or interested group,
or any governmental instrumentality, body, agency, department or commission, or
any administrative body or agency having jurisdiction pursuant to any applicable
statute, rule, regulation, order or decree, or the settlement or compromise of
any of the foregoing, providing, however, any of the foregoing arises out of, is
connected with or results from any breach of representations, covenants or
warranties made by Seller in relation to the Loans sold to Buyer hereunder.
(B) The waiver of any breach, term, provision or condition of
this Agreement shall not be construed to be a waiver of any other or subsequent
breach, terror provision or condition. All remedies afforded by this Agreement
for a breach hereof shall be cumulative; that is, in addition to all other
remedies provided for herein or at law or in equity.
(C) Provided further, in the event of any legal action,
including counterclaims, wherein the claim is based upon alleged facts that
would constitute a breach of any one or more of the warranties, covenants, and
representations made or assumed by Seller under the terms hereof, Seller shall
thereupon, at Buyer's option, repurchase without recourse such Loan at the
Buy-Back Price.
(D) The indemnification contained in (A) and (B) above is
applicable to any servicing of the Loan purchased hereunder which is performed
by the Seller.
IX. RELATIONSHIP OF THE PARTIES
It is agreed that the Seller and the Buyer are not partners or
joint venturers and that the Seller is no to act as an agent for the Buyer in
originating, administering or collecting any Loan, but shall have the status of
and shall act in all matters hereunder as an independent contractor.
X. OPINION OF COUNSEL
The Seller shall deliver to the Buyer in form and substance
satisfactory to the Buyer and its counsel on or before the first Settlement Date
hereunder, an opinion of the Seller's independent outside counsel pursuant to
Exhibit "G" attached hereto and made a part hereof, opining on the provisions of
Articles V(A)1 through V(A)6, inclusive and the opinion of Counsel will cover
all Loans purchased by Buyer under this Agreement unless the opinion is
rescinded or revoked by the Law Firm rendering the Opinion.
XI. CLOSING DOCUMENTS
The Seller shall have delivered to Buyer an officer's
certificate, attested to by the Secretary of the Seller, stating the names and
showing the facsimile signatures of the officers of Seller authorized to execute
ant deliver this Agreement; endorse Note(s), Mortgage(s), and Assignment(s); and
authorize the bank accounts for Buyer to utilize for funding Loans (Exhibit
"H"). Seller shall deliver to Buyer a good standing certificate for its State of
Incorporation. It is within Buyer's discretion to periodically request good
standing certificates for all states in which Seller is registered to do
business. In addition, Seller shall provide Buyer copies of all applicable
lending licenses.
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XII. MISCELLANEOUS
(A) Additional Covenants.
1. Each party shall, from time to time, execute and deliver or
cause to be executed and delivered, such additional instruments, assignments,
endorsements, papers and documents as the other party may at any time reasonably
request for the purpose of carrying out of this Agreement and the transfers
provided for herein.
2. The Seller shall, upon request of the Buyer, sign a letter,
in form to be approved by the Buyer and in conformity with the terms and
conditions hereof, addressed to all the Borrowers on the Loans, announcing the
sale evidenced hereby and instructing such Borrowers to recognize the Buyer as
the Seller's successor in interest to such Loans.
3. After any Settlement Date hereunder, the Seller will hold
in trust for the Buyer all sums received by the Seller from Borrower(s) on any
Loan purchased pursuant to this Agreement and pay them to the Buyer within three
(3) business days of the receipt of those sums.
4. Any and all decisions made by Buyer in good faith to take
action or to not take action relative to a Loan, including, but not limited to,
the sale or liquidation of a Loan, Subject Property or collateral shall be final
and conclusively binding upon Seller in the event Seller does not repurchase a
Loan within ten (10) days of notification by Buyer pursuant to Section VI of
this Agreement.
5. In order to enforce Buyer's rights under this Agreement,
Seller shall, upon the request on Buyer or its assigns, do and perform or cause
to be done and performed, every reasonable act and thing necessary or advisable
to put Buyer or its assigns in position to enforce the payment of the Loans and
to carry out the intent of this Agreement, including the execution of and, if
necessary, the recordation of additional documents including separate
endorsements and assignments upon request of Buyer. In addition, Seller hereby
irrevocably appoints any officer or employee of Buyer or its assigns its true
and lawful attorney to do and perform every act necessary, requisite, proper, or
advisable to be done to put Buyer or its assigns in position to enforce the
payment of the Loans. (Said Power of Attorney is set forth as Exhibit "I.")
(B) Survival or Covenants , Agreements, Representations and
Warranties; Successors and Assigns. All warranties, representations and
covenants made by either party in this Agreement or in any other instrument
delivered by either party to the other, including those made by third parties
for the benefit of either party, shall be considered to have been relied upon by
the other party (unless otherwise agreed in writing by the panties) and shall
survive the termination of this Agreement. The Buyer reserves the right to
proceed against third parties to enforce any representations, warranties and
covenants made by them for the benefit of the Seller.
(C) Severability. If any provision, or part thereof, of this
Agreement is invalid or unenforceable under any law, such provision, or part
thereof, is and will be totally ineffective to that extent, but the remaining
provisions, or part thereof, will be unaffected.
(D) Attorneys' Fees. However, anything to the contrary
notwithstanding, in the event of any action at law, in equity, arbitration or
otherwise between the parties in relation to this Agreement or any Loan of other
instrument or agreement required or purchased or sold hereunder, the
non-prevailing party, in addition to any other sums which such party shall be
required to pay pursuant to the terms and conditions of this Agreement at law,
in equity, arbitration or otherwise shall also be required to pay to the
prevailing party all costs and expenses of such litigation, including reasonable
attorney fees.
(E) Waivers. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as a further or continuing waiver of any such
term, provision or condition, or of any other term, provision or condition of
this Agreement.
(F) Notice. Any notice or other communication in this Agreement
provided or permitted to be given by one party to the other must be in writing
and given by personal delivery or by depositing the same in the United States
mail (certified mail, return receipt requested), addressed to the other party to
be notified, postage prepaid. For purposes of notice, the addresses of the
parties shall be as follows:
BUYER: CONTIMORTGAGE CORPORATION
000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
ATTENTION: Xxxxxx X. Major, President & Chief Executive Officer
SELLER: WESTMARK MORTGAGE CORPORATION
000 X.X. Xxxxx Xxxxxx, Xxxxx 0
Xxxxxx Xxxxx, XX 00000
ATTENTION: Xx. Xxxx Xxxxxxxxxx, President
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The above address may be changed from time to time by written notice
from one party to the other
(G) Insurance Prepayment. Insurance refund or credits of any kind
whatsoever shall be the sole responsibility of the Seller in the event of
prepayment of any Loan, cancellation of insurance or any other event requiring
refunding or crediting of unearned insurance premiums. Upon the Buyer's demand,
Seller shall pay to the Buyer, from the Seller's own funds, any required
insurance premium rebate resulting from the prepayment, cancellation,
refinancing or other termination of any Mortgage Loan. Upon such payment, Buyer
shall assign in writing any rights it had to require that the insurer reimburse
Buyer for any rebate made to Borrower.
(H) Assignment. The Seller shall not, without the prior written
consent of the Buyer, assign any of its rights or obligations hereunder.
(I) Captions. Paragraph or other headings contained in this
Agreement are for reference purpose only and shall not affect in any way the
meaning or interpretation of this Agreement.
(J) Entire Agreement. This Agreement and the Exhibits attached
hereto, and the documents referred to herein or executed concurrently herewith
constitute the entire agreement between the parties hereto with regard to the
subject matter hereof, and there are no prior agreements, understandings,
restrictions, warranties or representations between the parties with respect
thereto.
(K) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania. The
provisions of this paragraph shall not affect the provisions of any Note,
Mortgage or Related Assets which cause the laws of the United States or any
other state to be applicable. This Agreement shall be interpreted fairly in
accordance with its provisions and without regard to which party drafted it.
(L) Termination. This Agreement is terminable by either the Buyer
or Seller upon ninety (90) days' written notice of termination to the
non-terminating party. Upon such termination, Buyer must honor any outstanding
commitments or Approval Advices issued to Seller and purchase all Loans subject
to such commitment or Approval Advice in accordance with the terms of this
Agreement and the terms of the commitment or Approval Advice. Notwithstanding
the foregoing, Buyer has the option of terminating this Agreement immediately
upon notice to the Seller upon the Seller's breach of any of the Representations
and Warranties contained in Article V of this Agreement, and Buyer shall have no
obligation to honor any commitment or Approval Advice after such termination.
Seller may terminate this Agreement immediately upon written notice to the Buyer
upon the breach of any of Buyer's representations and warranties contained in
Article VII of this Agreement.
(M) Arbitration, Jurisdiction and Venue.
With respect to any controversy, argument or claim arising out of
or relating to this Agreement, or any breach thereof (including, but not limited
to, a request for emergency relief), the parties hereby consent to the exclusive
jurisdiction of the Court of Common Pleas of Xxxxxxxxxx County, Pennsylvania or
the Federal District Court for the Eastern District of Pennsylvania and waive
personal service of any and all process upon them and consent that all such
service of process made by registered or certified mail directed to them at the
address stated herein and service so made shall be deemed to be completed five
(5) days after mailing. The parties waive trial by jury and waive any objection
to jurisdiction and venue of any action instituted hereunder, agree not to
assert any defense based on lack of jurisdiction or venue and consent to the
granting of such legal or equitable relief as is deemed appropriate by the
court, including, but not limited to, any emergency relief, injunctive or
otherwise.
However, anything to the contrary notwithstanding, except with
respect to emergency relief, Buyer shall have the sole and exclusive option and
discretion to have any controversy, argument or claim arising out of or relating
to this Agreement, or any breach thereof, settled in Philadelphia, Pennsylvania
in accordance with the Rules of the American Arbitration Association (as
modified below), and judgment upon the award may be entered in any Court having
jurisdiction thereof.
The arbitration panel shall be made up of three members which
shall be appointed: one by Buyer, one by Seller and the third by the first two
arbitrators. Each arbitrator shall be a lawyer experienced in matters relating
to real estate and mortgage banking. Discovery shall be permitted in connection
with the arbitration proceeding within the reasonable discretion of the
arbitration panel. The decision (award) shall be in writing and shall set forth
the rationale and legal basis therefor, and such decision may be appealed by
either party if the part believes that the written decision (award) is based
upon an error of law. The facts determined by the original panel will be final
and no appeal of such findings may be made. Such appeal shall be taken to a
three-member arbitration panel, the members of which shall be selected in
accordance with the above-described procedures, and the panel's review shall be
limited to the application of the statutory and decisional law of the
Commonwealth of Pennsylvania (as modified by Paragraph XII(K) above) to the
facts of the dispute as determined in writing by the original arbitration panel.
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(N) Endorsements.
In the event that the remedies or other terms outlined in this
Agreement conflict with the terms of any endorsement by the Seller of any Note
evidencing a Loan purchased by the Buyer from the Seller, including but not
limited to, an endorsement stating that the assignment of the Note is without
recourse, the remedies and terms of this Agreement shall govern and control.
IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first above written:
BUYER: CONTIMORTGAGE CORPORATION
BY:________________________________________
XXXXXX X. MAJOR
TITLE: President & Chief Executive Officer
SELLER:
BY: /s/ Xxxxxx Story III
---------------------------------------
Xxxxxx Story III
TITLE: President
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