MASTER AGREEMENT
FOR
SALE AND PURCHASE OF MORTGAGES
This Master Agreement for Sale and Purchase of Mortgages is made this
29th day of February 1996, by and between Industry Mortgage Company, L.P.
located at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxx. 000, Xxxxx, XX 00000 a limited
partnership organized and existing under the laws of the State of Delaware
("Buyer") and Westmark Mortgage Corp., located at 000 XX 0xx Xxx., Xxxxx 0,
Xxxxxx Xxxxx, XX 00000, a corporation organized and existing under the laws of
the state of California (a "Seller").
I. RECITALS
WHEREAS, the Seller desires from time to time to offer for sale to the
Buyer and the Buyer desires 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
N4ortgaaed 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.
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(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 Note and Mortgage, or in the event the original Mortgage is out for
recordation, a certified true copy thereof, 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 Schedule of Loans
delivered 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 Schedule of Loans delivered 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) (prorated on a 365-day year); and (3) any premiums due Seller, if
applicable, in accordance with the Approval Advice or Schedule of Loans
delivered; (4) less any discount due Buyer, if applicable, in accordance with
the Approval Advice or Schedule of Loans delivered.
(L) Related Assets: the documents as further defined in Article
IV(A)(iv) of this Agreement.
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(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 Buyer located at 0000 Xxxxxxxxx Xxxx
Xxxxx, Xxx 000, Xxxxx, XX 00000.
(N) Underwriting Guidelines/Purchasing Guidelines: Exhibit "B"
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 Schedule of Loans delivered 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 provide a blank
assignment of Mortgages in recordable form signed by Seller, 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 "C," 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 Schedule of Loans
delivered which are purchased by Buyer pursuant to this Agreement.
(ii) The agreed-upon priority liens and/or Mortgages, or a true
certified copy thereof, on Subject Property.
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(iii) The original Note(s) and the Mortgage(s), or a true certified
copy thereof, endorsed by an authorized Officer of Seller to the Buyer pursuant
to the language set forth on Exhibit "D" attached hereto and made a part hereof
together with an individual assignment to the Buyer (certified copy of the
recorded assignment) 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 and a release of any intervening assignee's
interest, if any, in the event that such assignment was not recorded.
(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 certifying each to
be a true and correct copy of documents(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 15 days
after Seller receives such document, but in any event, no later than 120 days
from the Settlement Date. In the event that missing documents are not received
by the Buyer within the above-stated time frame, strictly as a result of a
delay caused by the public recording office(s), Buyer may extend this period of
document delivery time by written consent if in Buyer's sole opinion the Seller
is using prudent and diligent follow-up.
(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
Schedule of Loans delivered shall be an amount as defined in Article II(K)
above. The Purchase Price shall be payable as set forth in Article IV(D) below.
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(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, at: CHEMICAL BANK, NEW YORK, NEW YORK-ABA #000-000-000 - Westmark
Mortgage Corp.-Acct.#3233-09348.
(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 by the Borrower, other than by a
refinancing by the Buyer or any of its subsidiaries or affiliates or a
refinancing by the Seller which is purchased by the Buyer, (Seller agrees to
give Buyer a right of first refusal to repurchase the aforementioned refinance,
and in the event Buyer repurchases said refinance, Buyer agrees to pay Seller a
premium, if any on the new advance over and above the refinanced amount
only. In the event Buyer elects not to purchase said refinance, then Seller
shall pay to Buyer the premium rebate as set forth below), within twenty-four
(24) months of Settlement Date, the Seller shall, upon demand by the Buyer,
refund to the Buyer, in the appropriate percentage specified below, the premium
paid by the Buyer to the Seller. In the event such Loan is prepaid within one
hundred eighty (180) days of the Settlement date of such Loan, the refund due
Buyer from Seller will equal one hundred (100%) percent of the premium paid to
Seller by Buyer for such Loan. In the event such Loan is prepaid during the
period of one hundred eighty-one (181) days to three hundred and sixty (360)
days of the Settlement Date of such Loan, the refund due Buyer from Seller will
equal seventy-five (75%) percent of the premium paid to Seller by Buyer. In the
event such Loan is prepaid during the period of three hundred and sixty-one
(361) days to five-hundred and forty (540) days of the Settlement Date of such
loan, the refund due Buyer from Seller will equal fifty (50%) percent of the
premium paid to Seller by Buyer. In the event such loan is prepaid during the
period of five hundred and forty-one (541) days to seven hundred and thirty
(730) days of the Settlement Date of such loan, the refund due Buyer from
Seller will equal twenty-five (25%) percent of the premium paid by Buyer to
Seller. In the event such Loan is prepaid later than twenty-four (24) months of
the Settlement Date of such Loan, no refund shall be due; however, in the event
any Loan contract provides for a prepayment penalty, and said prepayment penalty
is collected by Buyer (Buyer agrees to use its best efforts to collect said
prepayment penalty), then Buyer agrees to offset the amount of any prepayment
penalty against any Premium Rebate due Buyer from Seller.
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. 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 organization and existence, and is
duly qualified as a **CORPORATION** in all jurisdictions wherein the character
of the property owned or ]eased or the nature of the business transacted by it
makes qualification as a foreign organization necessary.
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
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authorized by all necessary corporate or 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 organization 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. 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 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 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 be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium, or similar
laws 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 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 or 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 are 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.
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(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 the Payee and Holder 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 Schedule of Loans delivered is true
and correct in all respects, and 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 non-judicial 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
chances 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/Deed of Trust, 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 or
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, the Federal
Equal Credit Opportunity Act and Regulation B, the Federal Real Estate
Settlement Procedures Act and Regulations, the Federal Debt Collection Practices
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 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 title 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 which are due and payable;
(ii) disclose whether all taxes and other assessments due as
of the date of the policy have been paid in fall; 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 sixty (60) days to deliver to the Buyer the title
insurance policy. In the event that missing documents are not received by the
Buyer within the above-stated time frame, strictly as a result of a delay caused
by the public recording office(s), Buyer may extend this period of document
delivery time by written consent if in Buyer's sole opinion the Seller is using
prudent and diligent follow-up.
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, provided, however, that the amount is sufficient
to protect the insured and mortgage from co-insurers in the event of a partial
loss.
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.
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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. To the best of Seller's knowledge, 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. To the best of Seller's knowledge, the Subject Property is free of
material damage and waste and is in average 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 performed 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. When 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.
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
mortgage thereunder, or applicable by state law.
21. All real estate appraisals made in connection with each Loan shall
have been performed in accordance with industry standards in the appraising
industry in the area where the appraised property is located and have been
performed by an appraiser who satisfies the requirements of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989. Appraisers must be
state licensed and must be on IMC's approved appraiser list.
22. To the best of Seller's knowledge, no hazardous or toxic materials
or wastes or products regulated by any law or ordinance or asbestos or asbestos
products or materials or
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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. However,
in the event it has been determined that asbestos or asbestos products or
asbestos materials have been used or employed in construction, use, or
maintenance in Subject Property, a duly qualified appraiser or engineer must
state that the material is in good repair or removed.
23. To the best of Seller's knowledge, there has not 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, 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.
25. Seller agrees 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. Buyer will pay to Seller the normal premium percentage on the
refinanced Loan, but only on the amount that the refinanced Loan balance exceeds
the balance of the original Loan purchased by Buyer from Seller. General
advertising to the public shall not be deemed to violate this non-solicitation
provision.
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 Buyer shall give written notice to
Seller of the breach. If after thirty (30) days following Seller's receipt of
such notice the breach has not been cured by Seller, the Seller shall upon
demand of the Buyer and at the sole option and absolute discretion of Buyer,
immediately repurchase the loan affected for the Buy-Back Price (as defined in
VI(C) below). If the loan has been sold by Buyer or the subject property has
been liquidated or sold by Buyer, the Seller shall, within thirty (30) days of
the aforementioned notification, pay the Buyer the amount of loss (as defined in
VI(D) below).
B. Reassignments. 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, as well as other documents
necessary to reflect the reassignment of any title protection and insurance
policies.
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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 and not
paid through the date the Loan is sold or date the collateral is liquidated;
(ii) all 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) days 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; however, Buyer represents and
warrants to Seller, that Buyer, its affiliates, subsidiaries, servicers, or
employees have done nothing to cause the Loan to become uncollectible in whole
or in part.
F. 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 the
reappraisal, Seller shall repurchase the Loan by the Buy-Back Price (as defined
in Article VI(c)) 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
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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 fair market appraised value as of the original appraisal date
using comparable sales that were available as of the date of the original
appraisal. The original reappraisal must be ordered within four (4) years of the
Buyer's purchase of the Loan from the Seller. After four (4) years, the above
variance does not apply unless it can be proved that there was fraud.
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. RELATIONSHIP OF THE PARTIES
Solely by virtue of the parties' execution of this Agreement, it is
agreed that the Seller and the Buyer are not partners or joint venturers and
that the Seller is not to act as an agent of 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.
VIII. 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 "E." 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.
IX. DESIGNATION OF AUTHORIZED OFFICERS
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 and deliver
this Agreement; endorse Note(s), Mortgage(s), and Assignment(s); and authorize
the bank accounts for Buyer to utilize for funding Loans.
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X. 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 the terms 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 in a commercially reasonable manner, 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 of 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, its rights under this Agreement, and to carry out the
intent of this Agreement, including. but not limited to, the right to sign,
execute, endorse and/or assign. and deliver to Buyer or its assigns on behalf of
Seller any Mortgage Note, Mortgage, security interest, or any other Loan
document and also any other writing of any other kind or nature whatsoever which
may be used in connection therewith to evidence any obligation of Seller or any
Borrower to Buyer or its assigns, pursuant to this Agreement and to endorse any
check or other instrument for the payment thereof. Seller does hereby forever
renounce all rights to revoke this power of attorney or any of the above
conferred upon Buyer or its assigns hereby or to appoint any other person to
execute the said power.
B. Survival of 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 parties) and shall survive the
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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 or 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: Industry Mortgage Company, L.P.
0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
ATTENTION: Xxxxxx Xxxxxxxx
SELLER: Westmark Mortgage Corporation -
000 XX 0xx Xxx., Xxxxx 0
Xxxxxx Xxxxx, Xxxxxxx 00000
ATTENTION: Xxxx Xxxxxxxxxx
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, for insurance of any kind sold by Seller (or Seller's originating
source, whether a loan Broker or Correspondent) in conjunction with the Loan,
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
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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 user 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 purposes 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 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 State of Florida. 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 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. 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,
however, subject to the rights to cure as outlined in Article VI. Buyer shall
have no obligation to honor any commitment or Approval Advice after such
termination.
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 state and federal courts having jurisdiction over Buyer at
the time any such controversy, argument or claim arises, 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 the county and state of
Buyer's principal office, in accordance with the Rules of the American
15
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 party 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 state of
Florida (as modified by Paragraph XI(K) above) to the facts of the dispute as
determined in writing by the original arbitration panel.
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.
O. Indemnification (Holder in Due Course)
In the event Buyer purchases a Loan from Seller in which all or part of
the proceeds of such Loan were paid to a home improvement or building contractor
(including if proceed checks were made payable to the Borrower and the
contractor jointly) for the purpose of repairs or improvements to the subject
property, Seller agrees to indemnify Buyer against any loss, damages,
forfeitures, legal fees and other costs resulting from any demand, defense or
assertion based, grounded upon or arising from Borrower's rights, claimed or
granted, to withhold payment of the Loan due to the incompletion or
unsatisfactory completion of said repairs or improvements.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written:
BUYER: Industry Mortgage Company, L.P.
By: Industry Mortgage Corporation,
General Partner
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Executive Officer
SELLER: /s/ Xxxx Xxxxxxxxxx
-----------------------------------------
Xxxx Xxxxxxxxxx
By: Xxxx Xxxxxxxxxx
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