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EXHIBIT 10.1
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EXECUTION COPY
PURCHASE AGREEMENT
Between
ADVANTA NATIONAL BANK,
as Originator
and
ADVANTA MORTGAGE CONDUIT SERVICES, INC.,
as Purchaser
Dated as of June 1, 1998
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Table of Contents
Page
ARTICLE I Definitions....................................................................................1
ARTICLE II Procedures for Purchases of Mortgage Loans; Conditions Precedent; Settlements................6
Section 2.01. Purchase and Sale...............................................................6
Section 2.02. Delivery of Documents; Purchase of Initial Mortgage Loans.......................6
Section 2.03. Delivery of Documents; Purchases of Subsequent Mortgage Loans...................7
Section 2.04. Purchase Requests...............................................................7
Section 2.05. Survival of Representations.....................................................8
Section 2.06. Proceeds of Mortgage Loans......................................................8
Section 2.07. Defective Mortgage Loans........................................................8
ARTICLE III..............................................................................................8
Section 3.01. Intent of Parties; Security Interest............................................8
ARTICLE IV Representations and Warranties................................................................9
Section 4.01. Representations and Warranties of Originator....................................9
Section 4.02. Representations and Warranties Regarding Mortgage Loans........................10
Section 4.03. Representations and Warranties of Purchaser....................................16
Section 4.04. Remedies for Breach of Representations and Warranties; Repurchase
Obligation.....................................................................17
ARTICLE V Covenants and Warranties of the Originator....................................................18
Section 5.01. Affirmative Covenants..........................................................18
Section 5.02. Negative Covenants.............................................................18
ARTICLE VI Sale of Mortgage Loans from the Purchaser to the Trust.......................................19
Section 6.01. Sale and Servicing Agreement...................................................19
ARTICLE VII Termination; Additional Remedies...........................................................20
Section 7.01. Termination of Commitment to Purchase..........................................20
Section 7.02. Additional Remedies............................................................20
ARTICLE VIII Term.......................................................................................20
ARTICLE IX Exclusive Benefit of Parties; Assignment.....................................................20
ARTICLE X Amendment; Waivers............................................................................21
ARTICLE XI Execution in Counterparts....................................................................21
ARTICLE XII Effect of Invalidity of Provisions..........................................................21
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ARTICLE XIII Governing Law..............................................................................21
ARTICLE XIV Notices.....................................................................................22
ARTICLE XV Entire Agreement.............................................................................22
ARTICLE XVI Indemnities.................................................................................22
ARTICLE XVII RESPA Obligations..........................................................................23
ARTICLE XVIII Survival..................................................................................24
ARTICLE XIX Consent to Service..........................................................................24
ARTICLE XX Submission to Jurisdiction; Waiver of Trial by Jury..........................................24
ARTICLE XXI Construction................................................................................24
ARTICLE XXII Further Agreements.........................................................................25
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PURCHASE AGREEMENT ("Agreement") dated as of June 1, 1998
between Advanta National Bank, a national banking association ("Originator"),
and Advanta Mortgage Conduit Services, Inc.
("Purchaser").
WHEREAS, Originator desires to sell from time to time to
Purchaser the Initial Mortgage Loans and Subsequent Mortgage Loans (each as
hereinafter defined), and Purchaser desires to purchase such Initial Mortgage
Loans and Subsequent Mortgage Loans, each in accordance with the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, the parties, in consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
Capitalized terms not defined herein shall have the meanings
set forth in the Sale and Servicing Agreement. As used in this Agreement, the
following terms shall have the following meanings:
"Additional Balance": As to any Mortgage Loan and day, the
aggregate amount of all Draws conveyed to the Trust pursuant to Section 2.1 of
the Sale and Servicing Agreement.
"Assignment of Mortgage": With respect to each Mortgage Loan,
an assignment of the Mortgage, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the recordation of the pledge
of the Mortgage Loans to the Indenture Trustee for the benefit of the Class A
Noteholders.
"Business Day": Any day that is not a Saturday, Sunday or
other day on which commercial banking institutions in the State of New York or
in the city in which the principal corporate trust office of the Indenture
Trustee is located, are authorized or obligated by law or executive order to be
closed.
"Class A Note": Any note executed and authenticated by the
Indenture Trustee substantially in the form set forth in Exhibit A to the
Indenture.
"Class A Noteholder": The holder of a Class A Note.
"Closing Date": June 24, 1998.
"Collateral": As defined in Article III hereof.
"Credit Line Agreement": With respect to any Mortgage Loan,
the related home equity line of credit agreement, security instrument and
promissory note executed by the related Mortgagor and any amendment or
modification thereof.
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"Cut-Off Date": With respect to each Initial Mortgage Loan,
the Initial Cut-Off Date. With respect to any Subsequent Mortgage Loan, the
Subsequent Cut-Off Date related to such Subsequent Mortgage Loan. With respect
to each Qualified Replacement Mortgage, the Replacement Cut-off Date related to
such Qualified Replacement Mortgage.
"Cut-Off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the related Cut-Off Date.
"Draw": With respect to any Mortgage Loan, an additional
borrowing by the Mortgagor subsequent to the Cut-Off Date in accordance with the
related Credit Line Agreement.
"Event of Termination": As defined in Article IX hereof.
"FHLMC": The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created pursuant to the Emergency
Home Finance Act of 1970, as amended, or any successor thereof.
"FNMA": The Federal National Mortgage Association, a
federally-chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor thereof.
"Indenture": The Indenture dated as of June 1, 1998 between
the Trust and the Indenture Trustee.
"Indenture Trustee": Bankers Trust Company of California, N.A.
or any successor Indenture Trustee appointed in accordance with the Indenture
that has accepted such appointment in accordance with the Indenture.
"Initial Cut-Off Date": With respect to the Initial Mortgage
Loans, the close of business on June 5, 1998.
"Initial Mortgage Loans": Mortgage Loans transferred and
assigned to the Indenture Trustee on the Closing Date.
"Issuer": Advanta Home Equity Loan Trust 1998-A.
"Liquidated Mortgage Loan": As defined in Section 4.13(b) of
the Sale and Servicing Agreement. A Mortgage Loan which is purchased from the
Trust pursuant to Section 3.3, 3.4, 3.6(b) or 4.10 of the Sale and Servicing
Agreement is not a "Liquidated Mortgage Loan".
"Loan Rate": As defined in the Sale and Servicing Agreement.
"Losses": Any and all out-of-pocket losses, claims, damages,
liabilities or expenses (including reasonable attorneys' fees and disbursements)
directly incurred by any person specified in this Agreement, resulting from
transactions entered into under
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this Agreement (other than liability for taxes). Losses must be accounted for
and presented for reimbursement documented in reasonable detail and within a
reasonable time.
"Master Servicer": Advanta Mortgage Corp. USA, a Delaware
corporation, and its permitted successors and assigns.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or junior lien on an estate in fee simple interest in real
property securing a Credit Line Agreement.
"Mortgage Files": For each Mortgage Loan, the items listed on
Exhibit B of the Sale and Servicing Agreement.
"Mortgage Loan Schedule": A schedule of Mortgage Loans
transferred to the Trust, attached hereto as Schedule I, as it may be further
supplemented in connection with subsequent transfers of Subsequent Mortgage
Loans.
"Mortgage Loans": Such of the mortgage loans transferred and
assigned to the Trust pursuant to Section 2.1(a) of the Sale and Servicing
Agreement, together with any Qualified Replacement Mortgages substituted
therefor in accordance with this Agreement, as from time to time are held as a
part of the Trust Estate, the Mortgage Loans originally so held being identified
in the Schedule of Mortgage Loans. The term "Mortgage Loan" includes the terms
"First Mortgage Loan" and "Second Mortgage Loan". The term "Mortgage Loan"
includes any Mortgage Loan which is Delinquent, which relates to a foreclosure
or which relates to a Mortgaged Property which is REO Property prior to such
Mortgaged Property's disposition by the Trust. Any mortgage loan which, although
intended by the parties hereto to have been, and which purportedly was,
transferred and assigned to the Trust by the Sponsor, in fact was not
transferred and assigned to the Trust for any reason whatsoever shall
nevertheless be considered a "Mortgage Loan" for all purposes of this Agreement.
The term "Mortgage Loan" includes the terms "Initial Mortgage Loan," and
"Subsequent Mortgage Loan".
"Mortgaged Property": The underlying property securing a
Mortgage Loan.
"Mortgagor": The obligor on a Credit Line Agreement.
"Note Account": The note account established in accordance
with Section 8.3 of the Indenture and maintained by the Indenture Trustee.
"Officer's Certificate": A certificate signed by any
Authorized Officer of any Person delivering such certificate and delivered to
the Indenture Trustee.
"Payment Date": Any date on which the Indenture Trustee is
required to make distributions to the Class A Noteholders, which shall be the
25th day of each month, commencing in the month following the Closing Day or, if
such day is not a Business Day, then on the succeeding Business Day.
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"Policy": The financial guaranty insurance policy, dated as of
the Closing Date, issued by Ambac Assurance Corporation to the Indenture Trustee
for the benefit of the Class A Noteholders.
"Principal Balance": As to any Mortgage Loan, other than a
Liquidated Mortgage Loan, and as of any date, the related Cut-Off Date Principal
Balance, plus (i) any Additional Balance in respect of such Mortgage Loan, minus
(ii) all collections credited as principal against the Principal Balance of any
such Mortgage Loan in accordance with the related Credit Line Agreement prior to
such day. For purposes of this definition, a Liquidated Mortgage Loan shall be
deemed to have a Principal Balance of zero as of the first day of the Remittance
Period following the Remittance Period in which such Mortgage Loan becomes a
Liquidated Mortgage Loan and at all times thereafter.
"Purchase": Any purchase of Subsequent Mortgage Loans by
Purchaser from Originator pursuant to the terms hereof and of the applicable
Purchase Request.
"Purchase Date": With respect to the Subsequent Mortgage
Loans, the Subsequent Transfer Date.
"Purchase Price": With respect to the Principal Balance of the
Initial Mortgage Loans as of the Cut-Off Date 98%; with respect to the Principal
Balances of all Additional Balances and all Subsequent Mortgage Loans 98%.
"Purchase Request": A request for the purchase of Subsequent
Mortgage Loans in the form of Exhibit A hereto.
"Qualified Replacement Mortgage": A Mortgage Loan substituted
for another pursuant to Section 2.2(b), 3.3 or 3.4 of the Sale and Servicing
Agreement, which (i) bears a variable rate of interest, (ii) has a Loan Rate at
least equal to the Loan Rate of the Mortgage Loan being replaced, (which shall
mean a Mortgage Loan having the same interest rate index, a margin over such
index and a maximum interest rate at least equal to those applicable to the
Mortgage Loan being replaced), (iii) is of the same or better property type and
the same or better occupancy status as the replaced Mortgage Loan, (iv) shall be
of the same or better credit quality classification (determined in accordance
with Originator's credit underwriting guidelines) as the Mortgage Loan being
replaced, (v) shall mature no later than the Payment Date occurring in August,
2023, (vi) has a Combined Loan-to-Value Ratio as of the Initial Cut-Off Date or
Subsequent Cut-Off Date, as applicable, no higher than the Combined
Loan-to-Value Ratio of the replaced Mortgage Loan at such time, (vii) has a
Principal Balance as of the related Replacement Cut-Off Date equal to or less
than the Principal Balance of the replaced Mortgage Loan as of such Replacement
Cut-Off Date, (viii) is in the same lien position or better.
"Reference Bank": As defined in the Indenture.
"Reference Bank Rate": As defined in the Indenture.
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"Remittance Period": As to any Payment Date, the calendar
month preceding the month of such Payment Date.
"REO Property": A Mortgaged Property acquired by the Master
Servicer or any Sub-Servicer on behalf of the Trust through foreclosure or
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
"Replacement Cut-Off Date": With respect to any Qualified
Replacement Mortgage, the first day of the calendar month in which such
Qualified Replacement Mortgage is conveyed to the Trust.
"Repurchase Price": The sum of (a) product of (i) the
outstanding principal balance of the related Mortgage Loan as of such date of
repurchase and (ii) the related Purchase Price, plus (b) any accrued interest as
of such date.
"Sale and Servicing Agreement": The Sale and Servicing
Agreement dated as of June 1, 1998 among the Originator, the Purchaser, the
Issuer and the Indenture Trustee.
"SEC": The Securities and Exchange Commission and any
successor thereto.
"Shareholder's Equity": The aggregate "assets" of Originator
less the aggregate "liabilities" of Originator, with the term "asset" having the
meaning ascribed to such term by GAAP and the term "liabilities" being those
obligations or liabilities of the Originator which, in accordance with GAAP,
would be included on the liability side of the Originator's balance sheet.
"Sponsor": Advanta Mortgage Conduit Services, Inc.
"Subsequent Cut-Off Date": With respect to any Subsequent
Mortgage Loan, the opening of business on the first day of the calendar month in
which the related Subsequent Transfer Date occurs.
"Subsequent Mortgage Loans": Mortgage Loans sold by Originator
to Purchaser on any Subsequent Transfer Date.
"Subsequent Transfer Date": Any date on which Originator
transfers to Purchaser Subsequent Mortgage Loans in accordance with the Sale and
Servicing Agreement.
"Termination Date": The date of termination of the Trust in
accordance with the Trust Agreement.
"Trust": The trust created by the Trust Agreement, the corpus
of which consists of the Mortgage Loans, such other assets as shall from time to
time be identified as deposited in a Certificate Account in accordance with the
Sale and Servicing Agreement, property that secured a Mortgage Loan and that has
become REO, the rights
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of the Sponsor in certain hazard insurance policies maintained by the Mortgagors
or the Master Servicer in respect of the Mortgage Loans, the Policy, an
assignment of certain rights of the Sponsor under this Agreement, such assets as
may be deposited from time to time in a pre-funding account, rights to certain
amounts in a spread account and all proceeds of each of the foregoing (exclusive
of payments of accrued interest on the Mortgage Loans which are due on or prior
to the Cut-Off Date).
"Trust Agreement": The Trust Agreement dated as of June 1,
1998 between the Sponsor and Wilmington Trust Company, as Owner Trustee.
ARTICLE II
Procedures for Purchases of Mortgage Loans;
Conditions Precedent; Settlements
Section 2.01. Purchase and Sale. (a) On the Closing Date in
consideration for the Purchase Price, Originator hereby sells, transfers,
assigns, sets over and otherwise conveys to Purchaser, without recourse, all of
its right, title and interest in and to (i) each Initial Mortgage Loan,
including its Principal Balances and all collections in respect thereof received
on or after the Cut-Off Date (excluding payments in respect of accrued interest
due prior to the Cut-Off Date); (ii) property that secured an Initial Mortgage
Loan that is acquired by foreclosure or deed in lieu of foreclosure; (iii)
Originator's rights under the hazard insurance policies; and (iv) all proceeds
with respect to the foregoing. From time to time, with respect to any Subsequent
Mortgage Loan, pursuant to the terms of this Agreement, Originator shall, on the
related Subsequent Transfer Date transfer, assign, set over and otherwise convey
to Purchaser without recourse all of its right, title and interest in and to the
Principal Balances of the Subsequent Mortgage Loans and all collections in
respect thereof received after the Cut-Off Date for the Subsequent Mortgage
Loans or, with respect to any Additional Balances with respect thereto, on or
after the date of transfer to the Trust.
(b) Each such purchase with respect to the Subsequent Mortgage
Loans shall be initiated by Originator pursuant to the delivery to Purchaser of
a Purchase Request in the manner set forth in Section 2.04.
Section 2.02. Delivery of Documents; Purchase of Initial
Mortgage Loans. Prior to the purchase of Initial Mortgage Loans:
(a) Originator shall have delivered to Purchaser or any agent
appointed by Purchaser the Mortgage File for each of the Mortgage
Loans.
(b) Purchaser shall have received a Mortgage Loan Schedule
pertaining to the related Mortgage Loans.
(c) Purchaser shall have received copies of the resolutions of
the Board of Directors of Originator, certified by its Secretary,
approving this Agreement.
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(d) Purchaser shall have received the Articles of
Incorporation or Charter of Originator.
(e) Purchaser shall have received a certificate of the
Secretary or Assistant Secretary of Originator certifying (i) the names
and signatures of the officers authorized on its behalf to execute this
Agreement, and any other documents to be delivered by it hereunder and
(ii) a copy of Originator's By-laws.
(f) Purchaser shall have received an opinion of counsel to
Originator as to the due authorization, execution and delivery by
Originator of this Agreement and as to the validity and enforceability
of the transfers contemplated hereunder and addressing such other
matters as Purchaser may reasonably request.
(g) Originator shall have instructed the applicable debtor,
trustee, paying agent, authenticating agent, transfer agent, registrar,
predecessor in interest, owner (if the Mortgage Loans are in the form
of a security agreement), or servicer, if any, in respect of the
related Mortgage Loans to reflect on their books and records the
transfer of such Mortgage Loans to Purchaser, as owner or secured party
(if the Mortgage Loans are in the form of a security agreement).
(h) Purchaser shall have received the most recent available
standard servicing or lien reports in summary form, if any, with
respect to all of the mortgages in Originator's portfolio similar to
the Mortgage Loans.
(i) Purchaser shall be permitted to perform its standard loan
review of each Mortgage Loan to be purchased.
(j) UCC-1 financing statements duly executed by Originator as
debtor shall have been filed naming the Purchaser as secured party and
the Indenture Trustee on behalf of the Trust as assignee.
Section 2.03. Delivery of Documents; Purchases of Subsequent
Mortgage Loans. Prior to any purchase of Subsequent Mortgage Loans after the
purchase of Initial Mortgage Loans, the actions, conditions and deliveries
specified in Section 2.02 shall have been taken or made, as the case may be with
respect to the Subsequent Mortgage Loans.
Section 2.04. Purchase Requests. Originator shall deliver to
Purchaser a Purchase Request at least three Business Days prior to the proposed
Purchase Date for any Purchase (unless otherwise agreed by the parties).
Purchaser shall indicate its acceptance or declination of each Purchase Request
by completing the appropriate section of the Purchase Request and returning the
copy thereof to Originator; provided, however, that Purchaser hereby agrees to
accept each Purchase Request if all of the conditions to such Purchase provided
for in this Agreement (including, without limitation, Section 2.02 hereof and
the conditions with respect to the purchase of Subsequent Mortgage Loans) have
been satisfied.
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With respect to all Purchase Requests, if Purchaser does not
send a copy of a completed Purchase Request to Originator within at least three
Business Days prior to the proposed Purchase Date (five Business Days, if the
related Purchase Request was received by Purchaser at least two calendar weeks
prior to the proposed Purchase Date), Purchaser shall be deemed to have accepted
such Purchase Request. Each Purchase Request accepted by Purchaser shall be
irrevocable and binding on Purchaser and the Originator. Originator shall
indemnify Purchaser and hold it harmless against any Losses incurred by
Purchaser as a result of any failure by Originator to timely deliver the
Subsequent Mortgage Loans subject to such Purchase. On the applicable Purchase
Date, the Purchaser shall pay Originator the Purchase Price for the related
Subsequent Mortgage Loans against receipt of the documents required to be
delivered by Originator pursuant to Section 2.03.
Section 2.05. Survival of Representations. The terms and
conditions of the purchase of each Mortgage Loan shall be as set forth in this
Agreement. Originator will be deemed on the Closing Date and on each Purchase
Date to have made to Purchaser the representations and warranties set forth in
Article IV hereof and such representations and warranties of Originator shall be
true and correct on and as of the Closing Date and on and as of such Purchase
Date. Each Purchase Request made by Originator shall be deemed to be a
restatement of each of the covenants of Originator made pursuant to Article V of
this Agreement. In addition, Originator shall reaffirm the representations and
warranties contained in Article IV on the date of disposition of the Mortgage
Loans by the Purchaser pursuant to the Sale and Servicing Agreement.
Section 2.06. Proceeds of Mortgage Loans. The transfer and
sale hereby of all of the Originator's right, title and interest in and to each
Mortgage Loan shall include all proceeds, products and profits derived
therefrom, including, without limitation, all scheduled payments of principal of
and interest on such Mortgage Loan and other amounts due or payable or to become
due or payable in respect thereof and proceeds thereof, including, without
limitation, all monies, goods and other tangible or intangible property received
upon the liquidation or sale thereof, except any payments in respect of accrued
interest due prior to the Cut-Off Date.
Section 2.07. Defective Mortgage Loans. If any Mortgage Loan
is re-transferred to Purchaser pursuant to Section 2.2(b) of the Sale and
Servicing Agreement, Originator shall, at Purchaser's option, either (a)
repurchase such Mortgage Loan at the Repurchase Price, or (b) provide a
Qualified Replacement Mortgage if Originator has any such loans available for
sale at the time, subject to the terms and conditions of the Sale and Servicing
Agreement.
ARTICLE III
Section 3.01. Intent of Parties; Security Interest. Purchaser
and Originator confirm that the transactions contemplated herein are intended as
purchases and sales rather than as loan transactions. In the event, for any
reason, and solely in such event, any transaction hereunder is construed by any
court or regulatory authority as a loan or other purchase and sale of the
related Mortgage Loans, Originator shall be
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deemed to have hereby pledged to Purchaser as security for the performance by
Originator of all of its obligations from time to time arising hereunder and
under any and all Purchases effected pursuant thereto, and shall be deemed to
have granted to Purchaser a security interest in the related Mortgage Loans and
all distributions in respect thereof, and the proceeds of any and all of the
foregoing (collectively, the "Collateral"). In furtherance of the foregoing, (i)
this Agreement shall constitute a security agreement, (ii) Purchaser shall have
all of the rights of a secured party with respect to the Collateral pursuant to
applicable law and (iii) Originator shall execute all documents, including, but
not limited to, financing statements under the Uniform Commercial Code as in
effect in any applicable jurisdictions, as Purchaser may reasonably require to
effectively perfect and evidence Purchaser's first priority security interest in
the Collateral. Originator also covenants not to pledge, assign or grant any
security interest to any other party in any Mortgage Loan sold to Purchaser.
ARTICLE IV
Representations and Warranties
Section 4.01. Representations and Warranties of Originator .
Originator represents, warrants and covenants to Purchaser as of the Closing
Date and with respect to the Subsequent Mortgage Loans as of each related
Subsequent Transfer Date that:
(i) Originator is duly organized, validly existing and in good
standing under its respective jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated
by this Agreement to be conducted by Originator in any state in which a
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance with the terms of
this Agreement;
(ii) Originator has the full corporate power and authority to
originate each Mortgage Loan, and to execute, deliver and perform, and
to enter into and consummate the transactions contemplated by this
Agreement and the execution, delivery and performance of this Agreement
by Originator has been duly authorized by all necessary corporate
action on the part of Originator; and this Agreement, assuming the due
authorization, execution and delivery thereof by the Purchaser,
constitutes a legal, valid and binding obligation of Originator,
enforceable against Originator in accordance with its respective terms,
except to the extent that (a) the enforceability thereof may be limited
by federal or state bankruptcy, insolvency, moratorium, receivership
and other similar laws relating to creditors' rights generally and (b)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(iii) the execution and delivery of this Agreement by
Originator, the consummation by Originator of the transactions herein
contemplated, and the fulfillment by Originator of or compliance by
Originator with the terms hereof
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will not (A) result in a breach of any term or provision of the
charter or by-laws of Originator or (B) conflict with, result in a
breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which Originator
is a party or by which it may be bound, or any statute, order or
regulation applicable to Originator of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Originator, which breach, violation, default or non-compliance would
have a material adverse effect on (a) the business, operations,
financial condition, properties or assets of Originator taken as a
whole or (b) the ability of Originator to perform its obligations under
this Agreement; and Originator is not a party to, bound by, or in
breach or violation of any material indenture or other material
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to Originator's knowledge, would
in the future reasonably be expected to materially and adversely
affect, (x) the ability of Originator to perform its obligations under
this Agreement or (y) the business, operations, financial condition,
properties or assets of Originator taken as a whole;
(iv) Originator is, and currently intends to remain, in good
standing and qualified to do business in each jurisdiction where
failure to be so qualified or licensed would have a material adverse
effect on (a) the business, operations, financial condition, properties
or assets of Originator taken as a whole or (b) the enforceability of
any Mortgage Loan in accordance with the terms of this Agreement;
(v) there is no litigation pending or, to Originator's actual
knowledge, overtly threatened against Originator that would materially
and adversely affect the execution, delivery or enforceability of this
Agreement or for Originator to perform any of its other obligations
hereunder in accordance with the terms hereof;
(vi) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by Originator of, or compliance by Originator with,
this Agreement or the consummation of the transactions contemplated
hereby (except for such consents, approvals, authorizations, or orders
to be obtained in connection with each Purchase Date with respect to
future transactions to be consummated hereunder), or if any such
consent, approval, authorization or order not relating to a future
transaction is required, Originator has obtained the same; and
(vii) Originator has caused to be performed any and all acts
required to preserve the rights and remedies of the Purchaser in any
insurance policies of Originator or a mortgagee applicable to the
Mortgage Loans sold by Originator.
Section 4.02. Representations and Warranties Regarding
Mortgage Loans. With respect to the Mortgage Loans, Originator represents and
warrants to
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Purchaser as of the Closing Date with respect to each Initial Mortgage Loan
conveyed by Originator and as of the related Subsequent Transfer Date with
respect to each Subsequent Mortgage Loan conveyed by Originator as follows:
(i) All of the original or certified documentation set forth
in Section 2.1 of the Sale and Servicing Agreement (including all
material documents related thereto) with respect to each Initial
Mortgage Loan has been or will be delivered to Purchaser on the Closing
Day or, with respect to any Subsequent Mortgage Loans, on the related
Subsequent Transfer Date. All such documentation is true and accurate
in all material respects. Each of the documents and instruments
specified to be included therein has been duly executed and in due and
proper form, and each such document or instrument is in a form
generally acceptable to prudent mortgage lenders that regularly
originate or purchase mortgage loans comparable to the Mortgage Loans
for sale to prudent investors in the secondary market that invest in
mortgage loans such as the Mortgage Loans;
(ii) As of the Closing Day with respect to the Initial
Mortgage Loans, the related Subsequent Transfer Date with respect to
any Subsequent Mortgage Loan (unless otherwise specified) and the
applicable Transfer Date with respect to any Qualified Replacement
Mortgage and as of the date any Additional Balance is created, the
information set forth in the Mortgage Loan Schedule for such Mortgage
Loans is true and correct in all material respects;
(iii) As of the Closing Day and any Subsequent Transfer Date,
no more than 1.00% of the related Cut-Off Date Pool Balance of the
Mortgage Loans is secured by Mortgaged Properties located within any
single zip code area. None of the Mortgage Loans consists of
Date-of-Payment Loans;
(iv) The Mortgages and Credit Line Agreements have not been
assigned or pledged, and Originator is the sole owner and holder of the
Mortgages and Credit Line Agreements free and clear of any and all
liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature, and has full
right and authority, under all governmental and regulatory bodies
having jurisdiction over the Class A Noteholder of the applicable
Mortgage Loan, to sell, assign or transfer the same;
(v) As of the Closing Day with respect to the Initial Mortgage
Loans, the Subsequent Transfer Date with respect to the Subsequent
Mortgage Loans and the applicable Transfer Date with respect to any
Qualified Replacement Mortgage, there is no valid offset, defense or
counterclaim of any obligor under any Credit Line Agreement or
Mortgage. Neither the operation of any of the terms of each Credit Line
Agreement and each Mortgage nor the exercise of any right thereunder
will render either the Credit Line Agreement or the Mortgage
unenforceable, in whole or in part, nor subject to any right of
rescission, set-off, claim, counterclaim or defense, including, without
limitation,
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the defense of usury and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(vi) No Minimum Monthly Payment is more than 59 days
delinquent (measured on a contractual basis); and with respect to the
Initial Mortgage Loans no more than 0.23% (by Initial Cut-Off Date Pool
Balance) were 30-59 days delinquent (measured on a contractual basis).
No Subsequent Mortgage Loan will be more than 30 days delinquent;
(vii) As of the related Cut-Off Date with respect to the
Mortgage Loans and the applicable Transfer Date with respect to any
Qualified Replacement Mortgage, each Credit Line Agreement and each
Mortgage Loan is an enforceable obligation of the related Mortgagor,
except as the enforceability thereof may be limited by the bankruptcy,
insolvency or similar laws affecting creditors' rights generally;
(viii) The weighted average remaining term to maturity of the
Initial Mortgage Loans on a contractual basis as of the Initial Cut-Off
Date for the Mortgage Loans is approximately 273 months. On each date
that the Loan Rates have been adjusted, interest rate adjustments on
the Mortgage Loans were made in compliance with the related Mortgage
and Credit Line Agreement and applicable law. Over the term of each
Initial Mortgage Loan, the Loan Rate may not exceed the related Loan
Rate Cap, if any. The Loan Rate Caps for the Initial Mortgage Loans
range between 16.25% and 24.25%. The Initial Mortgage Loans' margins
range between 0.00% and 7.75% and the weighted average margin is
approximately 3.59% as of the related Cut-Off Date for the Initial
Mortgage Loans. The Loan Rates on such Initial Mortgage Loans range
between 8.50% and 16.25% and the weighted average Loan Rate is
approximately 12.09%;
(ix) The Credit Limits on the Initial Mortgage Loans range
between $10,000 and $384,000 with an average of 32,903.27. As of the
Initial Cut-Off Date for the Initial Mortgage Loans, no Initial
Mortgage Loan had a principal balance in excess of approximately
$284,000 and the average principal balance of the Initial Mortgage
Loans is equal to approximately $31,641.56;
(x) Each Mortgage Loan being transferred to the Trust is a
Mortgage;
(xi) Each Subsequent Mortgage Loan complies with the
requirements in Section 2.4 of the Sale and Servicing Agreement,
including without limitation the conditions described in subsections
(c) and (d) of such Section 2.4;
(xii) Each Mortgaged Property is improved by a single
(one-to-four) family residential dwelling, which may include
condominiums and townhouses but shall not include cooperatives or
mobile homes attached to a foundation, or otherwise, or constitutes
other than real property under applicable state law;
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(xiii) No Mortgage Loan had a Combined Loan-to-Value Ratio in
excess of 125%;
(xiv) As of the Closing Day with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans, each Mortgage is either a valid and
subsisting first or second lien of record on the Mortgaged Property
(subject in the case of any Second Mortgage Loan only to a Senior Lien
on such Mortgaged Property) and subject in all cases to the exceptions
to title set forth in the title insurance policy, with respect to the
related Mortgage Loan, which exceptions are generally acceptable to
banking institutions in connection with their regular mortgage lending
activities, and except for liens for (i) real estate taxes and special
assessments not yet delinquent, (ii) income taxes, (iii) any covenants,
conditions and restrictions, rights of way, easements, and other
matters of public record and such other exceptions to which similar
properties are commonly subject and which do not individually, or in
the aggregate, materially and adversely affect the benefits of the
security intended to be provided by such Mortgage;
(xv) Immediately prior to the transfer and assignment herein
contemplated, Originator held good and indefeasible title to, and was
the sole owner of, each Mortgage Loan conveyed by Originator
(including its Cut-Off Date Pool Balance), all monies due or to become
due with respect thereto, and all proceeds of such Cut-Off Date Pool
Balances with respect thereto, free of any liens, charges, mortgages,
encumbrances or rights of others except liens which will be released
simultaneously with such transfer and assignment; and immediately upon
the transfer and assignment herein contemplated, Purchaser will hold
good and indefeasible title to, and be the sole owner of, each Mortgage
Loan, free of any liens, charges, mortgages, encumbrances or rights of
others except liens which will be released simultaneously with such
transfer and assignment;
(xvi) There is no delinquent tax or assessment lien or
mechanic's lien on any Mortgaged Property, and each Mortgaged Property
is free of substantial damage and is in good repair;
(xvii) Each Mortgage Loan at the time it was made complied in
all material respects with all applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act and other consumer protection laws, real estate
settlement procedure, usury, equal credit opportunity, disclosure and
recording laws;
(xviii) With respect to each First Mortgage Loan, and, to the
best of Originator's knowledge, with respect to each Second Mortgage
Loan, a lender's title insurance policy issued in standard California
Land Title Association form or American Land Title Association form or
other form acceptable in a particular jurisdiction by a title insurance
company authorized to transact business in the state in which the
related Mortgaged Property is situated, was issued on the date
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of origination of the Mortgage Loan and as of the Cut-Off Date and
each applicable Transfer Date with respect to the Subsequent
Mortgage Loan, each such policy is valid and remains in full force and
effect, or a title search or guaranty of title customary in the
relevant jurisdiction was obtained with respect to a Mortgage Loan as
to which no title insurance policy or binder was issued.
(xix) As of the Closing Day with respect to any Mortgage Loan
and the applicable Transfer Date with respect to any Subsequent
Mortgage Loan, each Credit Line Agreement is the legal, valid, binding
and enforceable obligation of the maker thereof and is enforceable in
accordance with its terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (whether considered in a proceeding
or action in equity or at law), and all parties to each Mortgage Loan
had full legal capacity to execute all documents relating to such
Mortgage Loan and convey the estate therein purported to be conveyed;
(xx) The terms of each Credit Line Agreement and each Mortgage
have not been impaired, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of Purchaser. The substance of any such alteration or
modification is reflected on the related Schedule of Mortgage Loans and
has been approved by the primary mortgage guaranty insurer, if any;
(xxi) Except as otherwise required by law, pursuant to the
statute under which the related Mortgage Loan was made, the related
Credit Line Agreement is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(xxii) Each Mortgaged Property is located in the state
identified in the Schedule of Mortgage Loans and consists of one or
more parcels of real property with a residential dwelling erected
thereon;
(xxiii) There is no proceeding pending or threatened for the
total or partial condemnation of any Mortgaged Property, nor is such a
proceeding currently occurring, and each Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, flood, tornado
or other casualty, so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the
premises were intended;
(xxiv) With respect to each Second Mortgage Loan, either (A)
consent for such Mortgage Loan was not required by the holder of the
related Senior Lien prior to the making of such Mortgage Loan or (B)
such consent has been obtained and is contained in the related Mortgage
File;
(xxv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the
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realization against the related Mortgaged Property of the benefits of
the security, including (A) in the case of a Mortgage designated as a
deed of trust, by Indenture Trustee's sale and (B) otherwise by
judicial foreclosure. There is no homestead or other exemption
available which materially interferes with the right to sell the
related Mortgaged Property at a Indenture Trustee's sale or the right
to foreclose the related Mortgage;
(xxvi) As of the Closing Day with respect to any Mortgage Loan
and the applicable Transfer Date with respect to any Subsequent
Mortgage Loan, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Credit Line
Agreement and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; and the Sponsor
has not waived any default, breach, violation or event of acceleration;
(xxvii) To the best knowledge of Originator, all parties to
the Credit Line Agreement and the Mortgage had legal capacity to
execute the Credit Line Agreement and the Mortgage and each Credit Line
Agreement and Mortgage have been duly and properly executed by such
parties;
(xxviii) No selection procedures reasonably believed by
Originator to be adverse to the interests of the Purchaser was utilized
in selecting the Mortgage Loans;
(xxix) No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement which has been
approved by the applicable title insurer (to the extent required by
such title insurer) and which is part of the Mortgage File delivered to
the Purchaser;
(xxx) With respect to each Mortgage Loan that is not a first
mortgage loan, the related prior lien requires equal monthly payments.
At the time of origination of each Mortgage Loan that is not a first
mortgage loan, the related prior lien was not more than 30 days
delinquent;
(xxxi) All required inspections, licenses and certificates
with respect to the use and occupancy of all occupied portions of all
property securing the Mortgages have been made, obtained or issued, as
applicable;
(xxxii) No more than 78% of the Mortgage Loans are second
mortgage loans;
(xxxiii) With respect to each Mortgage Loan that is not a
first mortgage loan, the related prior lien does not provide for
negative amortization;
(xxxiv) With respect to each Mortgage Loan that is not a first
mortgage loan, the maturity date of the Mortgage Loan is prior to the
maturity date of the related prior lien if such prior lien provides for
a balloon payment; and
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(xxxv) Each Mortgage Loan is secured by a property having an
appraised value of less than $1,500,000.
Section 4.03. Representations and Warranties of Purchaser.
Purchaser hereby makes the following representations and warranties, each of
which representations and warranties (i) is material and being relied upon by
Originator and (ii) is true in all respects as of the date of this Agreement:
(i) Purchaser has been duly organized and is validly existing
as a corporation under the laws of the State of Delaware.
(ii) Purchaser has the requisite power and authority and legal
right to execute and deliver, engage in the transactions contemplated
by, and perform and observe the terms and conditions of, this Agreement
to be performed by it.
(iii) This Agreement has been duly authorized and executed by
Purchaser, is valid, binding and enforceable against Purchaser in
accordance with its terms, and the execution, delivery and performance
by Purchaser of this Agreement does not conflict with any material term
or provision of any other agreement to which Purchaser is a party or
any term or provision of the Certificate of Incorporation or the
By-laws of the Purchaser, or any law, rule, equation, order, judgment,
writ, injunction or decree applicable to Purchaser of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Purchaser.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or
court is required under applicable law in connection with the execution
and delivery by Purchaser of this Agreement.
(v) To the best knowledge of Purchaser, there is no action,
proceeding or investigation pending or threatened against Purchaser
before any court, administrative agency or other tribunal (i) asserting
the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement,
or (iii) which is likely to materially and adversely affect the
performance by Purchaser of its obligations under, or the validity or
enforceability of, this Agreement.
(vi) Each purchase of Initial Mortgage Loans and Subsequent
Mortgage Loans hereunder shall constitute a representation by Purchaser
to Originator that Purchaser understands, and that Purchaser has such
knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of, its investment in the
relevant Mortgage Loans.
Section 4.04. Remedies for Breach of Representations and
Warranties; Repurchase Obligation. It is understood and agreed that the
representations and warranties set forth in Section 4.01 and 4.02 shall survive
each sale of Mortgage Loans to Purchaser and shall inure to the benefit of
Purchaser and subsequent transferees
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notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
Loan File. With respect to the representations and warranties contained in
Sections 4.01 and 4.02 which are made to the best of Originator's knowledge or
to the actual knowledge of Originator, if it is discovered by either Originator
or Purchaser that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or Purchaser's interest therein, then notwithstanding
Originator's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made, Originator shall repurchase the related
Mortgage Loan in accordance with this Section 4.04 as if the applicable
representation or warranty was breached, subject to the terms and conditions of
the Sale and Servicing Agreement. Upon discovery by either Originator or
Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of the Mortgage Loans or the
interest of Purchaser (or which materially and adversely affects the interests
of Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the others.
Within 60 days of the earlier of either discovery by or notice
to Originator of any breach of a representation or warranty which materially and
adversely affects the value of any Mortgage Loan or Purchaser's interest
therein, Originator shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured or is not cured or is
not being diligently pursued as evidenced by a notice acceptable to Purchaser,
as evidenced by Purchaser's agreement thereto, at the end of such 60-day period,
Originator shall, at Purchaser's option, either (a) repurchase such Mortgage
Loan at the Repurchase Price, or (b) provide a Qualified Replacement Mortgage,
if Originator has any such loans available for sale at the time subject to the
terms and conditions of the Sale and Servicing Agreement.
At the time of repurchase or substitution, Purchaser and
Originator shall arrange for the assignment of such Mortgage Loan to Originator
and the delivery by Purchaser to Originator of the related Mortgage Loan Files.
In addition to such cure and repurchase obligation, Originator
shall indemnify Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the representations and warranties contained in this Article IV (notwithstanding
any limitation in such representation and warranty as to Originator's
knowledge). It is understood and agreed that the obligations of Originator set
forth in this Section 4.04 to cure or repurchase a defective Mortgage Loan and
to indemnify Purchaser as provided in this Section 4.04 constitute the sole
remedies of Purchaser respecting a breach of the foregoing representations and
warranties.
Any cause of action against Originator relating to or arising
out of the breach of any representations and warranties made in Sections 4.01 or
4.02 shall accrue
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as to any Mortgage Loan upon (i) discovery of such breach by
Purchaser or notice thereof by Originator to Purchaser, (ii) failure by
Originator to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon Originator by Purchaser for compliance with the
relevant provisions of this Agreement.
ARTICLE V
Covenants and Warranties of Originator
So long as this Agreement remains in effect or Originator
shall have any obligations hereunder, Originator hereby covenants and agrees
with Purchaser as follows:
Section 5.01. Affirmative Covenants.
(a) Originator shall do all things necessary to remain duly
incorporated, validly existing and in good standing in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted except where failure to
maintain such authority would not have a material adverse effect on the ability
of Originator to conduct its business or to perform its obligations under this
Agreement.
(b) At all times during this Agreement, Originator shall
possess sufficient net capital and liquid assets (or ability to access the same)
to satisfy its obligations as they become due in the normal course of business.
(c) Originator shall permit Purchaser or its accountants,
attorneys or other agents access to all of the books and records relating to
Mortgage Loans purchased and retained by Purchaser for inspection and copying
during normal business hours at all places where Originator conducts business.
Section 5.02. Negative Covenants.
(a) Originator shall not assign or attempt to assign this
Agreement or any rights hereunder, without first obtaining the specific written
consent of Purchaser.
(b) Originator shall not amend its Articles of Incorporation
or By-laws, which amendment shall have or is likely to have an adverse effect
upon Purchaser or its interests under this Agreement, without the prior written
consent of Purchaser.
(c) Originator shall not (i) dissolve or terminate its
existence or (ii) transfer any assets to any affiliate except as otherwise
expressly permitted or contemplated hereby.
(d) Except with the written consent of Purchaser, Originator
shall not guarantee, endorse or otherwise in any way become or be responsible
for any obligations of any other person, entity or affiliate, including, without
limitation, whether directly or indirectly by agreement to purchase the
indebtedness of any other person or through the
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purchase of goods, supplies or services, or maintenance of working capital or
other balance sheet covenants or conditions, or by way of stock purchase,
capital contribution, advance or loan for the purposes of paying or discharging
any indebtedness or obligation of such other person or otherwise; provided,
however, that nothing contained herein shall prevent Originator from
indemnifying its officers, directors and agents pursuant to its By-laws and its
Articles of Incorporation.
(e) Originator will not commit any act in violation of
applicable laws, or regulations promulgated pursuant thereto that relate to the
Mortgage Loans or that materially and adversely affect the operations or
financial conditions of Originator.
ARTICLE VI
Sale of Mortgage Loans from the Purchaser to the Trust
Section 6.01. Sale and Servicing Agreement. It is the intent
of Originator and Purchaser that with respect to the Mortgage Loans, Purchaser
shall concurrently sell all of its right, title and interest to the Mortgage
Loans and all other property conveyed to it hereunder to the Trust pursuant to
the Sale and Servicing Agreement.
With respect to such sale, Originator agrees:
(i) to cooperate fully with Purchaser and the Trust with
respect to all reasonable requests and due diligence procedures
including participating in meetings with rating agencies, insurers and
such other parties as Purchaser shall designate and participating in
meetings with the Trust and providing information reasonably requested
by the Trust;
(ii) to execute all other necessary documents to effect the
transactions contemplated therein;
(iii) Originator shall make the representations and warranties
set forth herein regarding Originator and the Mortgage Loans as of the
date of the transfer to the Trust;
(iv) to deliver to Purchaser for inclusion in any prospectus
or other offering material such publicly available information
regarding Originator, its financial condition and the mortgage loan
delinquency, foreclosure and loss experience of its portfolio as is
customarily set forth in a prospectus supplement with respect to a
comparable mortgage pool, the underwriting of mortgage loans, the
servicer, the servicing and collection of mortgage loans, lending
activities and loan sales of the servicer, regulatory matters and
delinquency and loss experience and any additional information
reasonably requested by Purchaser, or as is otherwise reasonably
requested by Purchaser and which Originator is capable of providing
without unreasonable effort or expense, and to indemnify Purchaser and
its affiliates for material misstatements or omissions contained in
such information;
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(v) to deliver to Purchaser, and to any Person designated by
Purchaser, such legal documents and in-house opinions of counsel as are
customarily delivered by originators and reasonably determined by
Purchaser to be necessary in connection with the transactions
contemplated by the Sale and Servicing Agreement, it being understood
that the cost of any opinions of outside special counsel that may be
required shall be the responsibility of Originator; and
(vi) to cooperate fully with Purchaser and any prospective
Purchaser with respect to the preparation of Mortgage Loan documents
and other documents and with respect to servicing requirements
reasonably requested by the rating agencies and insurers.
ARTICLE VII
Termination; Additional Remedies
Section 7.01. Termination of Commitment to Purchase. The
agreement of Purchaser to purchase Mortgage Loans from Originator hereunder, and
the agreement of Originator to sell Mortgage Loans hereunder, shall terminate
automatically on the first day of the Rapid Amortization Period. All other
provisions hereof shall continue in force and effect until the Termination Date.
Section 7.02. Additional Remedies. Upon the occurrence of a
Rapid Amortization Event under the Indenture due to an act or omission of
Originator (an "Event of Termination"), Purchaser and its assignees shall have,
in addition to all other rights and remedies under this Agreement or otherwise,
all other rights and remedies provided under the UCC of each applicable
jurisdiction and other applicable laws, which rights shall be cumulative.
Without limiting the foregoing, the occurrence of an Event of Termination shall
not deny to Purchaser or its assignees any remedy in addition to termination of
its obligations to make purchases hereunder to which Purchaser or its assignee
may be otherwise appropriately entitled, whether by statute or applicable law,
at law or in equity.
ARTICLE VIII
Term
This Agreement shall terminate on the Termination Date.
ARTICLE IX
Exclusive Benefit of Parties; Assignment
This Agreement is for the exclusive benefit of the parties
hereto and their respective successors and assigns and shall not be deemed to
give any legal or equitable right to any other person except the Sponsor, the
Trust, the holders of the Class A Notes
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and the Insurer. This Agreement may not be assigned by any party hereto without
the prior written consent of the other party hereto except to the Trust.
ARTICLE X
Amendment; Waivers
This Agreement may be amended from time to time only by
written agreement of Originator and Purchaser with the prior written consent of
the Insurer, which consent shall not be unreasonably withheld. Any forbearance,
failure, or delay by a party in exercising any right, power, or remedy hereunder
shall not be deemed to be a waiver thereof, and any single or partial exercise
by a party of any right, power or remedy hereunder shall not preclude the
further exercise thereof. Every right, power and remedy of a party shall
continue in full force and effect until specifically waived by it in writing. No
right, power or remedy shall be exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred hereby or hereafter available at law or in equity or by statute or
otherwise.
ARTICLE XI
Execution in Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same instrument.
ARTICLE XII
Effect of Invalidity of Provisions
In case any one or more of the provisions contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.
ARTICLE XIII
Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its rules
regarding conflict of laws.
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ARTICLE XIV
Notices
Any notices, consents, directions, demands and other
communications given under this Agreement (unless otherwise specified herein)
shall be in writing and shall be deemed to have been duly given when personally
delivered at or telecopied to the respective addresses or facsimile numbers, as
the case may be, set forth on the signature page hereof for Originator and
Purchaser, or to such other address or facsimile number as either party shall
give notice to the other party pursuant to this Section. Notices, consents,
etc., may also be effected by first class mail, postage prepaid sent to the
foregoing addresses and will be effective upon receipt by the intended
recipient.
ARTICLE XV
Entire Agreement
This Agreement, including the Exhibits and Schedules hereto,
contains the entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements between
them, whether oral or written, of any nature whatsoever with respect to the
subject matter hereof.
ARTICLE XVI
Indemnities
Without limiting any other rights which Purchaser or
Originator may have hereunder or under applicable law, and in addition to any
other indemnity provided hereunder, Originator hereby agrees to indemnify
Purchaser and its respective officers, directors, agents and employees (each, an
"Indemnified Party") from and against any and all Losses incurred by any of them
relating to or resulting from:
(1) any representation or warranty made by Originator (or any
officers, employees or agents of Originator) under or in connection
with this Agreement, any periodic report required to be furnished
thereunder or any other information or document delivered by Originator
pursuant hereto, which shall have been false or incorrect in any
material respect when made or deemed made;
(2) the failure by Originator to (a) comply with any
applicable law, rule or regulation with respect to any Purchase or (b)
perform or observe any material obligation or covenant hereunder; or
(3) the failure by Originator (if so requested by Purchaser)
to execute and properly file, or any delay in executing and properly
filing, financing statements or other similar instruments or documents
under the Uniform Commercial Code of any applicable jurisdiction or
other applicable laws with respect to the Mortgage Loans.
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Promptly after receipt by an Indemnified Party under this
Article XVI of notice of the commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Article XVI, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to any Indemnified Party
otherwise than under this Article XVI. In case any such action is brought
against any Indemnified Party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
Indemnified Party promptly after receiving the aforesaid notice from such
Indemnified Party, to assume the defense thereof, with counsel satisfactory to
such Indemnified Party; provided, however, that if the defendants in any such
action include both the Indemnified Party and the indemnifying party and the
Indemnified Party or parties shall have reasonably concluded that there may be
legal defenses available to it or them and/or other Indemnified Parties that are
different from or additional to those available to the indemnifying party, the
Indemnified Party or parties shall have the right to elect separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such Indemnified Party or parties. Upon receipt of notice
from the indemnifying party to such Indemnified Party of its election so to
assume the defense of such action and approval by the Indemnified Party of
counsel, the indemnifying party will not be liable for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by Originator in the case of Article XVI,
representing the Indemnified Parties under this Article XVI, who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the Indemnified
Party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall only be in respect of the counsel
referred to in such clause (i) or (iii).
ARTICLE XVII
RESPA Obligations
Originator agrees to discharge on Purchaser's behalf all
obligations, including, without limitation, all disclosure obligations, which
Purchaser may have under the Real Estate Settlement Procedures Act of 1974, as
amended, in connection with Purchaser's purchases of Mortgage Loans hereunder.
Purchaser agrees to provide Originator with such information as is reasonably
necessary for Originator to discharge such obligations and hereby appoints
Originator as its agent in its name for the purposes of, and only for the
purposes of, performing such obligations. Originator hereby agrees to indemnify
Purchaser and its respective officers, directors, agents and employees from
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any losses suffered by any such party in connection with Originator's
obligations under this Article XVII.
ARTICLE XVIII
Survival
All indemnities and undertakings of Originator and Purchaser
hereunder shall survive the termination of this Agreement.
ARTICLE XIX
Consent to Service
Each party irrevocably consents to the service of process by
registered or certified mail, postage prepaid, to it at its address given
pursuant to Article XIV hereof.
ARTICLE XX
Submission to Jurisdiction; Waiver of Trial by Jury
With respect to any claim arising out of this Agreement each
party irrevocably submits to the exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough of
Manhattan, City of New York, and each party irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party; provided that service of process is made as set
forth in Article XIX hereof, or by any other lawful means. To the extent
permitted by applicable law, Purchaser and Originator each irrevocably waive all
right of trial by jury in any action, proceeding or counterclaim arising out of
or in connection with this Agreement or any matter arising hereunder.
ARTICLE XXI
Construction
The headings in this Agreement are for convenience only and
are not intended to influence its construction. References to Articles,
Sections, Schedules and Exhibits in this Agreement are to the Articles, Sections
of and Schedules and Exhibits to this Agreement. The Schedules and Exhibits are
hereby incorporated into and form a part of this Agreement. In this Agreement,
the singular includes the plural, the plural the singular, the words "and" and
"or" are used in the conjunctive or disjunctive as the sense
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and circumstances may require and the word "including" means "including, but not
limited to." Unless otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding."
ARTICLE XXII
Further Agreements
Originator and Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, Purchaser and Originator have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the date first written above.
ADVANTA MORTGAGE CONDUIT
SERVICES INC.,
as Purchaser
By: /s/ XXXXX X. XXXXXXX
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
ADVANTA NATIONAL BANK,
as Originator
By: /s/ XXXXX X. XXXXXXX
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
[Signature Page to Purchase Agreement]
31
Purchase Agreement
EXHIBIT A
[Form of Purchase Request]
Advanta Mortgage Conduit Services, Inc.
00000 Xxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxxxxxx, XX 00000
Pursuant to Section 2.04 of the Purchase Agreement dated as of
June 1, 1998 between Advanta National Bank (the "Originator") and you, we hereby
offer to sell, transfer and assign to you all of Originator's right, title and
interest in and to the Subsequent Mortgage Loans identified in the attached
schedule on the following date (the "Purchase Date"): ,
including any Additional Balances thereto.
Please acknowledge your acceptance of such offer by executing
this Purchase Request in the space provided below and returning it to Advanta
Mortgage Conduit Services, Inc. at _______________________________________
by facsimile with an original acceptance to follow by first class mail.
The failure of Advanta Mortgage Conduit Services, Inc. to
return this Purchase Request, after execution by Advanta Mortgage Conduit
Services, Inc., to the Originator in the manner provided above within three
Business Days prior to the Purchase Date (five business days, if this Purchase
Request was received by you at least two calendar weeks prior to the
above-referenced Purchase Date) shall constitute an acceptance of the offer
communicated hereby.
Very truly yours,
[Originator]
By:
-------------------------------
Name:
Title:
Agreed to and acknowledged
this day of , .
---- ---------- ----
Advanta Mortgage Conduit Services, Inc.
By:
------------------------------------
Name:
Title:
