Exhibit 10.2
HOME LOAN SALE AGREEMENT
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THIS HOME LOAN SALE AGREEMENT (this "Agreement"), made as of November
1, 1998, by and among CITY NATIONAL BANK OF WEST VIRGINIA, a national banking
association ("City National" or the "Seller"), CITY CAPITAL MARKETS CORPORATION,
a Delaware corporation ("City Capital" or the "Transferor"), and FINANCIAL ASSET
SECURITIES CORP., a Delaware corporation (the "Depositor") and acknowledged by
the Indenture Trustee and the Custodian, each as identified herein, recites and
provides as follows:
RECITALS
1. Schedule I attached hereto (the "Home Loan Schedule") and made a part
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hereof lists the home loans to be sold pursuant to this Agreement (the "Home
Loans"). The Home Loans are currently owned by the Seller and the Seller desires
to sell such Home Loans to City Capital. City Capital is a wholly-owned
subsidiary of City National.
2. City Capital desires to purchase the Home Loans and intends immediately
after its purchase to transfer the Home Loans to the Depositor.
3. The Depositor desires to purchase the Home Loans from City Capital and
intends immediately after such purchase to transfer the Home Loans to City
Capital Home Loan Trust 1998-4 (the "Issuer"), which will be formed pursuant to
the terms of a Deposit Trust Agreement (the "Trust Agreement"), dated as of
November 1, 1998, by and among the Depositor, Wilmington Trust Company, as Owner
Trustee (the "Owner Trustee"), City National, as Servicer (the "Servicer"), and
Norwest Bank Minnesota, National Association, as Trust Paying Agent.
4. The Issuer will in turn pledge the Home Loans to Norwest Bank Minnesota,
National Association, as Indenture Trustee (the "Indenture Trustee"), under an
Indenture to be dated as of November 1, 1998 (the "Indenture"), by and among the
Issuer and Norwest Bank Minnesota, National Association, as Indenture Trustee,
Note Administrator and Custodian, pursuant to which the Issuer's Asset-Backed
Notes, Series 1998-4 (the "Notes"), will be issued.
5. The Notes shall be sold pursuant to an Underwriting Agreement dated
November 23, 1998 (the "Underwriting Agreement"), between the Depositor and
Greenwich Capital Markets, Inc. (the "Underwriter"), and will be offered as
described in the Prospectus Supplement (the "Prospectus Supplement") and the
Prospectus ("the Prospectus") relating to the offering of the Notes.
6. The certificates of beneficial ownership of the Issuer (the "Trust
Certificates") will be issued by the Issuer to the Depositor, as part of the
consideration for the transfer of the Home Loans to the Issuer. Immediately
thereafter, the Depositor will transfer the Trust Certificates to City Capital,
as part of the consideration for its transfer of the Home Loans to the
Depositor.
7. Capitalized terms used and not defined herein shall have the meanings
assigned to them in Exhibit B attached hereto or, if not defined therein, in the
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Indenture.
AGREEMENT
NOW THEREFORE, in consideration of the above premises, the mutual
promises herein made and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. SALE AND PURCHASE.
(a) Subject to the terms and conditions of this Agreement, the Seller
agrees to sell to City Capital, and City Capital agrees to purchase from the
Seller, and contemporaneously therewith, City Capital agrees to sell to the
Depositor, and the Depositor agrees to purchase from City Capital, on the date
of the issuance of the Notes (the "Closing Date"), which is expected to be on or
about November 30, 1998, Home Loans having an aggregate principal balance on
November 1, 1998 (the "Cut-off Date") of approximately $182,598,310 (the
"Cut-off Date Principal Balance").
(b) The Seller has prepared, or provided information to City Capital
enabling it to prepare, the schedule attached hereto as Schedule I identifying
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all of the Home Loans to be purchased on the Closing Date and describing such
Home Loans. The Seller shall, with the consent of City Capital and the
Depositor, amend or modify, or provide information to City Capital enabling it
to amend or modify, Schedule I on or prior to the Closing Date if necessary to
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reflect the inclusion of additional Home Loans and the withdrawal of certain of
the Home Loans currently listed on the attached Schedule I. Schedule I, as so
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amended or modified (the "Home Loan Schedule"), shall conform to the
requirements of City Capital and the Depositor as set forth in this Agreement
and shall be used as the definitive Home Loan Schedule attached as an exhibit to
the Indenture identifying all of the Home Loans actually transferred by the
Seller to City Capital and accepted by City Capital, and transferred by City
Capital and accepted by the Depositor, on the Closing Date.
(c) The sales of the Home Loans hereunder shall be effected pursuant to a
Xxxx of Sale substantially in the form attached hereto as Exhibit A (the "Xxxx
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of Sale").
SECTION 2. POOL PURCHASE PRICE.
(a) As full consideration for the Seller's sale of the Home Loans to City
Capital, City Capital will (1) pay to the Seller on the Closing Date, cash in
immediately available funds equal to the aggregate proceeds of the sale of the
Notes ($168,378,147.70, less associated transaction expenses, as described in
Section 10) and (2) accept the Trust Certificates, as the Seller's designee
(collectively, the "Pool Purchase Price"). As full consideration for City
Capital's sale of the Home Loans to the Depositor, the Depositor will (1) pay or
cause the Underwriter to pay to City Capital cash in the amount of
$168,378,147.70 and (2) transfer and deliver the Trust Certificates to City
Capital.
(b) The Depositor, or any assignee or transferee of the Depositor (which
will include the Issuer and the Indenture Trustee) shall be entitled to all
Monthly Payments received on and after the Cut-off Date and all Principal
Prepayments and other unscheduled collections of principal collected in respect
of the Home Loans on and after the Cut-off Date.
(c) Pursuant to the Trust Agreement, the Depositor will transfer and assign
all of its right, title, and interest in and to the Home Loans to the Issuer,
which will in turn pledge all of its right, title, and interest in and to the
Home Loans to the Indenture Trustee pursuant to the Indenture for the benefit of
the holders of the Notes and the Note Insurer.
SECTION 3. TRANSFER OF THE HOME LOANS.
(a) Transfer of Ownership. Upon the sales of the Home Loans provided for
herein (the "Sales"), the ownership of each Home Loan and the related Home Loan
Documents shall be vested in the Depositor, and the ownership of all other
records and documents with respect to any Home Loan prepared by or which come
into the possession of the Seller shall immediately vest in the Depositor upon
such preparation or possession. The Seller shall promptly deliver to Norwest
Bank Minnesota, National Association, as custodian (the "Custodian") on behalf
of the Indenture Trustee any documents that come into its possession with
respect to the Home Loans following the Sales of the Home Loans. Prior to such
delivery, the Seller shall hold any such documents itself for the benefit of the
Depositor, its successors and assigns.
All documents with respect to any Home Loan in the possession of City
National following the execution by City National of the Servicing Agreement
shall be held by City National, in its capacity as Servicer, as bailee and agent
for the Depositor, its successors and assigns (including particularly the Issuer
and the Indenture Trustee), and shall only be released in accordance with the
terms of the Servicing Agreement.
(b) Delivery of Home Loan Files. Not later than five Business Days prior to
the Closing Date, the Seller shall deliver to the Custodian each of the Home
Loan Documents (other than the assignments of Mortgage) required to be included
in the Home Loan File for substantially all of the Home Loans, and any remaining
Home Loan Files shall be delivered by or on behalf of the Seller to the
Custodian no later than two Business Days prior to the Closing Date. The
Mortgage Note for each Home Loan shall be endorsed without recourse to the
Indenture Trustee and the Mortgage for each Home Loan shall be assigned to the
Indenture Trustee. Each endorsement of a Mortgage Note to the Indenture Trustee
shall be in the following form:
WITHOUT RECOURSE,
PAY TO THE ORDER OF
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
AS TRUSTEE
The Seller shall deliver the assignments of Mortgage in recordable form to
the Custodian no later than nine (9) Business Days following the Closing Date.
The Custodian shall return the assignments of Mortgage to the Seller as soon as
possible thereafter for recordation in accordance with the provisions of Section
3(d). Each assignment of a Mortgage relating to a Home Loan shall be made to
"NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, AS TRUSTEE under an Indenture
w/City Capital Home Loan Trust 1998-4 dated as of November 1, 1998."
Prior to the transfer and sale of the Home Loans pursuant to this
Agreement, all Home Loan Documents delivered to the Custodian shall be held by
the Custodian for the benefit of the Seller, and the possession by the Custodian
of such Home Loan Documents will be at the will of the Seller and will be in a
custodial capacity only. Following the (i) Sales of the Home Loans in accordance
with the terms and upon satisfaction of the conditions of this Agreement and
(ii) transfer of the Home Loans to the Issuer, the Custodian will hold all Home
Loan Documents delivered to it hereunder for the benefit of the Issuer, as its
agent and bailee, until the Home Loans are pledged by the Issuer to the
Indenture Trustee.
(c) Examination of Home Loan Documents; Acceptance of Home Loans. Prior to
the Closing Date, the Seller shall either (1) deliver to City Capital and the
Depositor, or their respective designees in escrow, for examination, the Home
Loan Documents pertaining to each Home Loan, or (2) make such Home Loan
Documents available to City Capital and the Depositor, or their respective
designees for examination at the Seller's offices or at such other place as the
Seller shall specify. City Capital, the Depositor, the Issuer, the Indenture
Trustee, the Custodian or a designee of any such entity may review the Home Loan
Documents.
Prior to the Closing Date, the Custodian shall review certain of the
documents delivered pursuant to Section 3(b) hereof as provided in Section
6.15(a) of the Indenture. No later than 45 days following the Closing Date, the
Custodian shall conduct such further review of the Home Loan Documents as is
required by Section 6.15(b) of the Indenture (the "Interim Certification"). A
final review shall be conducted by the Custodian prior to the first anniversary
of the Closing Date as provided in Section 6.15(c) of the Indenture. If at any
time City Capital, the Depositor, the Seller, the Note Insurer, or the Indenture
Trustee, or the Custodian on its behalf, discovers or receives notice that any
Home Loan Document is missing or defective in any material respect with respect
to any Home Loan, or that there exists any material discrepancy between the Home
Loan Documents and the Home Loan Schedule, it shall promptly notify the Seller
in writing thereof. Upon its receipt of notice of such incompleteness, defect or
discrepancy, the Seller shall cure or repurchase the affected Home Loan to the
extent provided in Section 7(b) hereof. At the time of any such repurchase, the
Custodian on its behalf, shall release documents in its possession relating to
such Home Loan to the Seller. The fact that City Capital, the Depositor, the
Indenture Trustee, or a designee of either entity (including the Custodian on
behalf of the Indenture Trustee) has conducted or has failed to conduct any
partial or complete examination of the Home Loan Documents shall not affect the
rights of the Depositor, City Capital, the Indenture Trustee, or the Note
Insurer (or any assignee or successor of any of them) to demand repurchase or
other relief as provided herein.
(d) Recordation of Assignments of Mortgage. Subject to the Sales of the
Home Loans in accordance with the terms of this Agreement, the Depositor hereby
authorizes and instructs the Seller, and the Seller hereby agrees, to record (or
to cause one of its affiliates to record) all assignments of Mortgage with
respect to each Home Loan required to be contained in the Home Loan File
pursuant to the Indenture in the public recording office for the jurisdiction in
which the related Mortgaged Property is located. All recording fees relating to
the recordation of the assignments of Mortgage as described above shall be paid
by the Seller or an affiliate of the Seller. Such assignments of Mortgage with
respect to each Home Loan must be delivered to the recording office of the
appropriate jurisdiction within 90 days after the Closing Date, and the failure
of the related assignment to contain evidence of recording thereon within one
year after the Closing Date will constitute a defect for purposes of Section 7
below if such failure would have a material adverse effect on the Noteholders or
the Note Insurer; provided, however, that if such failure to record any
assignment of Mortgage relates solely to the inability of the Seller to deliver
an original Mortgage or intervening assignment of Mortgage because the original
of such document has not been returned by the applicable recording office and
the Seller has provided to the Note Insurer evidence of recordation reasonably
satisfactory to the Note Insurer, the Seller shall not be obligated to
repurchase the related Home Loan.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
(a) General Representations. The Seller hereby represents and warrants to
City Capital and the Depositor as of the date of this Agreement, or as of such
other date as is specifically provided, as follows:
(1) The Seller is a national bank, duly organized, validly existing,
and in good standing under the laws of the United States of America. The
Seller has the full power and authority to own its properties and conduct
its business as its business is presently conducted.
(2) The Seller has the full power, authority, and legal right to
transfer and convey the Home Loans to City Capital, and has the full power,
authority (corporate and other) and legal right to execute and deliver,
engage in the transactions contemplated by, and perform and observe the
terms and conditions of, this Agreement.
(3) This Agreement has been duly and validly authorized, executed, and
delivered by the Seller and (assuming the due authorization, execution, and
delivery hereof by City Capital and the Depositor) constitutes the valid,
legal, and binding agreement of the Seller, enforceable against the Seller
in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, receivership, moratorium, or other similar laws affecting
creditors' rights generally and to general principles of equity, regardless
of whether such enforcement is sought in a proceeding in equity or at law.
(4) No consent, approval, authorization, or order of or registration
or filing with, or notice to, any governmental authority or court is
required for the execution, delivery, and performance of or compliance by
the Seller with this Agreement or the consummation by the Seller of any
other transaction contemplated hereby.
(5) Neither the execution and delivery of this Agreement by the
Seller, nor the consummation by the Seller of the transactions herein
contemplated, nor compliance with the provisions hereof by the Seller, will
(A) conflict with or result in a breach of, or constitute a default under,
any of the provisions of the Seller's organizational documents or by-laws,
or any law, governmental rule or regulation, or any judgment, decree, or
order binding on the Seller or any of its properties, or any of the
provisions of any indenture, mortgage, deed of trust, contract, or other
instrument to which the Seller is a party or by which the Seller is bound
or (B) result in the creation or imposition of any lien, charge, or
encumbrance which would have a material adverse effect upon any of the
Seller's properties pursuant to the terms of any such indenture, mortgage,
deed of trust, contract, or other instrument.
(6) There are no actions, suits, proceedings, or investigations
pending or, to the Seller's knowledge, threatened against the Seller that
should reasonably be expected to affect adversely the transfer of the Home
Loans to City Capital, the issuance of the Notes, or the execution,
delivery, performance, or enforceability of this Agreement or have a
material adverse effect on the financial condition of the Seller.
(7) The Seller is, and, immediately prior to the sale of the Home
Loans to City Capital, the Seller will be, the sole owner of, and will have
good, indefeasible and marketable title to, the Home Loans, subject to no
prior lien, mortgage, security interest, pledge, charge, or other
encumbrance, except any lien to be released prior to or concurrently with
the purchase of the Home Loans by City Capital. Following the sale of the
Home Loans, City Capital will own such Home Loans, free and clear of any
prior lien, mortgage, security interest, pledge, charge, or other
encumbrance, except the lien created by the Indenture.
(8) The Seller has not dealt with any broker, investment banker, agent
or other person that may be entitled to any commission or compensation in
connection with the Sales of the Home Loans.
(9) The Seller will treat the transfer of the Home Loans to City
Capital as a sale on its books and records in accordance with generally
accepted accounting principles.
(10) With respect to each Home Loan, the Seller is in possession of
each of the Mortgage Loan Documents required to be included in the related
Home Loan File (except to the extent such Home Loan File has been delivered
to the Custodian or Indenture Trustee as described in this Agreement).
(11) The description of the Home Loans set forth in the Prospectus
Supplement under the heading "The Pool" does not contain any untrue
statement of any material fact or omit any material fact required to be
stated therein or necessary in order to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading.
(12) The consideration received by the Seller upon the sale of the
Home Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Home Loans.
(13) The Seller is solvent and the sale of the Home Loans to City
Capital as contemplated hereby will not cause the Seller to become
insolvent. The sale of the Home Loans to City Capital is not undertaken
with the intent to hinder, delay or defraud any of the Seller's creditors.
(14) On the Closing Date, 55% or more (by aggregate principal balance)
of the Home Loans do not constitute "real estate mortgages" for the purpose
of Treasury Regulation ss.301.7701 under the Code. For this purpose a Home
Loan does not constitute a "real estate mortgage" if:
(i) The Home Loan is not secured by an interest in real property, or
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(ii) The Home Loan is not an "obligation principally secured by an
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interest in real property." For this purpose an "obligation is principally
secured by an interest in real property" if it satisfies either test set
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out in paragraph (1) or paragraph (2) below.
(1) The 80-percent test. An obligation is principally secured by an
interest in real property if the fair market value of the
interest in real property securing the obligation
(A) was at least equal to 80 percent of the adjusted issue price
of the obligation at the time the obligation was originated
(or, if later, the time the obligation was significantly
modified); or
(B) is at least equal to 80 percent of the adjusted issue price
of the obligation on the Closing Date.
For purposes of this paragraph (1), the fair market value of
the real property interest must be first reduced by the
amount of any lien on the real property interest that is
senior to the obligation being tested, and must be further
reduced by a proportionate amount of any lien that is in
parity with the obligation being tested, in each case before
the percentages set forth in (1)(A) and (1)(B) are
determined. The adjusted issue price of an obligation is its
issue price plus the amount of accrued original issue
discount, if any, as of the date of determination.
(2) Alternative test. An obligation is principally secured by an
interest in real property if substantially all of the proceeds of
the obligation were used to acquire or to improve or protect an
interest in real property that, at the origination date, is the
only security for the obligation. For purposes of this test, loan
guarantees made by the United States or any state (or any
political subdivision, agency, or instrumentality of the United
States or of any state), or other third party credit enhancement
are not viewed as additional security for a loan. An obligation
is not considered to be secured by property other than real
property solely because the obligor is personally liable on the
obligation. For this purpose only, substantially all of the
proceeds of the obligations means 66-2/3% or more of the gross
proceeds.
(15) With respect to each Home Loan that is not a first mortgage loan,
either (A) no consent for the Home Loan is required by the holder of the
related prior lien or (B) such consent has been obtained and has been
delivered to the Indenture Trustee.
(16) No Home Loan was selected from the Seller's assets in a manner
which would cause it to be adversely selected as to credit risk from the
pool of home loans owned by the Seller.
(17) The transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller to City Capital are not subject to the bulk
transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
(18) All of the Home Loans have a first monthly payment due no later
than _________________, 1998.
(b) Home Loan Representations. The Seller hereby makes the following
representations and warranties to City Capital and the Depositor with respect to
each Home Loan, as of the date of this Agreement.
(1) The information pertaining to each Home Loan set forth in the Home
Loan Schedule was true and correct in all material respects as of the
Cut-off Date.
(2) As of the Cut-off Date, none of the Home Loans were more than 30
days contractually past due. The Seller has not advanced funds or induced,
solicited, or knowingly received any advance of funds from a party other
than the Obligor, directly or indirectly, for the payment of any amount
required by the Home Loan.
(3) The terms of the related Mortgage Note and the related Mortgage
contain the entire agreement of the parties thereto and have not been
impaired, waived, altered, or modified in any respect, except by written
instruments reflected in the related Home Loan File and recorded, if
necessary, to maintain the lien priority of the related Mortgage. No other
instrument of waiver, alteration, expansion, or modification has been
executed with respect to such Mortgage Note or Mortgage, and no Obligor has
been released, in whole or in part, except in connection with an assumption
agreement which is included in the related Home Loan File.
(4) The related Mortgage Note and the related Mortgage are not subject
to any set-off rights, claims, counterclaims, or defenses, including the
defense of usury or of fraud in the inducement, nor will the operation of
any of the terms of such Mortgage Note or Mortgage, or the exercise of any
right thereunder, render such Mortgage Note or Mortgage unenforceable, in
whole or in part, or subject to any right of rescission, set-off,
counterclaim, or defense, including the defense of usury, and no such right
of rescission, set-off, counterclaim, or defense has been asserted with
respect thereto.
(5) Neither the related Mortgage Note nor the related Mortgage has
been satisfied, canceled, rescinded, or subordinated, in whole or part, and
the Seller has not waived the performance by the related Obligor of any
action, if the Obligor's failure to perform such action would cause the
Mortgage Note to be in default, except as otherwise permitted by Section
4(b)(3) above. The related Mortgaged Property has not been released from
the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, subordination, release,
cancellation, or rescission.
(6) The related Mortgage is a valid, subsisting and enforceable lien
on the related Mortgaged Property, including the land and all buildings on
the Mortgaged Property.
(7) The related Mortgage Note and the related Mortgage are genuine and
each is the legal, valid, and binding obligation of the maker thereof,
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other similar laws
affecting creditors' rights in general and by general principles of equity.
(8) To the Seller's knowledge, all parties to the related Mortgage
Note and the related Mortgage had legal capacity to enter into the Home
Loan and to execute and deliver the Mortgage Note and Mortgage at the dates
thereof, and the Mortgage Note and Mortgage have been duly and properly
executed by such parties.
(9) The proceeds of the Home Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all
applicable requirements set forth in the related Home Loan Documents have
been complied with.
(10) As of the Cut-off Date, there is no default, breach, violation,
or event of acceleration existing under the Home Loan, the related Mortgage
Note and the related Mortgage, and there is no event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute such a default, breach, violation, or event of
acceleration.
(11) The related Mortgage Note and the related Mortgage contain
customary and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization against the
related Mortgaged Property of the benefits of the security provided
thereby, including, (A) in the case of any Mortgage designated as a deed of
trust, by trustee's sale, and (B) otherwise by judicial foreclosure.
(12) Each Home Loan bears interest at a fixed interest rate. The
related Mortgage Note shall mature within not more than 30 years from the
date of origination of the Home Loan. The related Mortgage Note is payable
in substantially equal Monthly Payments, with interest payable in arrears,
and requires a Monthly Payment which is sufficient to fully amortize the
original principal balance over the original term and to pay interest at
the related interest rate. Interest on the Home Loan is calculated on the
basis of a 360-day year consisting of twelve 30-day months, and the
Mortgage Note does not provide for any extension of the original term.
(13) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage.
(14) If the related Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, or a valid
substitution of trustee has been recorded, and no extraordinary fees or
expenses are or will become payable to the trustee under the deed of trust,
except in connection with default proceedings and a trustee's sale after
default by the Obligor.
(15) There exists a Home Loan File relating to each Home Loan and such
Home Loan File contains all of the Home Loan Documents required to be
included therein as of the date hereof (as governed by the definition of
"Home Loan Documents"). Each document included in the Home Loan File which
is required to be executed by the Obligor has been executed by the Obligor
in the appropriate places. With respect to each Home Loan, the assignment
of the related Mortgage to the Indenture Trustee is in recordable form and
is acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. All blanks on any form required to be
completed have been so completed.
(16) Except in the case of not more than 2.0% of the Home Loans, all
of the Home Loans were originated either by the Seller, an affiliate of the
Seller, or by one of the Seller's correspondent lenders in accordance with
the Seller's underwriting guidelines for its Fixed Rate High LTV Loan
Program (February 1998, or more recent, edition) (the "Underwriting
Guidelines"). Except in the case of not more than 2.0% of the Home Loans,
all of the Home Loans have been underwritten or re-underwritten by the
Seller and reviewed for compliance with the Underwriting Guidelines.
(17) All Mortgaged Properties are insured by a generally acceptable
insurer against loss by fire hazards of extended coverage and such other
hazards as are customarily insured against in the area where the Mortgaged
Property is located pursuant to standard insurance policies for the area
where the Mortgaged Property is located and all such policies contain a
standard mortgagee clause naming the Seller, its successors and assigns, as
loss payee.
(18) All costs, fees and expenses incurred in originating and closing
the Home Loan and in recording the related Mortgage have been paid and the
Obligor is not entitled to any refund of any amounts paid or due to the
payee pursuant to the related Mortgage Note or the related Mortgage.
(19) There is no obligation on the part of the Seller or any other
party other than the Obligor to make payments with respect to the Home
Loan. No Home Loan contains a "buydown" or other similar provision, a
graduated payment feature, or a shared appreciation or other contingent
features.
(20) At the time of origination of the Home Loan, each related prior
lien, if any, was not 30 or more days delinquent.
(21) The related Mortgage contains an enforceable provision requiring
the consent of the mortgagee to assumption of the Home Loan upon sale of
the related Mortgaged Property.
(22) There is no homestead or other exemption available to the Obligor
which would materially interfere with the right to sell the related
Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. No relief has been requested or allowed to the Obligor under the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended.
(23) The related Home Loan File for each Home Loan contains a title
document with respect to such Home Loan reflecting that title to the
related Mortgaged Property is vested at least 50% in the Obligor under such
Home Loan.
(24) To the best of the Seller's knowledge, the related Mortgaged
Property (including each residential dwelling improvement thereon) is free
from damage which materially and adversely affects the value thereof and
there are no proceedings pending for total or partial condemnation for the
related Mortgaged Property.
(25) The Home Loan was originated in compliance with all applicable
laws and regulations and, to the Seller's knowledge, no fraud or
misrepresentation was committed by any person or entity in connection
therewith.
(26) The Home Loan has been serviced and collected in accordance with
all applicable laws and regulations and, to the Seller's knowledge, no
fraud or misrepresentation was committed by any person or entity in
connection with such servicing and collection activities.
(27) Any Home Loan originated in the State of Texas, was originated
pursuant to either Chapter 3 or Chapter 6 of the Texas Consumer Credit
Code.
(28) As of the Cut-Off Date, no Obligor is a debtor under proceedings
under the federal Bankruptcy Code, and no such Obligor has defaulted in
payments on a Home Loan after the filing of such bankruptcy case, whether
under a plan of reorganization or otherwise.
(29) The Seller has not advanced funds to make loan payments with
respect to a Home Loan, or induced, solicited, or knowingly received any
advance of loan payments, with respect to a Home Loan from any party other
than the Obligor.
(30) The Home Loan either complies with the Home Ownership and Equity
Protection Act of 1994 or is not subject to such act.
(31) As of the Cut-Off Date, to the Seller's knowledge the Mortgaged
Property is free from any and all toxic or hazardous substances, and the
Seller has no knowledge of any violation of any environmental law (either
local, state, or federal), rule, or regulation in respect of any Mortgaged
Property which violation has or could have a material adverse effect on the
market value of such Mortgaged Property.
(32) The Home Loan is not secured by a Mortgage on a non-owner
occupied Mortgaged Property.
(33) All obligations of the Seller under all debt consolidation loans,
property improvement loans, combination loans and loans for other consumer
purposes have been completed in accordance with the terms of such loans and
no additional goods or services will be, or are required to be provided by
the Seller after the Closing Date.
(34) In the event that any Home Loan was originated by an entity (such
entity, the "Originator") other than the Seller and to the extent the
Seller has failed to fulfill or is not capable of fulfilling its
obligations to cure or repurchase such Home Loan as required hereunder,
then the Note Insurer or the Indenture Trustee, on behalf of the Holders of
the Notes, may enforce any remedies for breach of representations and
warranties made by the Originator with respect to such Home Loan.
(35) To the best of the Seller's knowledge, all required inspections,
licenses and certificates with respect to home improvements and the use and
occupancy of all occupied portions of the Mortgaged Property securing a
Home Loan, if applicable, have been made, obtained or issued as applicable.
To the best of the Seller's knowledge, all improvements which were
considered in determining the appraised value of the Mortgaged Property
securing a Home Loan, if applicable, lay wholly within the boundaries and
building restriction lines of the related property and no improvements on
adjoining properties encroach upon such property and no improvement located
on or being a part of such property is in violation of any applicable
zoning laws or regulation.
(36) None of the Home Loans have been originated through a home
improvement contractor.
(37) None of the Home Loans are installment contracts for goods or
services and none of the Home Loans made for property improvement purposes
were for goods and services which constitute either "consumer credit
contracts" or "purchase money loans" as such terms are defined in 16 C.F.R.
Section 433.1
(38) None of the Mortgage Notes constitute or comprise "chattel paper"
as such term is defined in Section 9.105(b) of the Uniform Commercial Code.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF OTHER PARTIES.
(a) City Capital hereby represents and warrants to the Seller and the
Depositor as of the date of this Agreement, or as of such other date as is
specifically provided, as follows:
(i) City Capital is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware.
(ii) City Capital has the full power, authority (corporate and other),
and legal right to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and conditions of, this
Agreement.
(iii) This Agreement has been duly and validly authorized, executed,
and delivered by City Capital, and (assuming the due authorization,
execution, and delivery hereof by the Seller and the Depositor) constitutes
the valid, legal and binding agreement of City Capital, enforceable against
City Capital in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, receivership, moratorium, or other similar laws
affecting creditors' rights generally and to general principles of equity,
regardless of whether such enforcement is sought in a proceeding in equity
or at law.
(iv) No consent, approval, authorization, or order of or registration
or filing with, or notice to, any governmental authority or court is
required for the execution, delivery, and performance of, or compliance by
City Capital with, this Agreement, or the consummation by City Capital of
any other transaction contemplated hereby.
(v) Neither the execution and delivery of this Agreement by City
Capital, nor the consummation by City Capital of the transactions hereby
contemplated, nor compliance with the provisions hereof by City Capital,
will (A) conflict with or result in a breach of, or constitute a default
under, any of the provisions of City Capital's certificate of incorporation
or by-laws, or any law, governmental rule or regulation, or any judgment,
decree, or order binding on City Capital or any of its properties, or any
of the provisions of any contract or other instrument to which City Capital
is a party or by which it is bound or (B) result in the creation or
imposition of any lien, charge, or encumbrance which would have a material
adverse effect upon the Notes.
(vi) There are no actions, suits, proceedings, or investigations
pending or, to City Capital's knowledge, threatened against City Capital
that should reasonably be expected to affect adversely the execution,
delivery, performance, or enforceability of this Agreement or have a
material adverse effect on the financial condition of City Capital.
(vii) Assuming the accuracy of the representations in Section 4(a)(7),
City Capital is, and, immediately prior to the sale of the Home Loans to
the Depositor, City Capital will be, the sole owner of, and will have good,
indefeasible and marketable title to, the Home Loans, subject to no prior
lien, mortgage, security interest, pledge, charge, or other encumbrance,
except any lien to be released prior to or concurrently with the purchase
of the Home Loans by the Depositor. Following the sale of the Home Loans,
the Depositor, or the Issuer, as the Depositor's transferee, will own such
Home Loans, free and clear of any prior lien, mortgage, security interest,
pledge, charge or other encumbrance, except the lien created by the
Indenture.
(viii) City Capital has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Home Loans to the
Depositor.
(ix) City Capital will treat the transfer of the Home Loans to the
Depositor as a sale on its books and records in accordance with generally
accepted accounting principles.
(x) The consideration received by City Capital upon the sale of the
Home Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Home Loans.
(xi) City Capital is solvent and the sale of the Home Loans to the
Depositor as contemplated hereby will not cause City Capital to become
insolvent. The sale of the Home Loans to the Depositor is not undertaken
with the intent to hinder, delay or defraud any of City Capital's
creditors.
(b) The Depositor hereby represents and warrants to the Seller and City
Capital as of the date of this Agreement, or as of such other date as is
specifically provided, as follows:
(i) The Depositor is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware.
(ii) The Depositor has the full power, authority (corporate and
other), and legal right to execute and deliver, engage in the transactions
contemplated by, and perform and observe the terms and condition of, this
Agreement.
(iii) This Agreement has been duly and validly authorized, executed,
and delivered by the Depositor, and (assuming the due authorization,
execution, and delivery hereof by the Seller and City Capital) constitutes
the valid, legal and binding agreement of the Depositor, enforceable
against the Depositor in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, receivership, moratorium, or other similar laws
affecting creditors' rights generally and to general principles of equity,
regardless of whether such enforcement is sought in a proceeding in equity
or at law.
(iv) No consent, approval, authorization, or order of or registration
or filing with, or notice to, any governmental authority or court is
required for the execution, delivery, and performance of, or compliance by
the Depositor with, this Agreement, or the consummation by the Depositor of
any other transaction contemplated hereby.
(v) Neither the execution and delivery of this Agreement by the
Depositor, nor the consummation by the Depositor of the transactions hereby
contemplated, nor compliance with the provisions hereof by the Depositor,
will (A) conflict with or result in a breach of, or constitute a default
under, any of the provisions of the Depositor's certification of
incorporation or by-laws, or any law, governmental rule or regulation, or
any judgment, decree, or order binding on the Depositor or any of its
properties, or any of the provisions of any contract or other instrument to
which the Depositor is a party or by which it is bound or (B) result in the
creation or imposition of any lien, charge, or encumbrance which would have
a material adverse effect upon the Notes.
(vi) There are no actions, suits, proceedings, or investigations
pending or, to the Depositor's knowledge, threatened against the Depositor
that should reasonably be expected to affect adversely the execution,
delivery, performance, or enforceability of this Agreement or have a
material adverse effect on the financial condition of the Depositor.
SECTION 6. COVENANTS OF THE SELLER. The Seller hereby covenants to City
Capital and the Depositor as follows:
(a) On or before the Closing Date, the Seller shall execute and deliver a
Secretary's or Assistant Secretary's Certificate evidencing the Seller's
authority to enter into the transactions contemplated by this Agreement.
(b) On or before the Closing Date, the Seller shall take all steps
reasonably required of it to effect the transfer of the Home Loans to the Issuer
and the pledge of the Home Loans to the Indenture Trustee, free and clear of any
lien, charge, or encumbrance except the lien evidenced by the Indenture.
(c) The Seller shall use its best efforts to make available to counsel for
City Capital and the Depositor in executed form each of the Closing Documents
(as defined in Section 9(b) below) on or before the Closing Date, it being
understood that such documents are to be released and delivered only on the
closing of the transaction contemplated hereby and the sale of the Notes.
(d) In the event the Seller fails to take all actions necessary to effect
the conveyance of the Home Loans to City Capital on or before the Closing Date
as contemplated hereby, the Seller hereby constitutes and appoints City Capital
and its officers and representatives as the Seller's true and lawful
attorneys-in-fact to do all acts and transactions and to execute and deliver all
agreements, documents, instruments and papers by and on behalf of the Seller as
may be necessary to consummate the transfer of the Home Loans to City Capital.
The foregoing grant of authority shall be deemed to be irrevocable and a power
coupled with an interest.
(e) The Seller shall furnish to the Issuer, the Indenture Trustee and the
Note Trustee, annually on or before the date specified in Section 3.06 of the
Indenture, the opinion of counsel required to be delivered pursuant to such
Section 3.06.
SECTION 7. REPURCHASE OBLIGATIONS.
(a) Each of the representations and warranties made by the Seller herein
shall survive the Sales of the Home Loans and shall continue in full force and
effect, notwithstanding any restrictive or qualified endorsement on the Mortgage
Notes and notwithstanding subsequent termination of this Agreement, the Trust
Agreement or the Indenture. The Seller's representations and warranties shall
not be impaired by any review or examination of Home Loan Documents or other
documents evidencing or relating to the Home Loans or any failure on the part of
City Capital or the Depositor to review or examine such documents and shall
inure to the benefit of the Issuer and the Indenture Trustee (as the assignees
of the Depositor) for the benefit of the Noteholders and the Note Insurer.
(b) Upon discovery or receipt of notice by the Seller, City Capital, the
Depositor, the Custodian, the Note Insurer, or the Indenture Trustee of any
missing or materially defective document in any Home Loan File, a breach of any
of the representations and warranties of the Seller set forth in Section 4
hereof, or a default in the performance of any of the covenants or other
obligations of the Seller under this Agreement, that in any of the foregoing
cases materially and adversely affects the value of any Home Loan or the
interest therein of City Capital, the Depositor, the Issuer, the Indenture
Trustee, the Noteholders, or the Note Insurer, the party discovering or
receiving notice of the missing or materially defective document, breach, or
default shall give prompt written notice to the other parties hereto. Upon its
discovery or its receipt of notice of any such missing or materially defective
documentation or any such breach of a representation and warranty or covenant
(notwithstanding that such representation and warranty was made to the Seller's
knowledge or best knowledge), the Seller shall, within 60 days after such
discovery or receipt of such notice, either (i) cure such defect or breach in
all material respects or (ii) repurchase the affected Home Loan at the Purchase
Price therefor. The Seller shall amend the Home Loan Schedule to reflect the
withdrawal of any Home Loan from the terms of this Agreement, the Trust
Agreement, and the Indenture. Any repurchase of a Home Loan pursuant to this
Section 7(b) shall be accomplished by the delivery to the Indenture Trustee, on
(or determined as of) the last day of the calendar month in which such
repurchase is made, of the Purchase Price for such Home Loan (such delivery may
be made on or before the Deposit Date in the month following such calendar
month). Notwithstanding the foregoing, in the event that any Home Loan File
fails to include an assignment of Mortgage in favor of the Indenture Trustee, as
certified by the Custodian in the Interim Certification, then the Seller shall
immediately repurchase the related Home Loan at the Purchase Price therefor
(unless such repurchase obligation is waived in writing by the Note Insurer).
(c) It is understood and agreed that the obligations of the Seller set
forth in this Section 7 to cure or repurchase a Home Loan and to indemnify City
Capital and the Depositor as provided in Section 8 of this Agreement constitute
the sole remedies of City Capital, the Depositor, the Issuer, and the Indenture
Trustee against the Seller with respect to a missing or materially defective
document in any Home Loan File, a breach of representations and warranties of
the Seller set forth in Section 4 hereof, or a default in the performance by the
Seller of any of its covenants or other obligations under this Agreement.
(d) Any party providing a notice under this Section 7 shall provide a copy
of such notice to the Master Servicer and the Seller shall furnish a copy of
each revised Home Loan Schedule to the Master Servicer and the Indenture Trustee
at their addresses for notices set forth in Section 8.03 of the Servicing
Agreement.
SECTION 8. INDEMNIFICATION.
(a) In the event the Seller breaches its representations, warranties,
covenants, or obligations set forth herein, the Seller shall indemnify and hold
harmless each of City Capital and the Depositor (and its assignees in accordance
with Section 17 hereof) (the "Indemnified Parties") from and against any losses,
damages, penalties, fines, forfeitures, 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, such breach. Promptly
after receipt by an Indemnified Party of notice of the commencement of any such
action, such Indemnified Party will notify the Seller in writing of the
commencement thereof if a claim in respect of such action is to be made against
the Seller under this Section 8, but the omission so to notify the Seller will
not relieve the Seller from any liability hereunder unless such omission
materially prejudices the rights or positions of the Seller. If any such action
is brought against an Indemnified Party, and it notifies the Seller of the
commencement thereof, the Seller will be entitled to participate therein, and to
assume the defense thereof, with counsel selected by the Seller and reasonably
satisfactory to such Indemnified Party, and after notice from the Seller to the
Indemnified Party of its election so to assume the defense thereof, the Seller
will not be liable to the Indemnified Party under this Section 8 for any legal
or other expenses subsequently incurred by such Indemnified Party in connection
with the defense of such action; provided, however, that this right to assume
the defense of such action shall not be in effect if (1) the Seller shall not
have employed counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after notice of
commencement of the action or (2) the Seller shall have authorized the
employment of counsel for the Indemnified Party at the expense of the Seller. If
the Seller assumes the defense of any such proceeding, it shall be entitled to
settle such proceeding with the consent of any Indemnified Party that is also
subject to such proceeding or, if such settlement provides for release of any
such Indemnified Party in connection with all matters relating to the proceeding
which have been asserted against such Indemnified Party in such proceeding by
the other parties to such settlement, without the consent of such Indemnified
Party.
(b) The Seller shall, from its own funds, pay or reimburse the Indenture
Trustee upon its request, for all reasonable expenses and disbursements incurred
or made by the Indenture Trustee in accordance with any of the provisions of the
Servicing Agreement, the Indenture, the Custodial Agreement, and (in its
capacity as Trust Paying Agent) the Deposit Trust Agreement (including any
Opinions of Counsel requested by the Indenture Trustee) except any such expense
or disbursement as may arise from its negligence or bad faith or that is
otherwise reimbursed to the Indenture Trustee, provided, however, that the
Indenture Trustee shall not refuse to perform any of its duties under the
Indenture, the Servicing Agreement, or the Deposit Trust Agreement solely as a
result of the failure of the Seller to pay or reimburse such expenses or
disbursements.
(c) The Seller agrees to indemnify the Indenture Trustee, the Note
Administrator, the Trust Paying Agent, the Master Servicer, the Custodian and
their respective agents, directors, employees, and officers (each a "Transaction
Indemnified Party") from, and hold it harmless against, any and all losses and
liabilities, damages, claims, or expenses (including reasonable attorneys' fees,
expenses, and disbursements), incurred or in connection with any legal action
against the Trust Estate, the Issuer, or any Transaction Indemnified Party,
other than any loss, liability, or expense incurred by reason of the negligence,
bad faith, or intentional misconduct of the party seeking indemnification.
Notwithstanding the generality of the foregoing, if any action, suit, or other
proceeding is brought against a Transaction Indemnified Party for which the
Transaction Indemnified Party seeks indemnification under this Section 8(c), the
Transaction Indemnified Party shall promptly notify the Seller of the
commencement thereof, whereupon the Seller will be entitled to participate
therein, and to assume the defense thereof, with counsel selected by the Seller
and reasonably satisfactory to such Transaction Indemnified Party, provided,
that, if in the Transaction Indemnified Party's reasonable judgment the
Transaction Indemnified Party has any claims or defenses that conflict with or
differ from the interests of the Seller, the Transaction Indemnified Party shall
be entitled to select counsel of its choosing and pursue such claims and
defenses separately and all related costs, expenses, and liabilities associated
with such separate claims or defenses will continue to be covered by the
Seller's indemnification obligation under this Section 8(c). The Seller shall
not be entitled to settle any proceeding without the consent of any Transaction
Indemnified Party with any right of indemnification under this Section 8(c) with
respect to such proceeding except upon such terms as will provide each such
Transaction Indemnified Party reasonable assurance of full indemnity under this
Section 8(c).
SECTION 9. CONDITIONS TO OBLIGATIONS TO PURCHASE. The obligation of each of
City Capital and the Depositor hereunder to purchase the Home Loans is subject
to the following conditions:
(a) The accuracy in all material respects of all of the representations and
warranties of the Seller under this Agreement and the non-occurrence of any
event which, with notice or the passage of time, would constitute a default
under this Agreement;
(b) Each of City Capital and the Depositor shall have received, or their
respective attorneys shall have received, in escrow (to be released from escrow
at the time of closing), the following documents (collectively, the "Closing
Documents") in such forms as are acceptable to City Capital and the Depositor,
duly executed by all signatories other than the recipient as required pursuant
to the respective terms thereof:
(i) A Xxxx of Sale substantially in the form of Exhibit A hereto;
(ii) An opinion of counsel for the Seller as to various corporate
matters and such other opinions of counsel as are necessary in order to
obtain the ratings set forth in Section 9(f) below, each of which also
shall be acceptable to Xxxxx'x Investors Service, Inc. ("Moody's") and
Standard & Poor's Ratings Services, a Division of The XxXxxx-Xxxx
Companies, Inc. ("S&P" and together with Moody's, the "Rating Agencies")
(it being understood that such opinions shall expressly provide that the
Indenture Trustee shall be entitled to rely on such opinions of counsel);
and
(iii) From Ernst & Young LLP, certified public accountants, comfort
letters as required by the Underwriting Agreement;
(c) The Seller shall have delivered to the Indenture Trustee or the
Custodian on its behalf, in escrow, all documents required to be delivered
hereunder and shall have released its interest therein to City Capital or its
designee and City Capital shall have released its interest in such documents to
the Depositor;
(d) Compliance by the Seller with all other terms and conditions of this
Agreement;
(e) The sale of the Notes pursuant to the terms of the Underwriting
Agreement; and
(f) The receipt of written confirmation from Moody's and S&P that they have
assigned ratings of "Aaa" and "AAA" to the Class A Notes, respectively.
SECTION 10. FEES AND DEPOSITS. City Capital shall be responsible for
payment of (1) all fees and expenses of accountants, printers, the Note Insurer,
the Owner Trustee, the Custodian, the Master Servicer, and the Indenture Trustee
in connection with the issuance of the Notes, including the fees of their
respective attorneys, including such fees and expenses associated with loan file
due diligence review, (2) the fees incurred by the Seller in connection with the
sale of the Home Loans to City Capital for attorneys and accountants, and (3)
the fees and expenses payable to the Rating Agencies for their initial ratings
of the Notes, including the fees of their respective attorneys. In addition,
City Capital shall pay the fees and expenses of its attorneys and accountants in
connection with the issuance of the Notes.
SECTION 11. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST. The Sales and
delivery on the Closing Date of the Home Loans described in the Home Loan
Schedule are mandatory, it being specifically understood and agreed that each
Home Loan is unique and identifiable on the Closing Date and that an award of
money damages would be insufficient to compensate City Capital and the Depositor
for the losses and damages that would be incurred by them in the event of the
Seller's failure to deliver the Home Loans on or before the Closing Date. The
Seller hereby grants to City Capital, and City Capital hereby assigns such
grants to the Depositor, a first lien on and a continuing first priority
security interest in each Home Loan and each document and instrument evidencing
each Home Loan to secure the performance by the Seller of its obligation to
deliver such Home Loans hereunder. All rights and remedies of City Capital and
the Depositor under this Agreement are distinct from, and cumulative with, any
other rights or remedies under this Agreement or afforded by law or equity, and
all such rights and remedies may be exercised concurrently, independently, or
successively.
SECTION 12. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given when personally
delivered, or five days after being mailed by registered mail, postage prepaid,
or upon transmission if transmitted by telecopier, telex, or telegraph and
confirmed by a similar mailed writing, provided the transmitting machine has
printed an electronic confirmation of delivery, to the following:
a. If to City Capital:
City Capital Markets Corporation
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telecopy: (000) 000-0000
with a copy, given in the manner
prescribed above, to:
Xxxxx X. Xxxxxxx, Esq.
Hunton & Xxxxxxxx
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
b. If to the Seller:
City National Bank of West Virginia
c/o City Holding Company
00 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
with a copy, given in the manner
prescribed above, to:
Xxxxx X. Xxxxxxx, Esq.
Hunton & Xxxxxxxx
Riverfront Plaza, East Tower
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Telecopy: (000) 000-0000
c. If to the Depositor:
Financial Asset Securities Corp.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy:
Attention:
d. If to the Note Insurer:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx. Xxx Xxxx 00000
Attention: Asset-Backed IPM
(City Capital Home Loan Trust 1998-4)
Telecopy: (000) 000-0000
Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 12 for the giving of notice.
SECTION 13. SEVERABILITY OF PROVISIONS. Any part, provision,
representation, warranty, or covenant contained in this Agreement that is
prohibited or unenforceable or that is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Home Loan shall not invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by applicable
law, the parties hereto waive any provision of law that prohibits or renders
void or unenforceable any provision hereof.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING
ANY NEW YORK OR OTHER CONFLICT OF LAWS PROVISION TO THE CONTRARY.
SECTION 15. FURTHER ASSURANCES. Each party agrees to execute and deliver
such instruments and take such actions as each other party, the Issuer, or the
Indenture Trustee may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement including,
without limitation, the execution and filing of any UCC financing statements to
evidence the interests of City Capital, the Depositor, and any of its
transferees in the Home Loans and other assets pledged to the Indenture Trustee.
SECTION 16. SURVIVAL. The Seller agrees that the representations,
warranties and agreements made by it herein and in any certificate or other
instrument delivered pursuant hereto shall be deemed to have been relied upon by
City Capital and the Depositor, notwithstanding any investigation heretofore or
hereafter made by or on behalf of City Capital or the Depositor, and that the
representations, warranties and agreements made by the Seller herein or in any
such certificate or other instrument shall survive the delivery of and payment
for the Home Loans.
SECTION 17. ASSIGNMENT; THIRD PARTY BENEFICIARIES. The Seller hereby
acknowledges that the Depositor will assign all its rights hereunder to the
Issuer, which will in turn pledge all of the rights hereunder to the Indenture
Trustee. The Seller agrees that, upon the execution of the Indenture, the
Indenture Trustee will have all such rights and remedies provided to the
Depositor hereunder and this Agreement will inure to the benefit of the
Indenture Trustee for the benefit of the Noteholders and the Note Insurer.
The Indenture Trustee shall constitute not only an assignee of the
Depositor's rights in accordance with this Section 17 but also an intended
third-party beneficiary of this Agreement to the extent necessary to enforce
such rights and to obtain the benefit of such remedies and the benefit of
Sections 8(b) and (c) and Section 10, and this Agreement shall be binding upon
the Indenture Trustee. The Note Insurer is an intended third-party beneficiary
of this Agreement, and this Agreement shall be binding upon and inure to the
benefit of the Note Insurer; provided, that, notwithstanding the foregoing, for
so long as a Note Insurer Default is continuing with respect to its obligations
under the Note Insurance Policy, the Noteholders shall succeed to the Note
Insurer's rights hereunder. Without limiting the generality of the foregoing,
all covenants and agreements in this Agreement that expressly confer rights upon
the Note Insurer shall be for the benefit of and run directly to the Note
Insurer, and the Note Insurer shall be entitled to rely on and enforce such
covenants to the same extent as if it were a party to this Agreement. The Master
Servicer, the Note Administrator and the Trust Paying Agent are intended
third-party beneficiaries of Section 8(c) of this Agreement, and Section 8(c) of
this Agreement shall be binding upon such parties. The Custodian is an intended
third-party beneficiary of Sections 3(e) and 8(c) of this Agreement, and
Sections 3(e) and 8(c) shall be binding upon the Custodian.
SECTION 18. MISCELLANEOUS.
(a) This Agreement may be executed in two or more counterparts, each of
which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective successors and assigns.
(b) Any person into which the Seller may be merged or consolidated or any
person resulting from a merger or consolidation involving the Seller or any
person succeeding to the business of the Seller shall be considered the
successor of the Seller hereunder, without the further act or consent of either
party hereto. Except as provided above, this Agreement cannot be assigned,
pledged or hypothecated by any party without the written consent of each other
party to this Agreement.
(c) This Agreement supersedes all prior agreements and understandings
between the parties hereto relating to the subject matter hereof. Neither this
Agreement nor any term hereof may be changed, waived, discharged, or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge, or termination is sought. The
headings in this Agreement are for purposes of reference only and shall not
limit or otherwise affect the meaning of the provisions of this Agreement.
(d) City Capital and the Depositor shall cause the Custodian to as promptly
as possible deliver the Home Loans and all related Home Loan Documents to the
Seller or the Seller's designee and any security interest created by Section 11
hereof shall be deemed to have been released if, on the Closing Date, each of
the conditions set forth in Section 9 hereof shall not have been satisfied or
waived.
(e) It is the express intent of the parties hereto that each of the Sales
of the Home Loans as contemplated by this Agreement be construed as a sale of
the Home Loans and not as a financing. It is, further, not the intention of the
parties that such conveyance be deemed a pledge of the Home Loans by the Seller
to City Capital, or by City Capital to the Depositor or any assignee of the
Depositor, including, but not limited to, the Indenture Trustee, to secure a
debt or other obligation of any party hereto. However, in the event that,
notwithstanding the intent of the parties hereto, the Home Loans are held to be
property of the Seller, then (i) this Agreement shall also be deemed to be a
security agreement among the Seller, as debtor, City Capital, as secured party,
and the Depositor, as assignee of the secured party, within the meaning of
Article 9 of the New York Uniform Commercial Code; and (ii) the sale to City
Capital provided for herein shall be deemed to be a grant by the Seller to City
Capital of a first priority security interest in all of the Seller's right,
title and interest in and to the Home Loans and all amounts payable to the
holder of the Home Loans in accordance with the terms thereof and all proceeds
thereof, and City Capital shall be deemed to have assigned all of such interests
to the Depositor. In the event that, notwithstanding the intent of the parties
hereto, the Home Loans are held to be property of City Capital, then (i) this
Agreement shall be deemed to be a security agreement between City Capital, as
debtor, and the Depositor, as secured party, within the meaning of Article 9 of
the New York Uniform Commercial Code; and (ii) the sale to the Depositor
provided for herein shall be deemed to be a grant by City Capital to the
Depositor of a first priority security interest in all of City Capital's right,
title and interest in and to the Home Loans and all amounts payable to the
holder of the Home Loans in accordance with the terms thereof and all proceeds
thereof. Notwithstanding the foregoing, City Capital shall not treat the Sale of
the Home Loans to the Depositor hereunder as a sale of the Home Loans for
federal income tax purposes. The Seller, City Capital and the Depositor shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Home Loans by the Seller or City Capital or both such parties,
such security interest or interests would be deemed to be a perfected security
interest or interests of first priority under applicable law and would be
maintained as such throughout the terms of this Agreement and the Indenture.
IN WITNESS WHEREOF, the parties have caused this Home Loan Sale Agreement
to be executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
CITY NATIONAL BANK OF WEST VIRGINIA
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Chief Financial Officer
-----------------------------
CITY CAPITAL MARKETS CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
------------------------------
Title: /s/ Vice President
-----------------------------
FINANCIAL ASSET SECURITIES CORP.
By: /s/ Xxxx Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxx Xxxxxx
------------------------------
Title: Vice President
-----------------------------
FOR THE LIMITED PURPOSE OF ACKNOWLEDGING THEIR RESPECTIVE OBLIGATIONS UNDER
SECTIONS 3 AND 7 HEREOF:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, AS INDENTURE TRUSTEE AND
CUSTODIAN
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------
Title: Assistant Vice President
-------------------------------
SCHEDULE I
THE HOME LOANS
EXHIBIT A TO THE HOME LOAN SALE AGREEMENT
XXXX OF SALE
XXXX OF SALE, made as of the 30th day of November, 1998, by City National
Bank of West Virginia, a national bank (the "Seller"), and City Capital Markets
Corporation, a Delaware corporation ("City Capital"), to Financial Asset
Securities Corp., a Delaware corporation (the "Depositor").
WHEREAS, the Seller, City Capital and the Depositor are parties to that
certain Home Loan Sale Agreement, dated as of November 1, 1998, with respect to
the sale by the Seller to City Capital, and the simultaneous sale by City
Capital to the Depositor, of the Home Loans (the "Sales Agreement");
WHEREAS, simultaneously with the sale of the Home Loans by City Capital to
the Depositor, the Depositor intends to transfer the Home Loans and certain
related assets to City Capital Home Loan Trust 1998-4 (the "Issuer"), and the
Issuer intends in turn to simultaneously pledge the Home Loans and certain
related assets to Norwest Bank Minnesota, National Association, as trustee (the
"Indenture Trustee") pursuant to an Indenture (the "Indenture"), dated as of
November 1, 1998, among the Issuer, and Norwest Bank Minnesota, National
Association, as Indenture Trustee, Note Administrator and Custodian.
NOW THEREFORE, for and in consideration of the consideration set forth in
the Sales Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Seller does hereby bargain,
sell, convey, assign and transfer to City Capital, and simultaneously herewith,
City Capital does hereby bargain, sell, convey, assign, and transfer to the
Depositor, without recourse, free and clear of any liens, claims, or other
encumbrances, all of the respective rights, title, and interests of the Seller
and City Capital, respectively, in and to each of the Home Loans identified on
Schedule I to the Indenture, together with the Home Loan Documents and other
documents maintained as part of the related Home Loan Files, all Mortgaged
Properties which secure a Home Loan but are acquired by repossession,
foreclosure, or deed in lieu of foreclosure after the Cut-off Date, and all
payments of principal and interest received on the Home Loans on and after the
Cut-off Date, and all other unscheduled collections collected in respect of the
Home Loans on and after the Cut-off Date, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing.
The Seller hereby acknowledges receipt from City Capital of the Pool
Purchase Price referred to in Section 2 of the Sales Agreement.
Nothing in this Xxxx of Sale shall be construed to be a modification of, or
limitation on, any provision of the Sales Agreement, including the
representations, warranties, and agreements set forth therein.
Unless otherwise defined herein, capitalized terms used in this Xxxx of
Sale shall have the meanings assigned to them in the Sales Agreement, or if not
assigned in the Sales Agreement, the Indenture.
IN WITNESS WHEREOF, the Seller and City Capital each has caused this Xxxx
of Sale to be executed and delivered by its respective officer thereunto duly
authorized as of the date first above written.
CITY NATIONAL BANK OF WEST VIRGINIA
By:_______________________________
Name:_____________________________
Title:____________________________
CITY CAPITAL MARKETS CORPORATION
By:_______________________________
Name:_____________________________
Title:____________________________
EXHIBIT B
DEFINED TERMS
"HOME LOAN FILE": As to each Home Loan, a file containing all of the
related Home Loan Documents.
"HOME LOAN": Any of the Home Loans identified on the Home Loan Schedule.
"HOME LOAN DOCUMENTS": With respect to each Home Loan, the following
documents:
(a) The original Mortgage Note bearing all intervening endorsements,
endorsed as provided in Section 3 of the Agreement, and signed in the name of
the last endorsee (the "Last Endorsee") by an authorized Person (in the event
that the Home Loan was acquired by the Last Endorsee in a merger, the signature
must be in the following form: "[Last Endorsee], successor by merger to [name of
predecessor]"; in the event that the Home Loan was acquired or originated by the
Last Endorsee while doing business under another name, the signature must be in
the following form" "[Last Endorsee], [formerly known as] or [doing business as]
[previous name]").
(b) The original of the guarantee executed in connection with the Mortgage
Note (if any).
(c) The original Mortgage with evidence of recording thereon, or a copy
thereof together with an officer's certificate of the Seller or of the title
company, escrow company, or attorney that closed the related Home Loan (the
"Settlement Agent") certifying that such represents a true and correct copy of
the original and that such original has been submitted for recordation in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located.
(d) The originals of all assumption, modification, consolidation, or
extension agreements (if any) with evidence of recording thereon, or copies
thereof together with an officer's certificate of the Seller or the Settlement
Agent certifying that such represent true and correct copies of the originals
and that such originals have each been submitted for recordation in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located.
(e) The original Assignment of Mortgage for each Home Loan, as provided in
Section 3 of the Agreement, in form and substance acceptable for recording and
signed in the name of the Last Endorsee (in the event that the Home Loan was
acquired by the Last Endorsee in a merger, the signature must be in the
following form: "[Last Endorsee], successor by merger to [name of predecessor]";
in the event that the Home Loan was acquired or originated while doing business
under another name, the signature must be in the following form: "[Last
Endorsee], [formerly known as] or [doing business as] [previous name]").
(f) The originals of all intervening assignments of mortgage (if any) with
evidence of recording thereon, or copies thereof together with an officer's
certificate of the Seller or the Settlement Agent certifying that such represent
true and correct copies of the originals and that such originals have been
submitted for recordation in the appropriate governmental recording office of
the jurisdiction where the Mortgaged Property is located.
"MORTGAGE": With respect to a Home Loan, the mortgage, deed of trust, deed
to secure debt, or other instrument securing the related Mortgage Note which
creates a valid and enforceable lien on or ownership interest in the related
Mortgaged Property.
"MORTGAGE NOTE": With respect to a Home Loan, the note or other evidence of
the indebtedness secured by the related Mortgage.
"MORTGAGED PROPERTY": With respect to a Home Loan, the real property,
together with the improvements thereon, subject to the lien of the related
Mortgage.
"OBLIGOR": With respect to any Home Loan, the obligor(s) on the related
Mortgage Note and mortgagor(s) on the related Mortgage.
"PRINCIPAL PREPAYMENT": Any mortgagor payment or other recovery in respect
of principal on a Home Loan (including Net Liquidation Proceeds (as defined in
the Indenture)) which, in the case of a mortgagor payment, is received in
advance of its scheduled due date and is not accompanied by an amount as to
interest representing scheduled interest for any month subsequent to the month
of such payment, or that was accompanied by instructions from the related
mortgagor directing the Servicer to apply such payment to the Principal Balance
of such Home Loan currently.
"SERVICER": The Seller, or any successor thereto, in its capacity as
servicer under the Servicing Agreement.
"SERVICING AGREEMENT": The Servicing Agreement, dated as of November 1,
1998, among City Capital Home Loan Trust 1998-4, as Issuer, City National, as
Servicer, and Norwest Bank Minnesota, National Association, as Master Servicer
and Indenture Trustee.
