EXHIBIT 4.3
EXECUTION COPY
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MORTGAGE LOAN SALE AGREEMENT
IHE FUNDING CORP. II
PURCHASER
and
XXXXX UNION BANK AND TRUST COMPANY
SELLER
DATED AS OF August 31, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..............................................2
Section 1.01 Definitions..............................................2
ARTICLE II PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS..........2
Section 2.01 Agreement to Purchase....................................2
Section 2.02 Purchase Price...........................................3
Section 2.03 Conveyance of Mortgage Loans; Possession of Mortgage.....3
Section 2.04 Delivery of Mortgage Loan Documents......................4
Section 2.05 Acceptance of Mortgage Loans.............................5
Section 2.06 Transfer of Mortgage Loans; Assignment of Agreement......6
Section 2.07 Examination of Mortgage..................................7
Section 2.08 Books and Records........................................7
Section 2.09 Cost of Delivery and Recordation of Documents............7
ARTICLE III REPRESENTATIONS AND WARRANTIES...........................7
Section 3.01 Representations and Warranties as to the Seller..........7
Section 3.02 Representations and Warranties Relating to the
Mortgage Loans...........................................9
Section 3.03 Representations and Warranties of the Purchaser.........12
Section 3.04 Repurchase Obligation for Defective Documentation
and for Breach of a Representation or Warranty..........13
ARTICLE IV THE SELLER..............................................15
Section 4.01 Covenants of the Seller.................................15
Section 4.02 Merger or Consolidation.................................15
Section 4.03 Indemnification.........................................15
ARTICLE V CONDITIONS OF CLOSING...................................15
Section 5.01 Conditions of Purchaser's Obligations...................15
Section 5.02 Conditions of Seller's Obligations......................16
Section 5.03 Termination of Purchaser's Obligations..................16
ARTICLE VI MISCELLANEOUS...........................................17
Section 6.01 Notices.................................................17
Section 6.02 Severability of Provisions..............................17
Section 6.03 Agreement of Seller.....................................17
Section 6.04 Survival................................................17
Section 6.05 Effect of Headings and Table of Contents................18
Section 6.06 Successors and Assigns..................................18
Section 6.07 Confirmation of Intent; Grant of Security Interest......18
Section 6.08 Miscellaneous...........................................18
Section 6.09 Amendments..............................................18
Section 6.10 Third Party Beneficiaries...............................19
Section 6.11 GOVERNING LAW...........................................19
Section 6.12 Execution in Counterparts...............................19
This Mortgage Loan Sale Agreement, dated as of August 31, 2001, by and
between IHE Funding Corp. II, a Delaware corporation, its successors and assigns
(the "Purchaser"), and Xxxxx Union Bank and Trust Company, an Indiana banking
corporation and its successors (the "Seller").
W I T N E S S E T H:
WHEREAS, Exhibit A attached hereto and made a part hereof, as such
Exhibit A may be amended from time to time to reflect additions and deletions,
lists certain mortgage loans secured by first or more junior mortgages on one-
to four-family residential properties owned by the Seller that the Seller
desires to sell to the Purchaser and that the Purchaser desires to purchase;
WHEREAS, it is the intention of the Seller and the Purchaser that
simultaneously with the Seller's conveyance of the Mortgage Loans (as defined
herein) to the Purchaser on the Closing Date, (a) the Purchaser shall sell the
Mortgage Loans to Bear Xxxxxxx Asset Backed Securities, Inc. (the "Depositor")
pursuant to a Purchase and Sale Agreement dated as of August 31, 2001 (the
"Purchase and Sale Agreement"), (b) the Depositor shall sell the Mortgage Loans
to a Delaware business trust, Xxxxx Home Equity Loan Trust 2001-2 (the "Issuer"
or the "Trust") pursuant to a Sale and Servicing Agreement to be dated as of
August 31, 2001 (the "Sale and Servicing Agreement"), to be entered into by and
among the Depositor, as depositor, Purchaser, as seller, Xxxxx Union Bank and
Trust Company, as master servicer (in such capacity, the "Master Servicer"), the
Trust and Xxxxx Fargo Bank, Minnesota, National Association as indenture trustee
(the "Indenture Trustee") and (c) the Issuer shall pledge the Mortgage Loans to
the Indenture Trustee to secure repayments of Notes pursuant to an Indenture
between the Trust and the Indenture Trustee dated as of August 31, 2001.
WHEREAS, as a matter of convenience and in light of the ultimate
transfer of the Mortgage Notes, Loan Agreements and the Mortgages securing the
obligations of each Mortgagor under the related Mortgage Notes or Loan
Agreements, as applicable, to the Indenture Trustee, the Seller has caused the
Mortgage Notes and Loan Agreements to be endorsed in a manner suitable for the
delivery to the Indenture Trustee and has caused the assignment of the Mortgage
Loans to be made either in blank or directly to the Indenture Trustee, without
providing or indicating on any endorsement of the Mortgage Notes and Loan
Agreements or assignment of the Mortgage Loans the respective interim endorsees
or interim assignees, it being understood that the Indenture Trustee shall hold
the Mortgage Notes and Loan Agreements as bailee for the Purchaser until the
Purchaser transfers the Mortgage Notes and Loan Agreements to the Depositor
pursuant to the Purchase and Sale Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used herein, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article. Capitalized terms used herein and not otherwise
defined shall have the respective meanings ascribed thereto in the Indenture.
"AGREEMENT" means this Mortgage Loan Sale Agreement, as amended or
supplemented in accordance with the provisions hereof.
"CLOSING DATE" shall have the meaning ascribed thereto in Section
2.01(c) hereof.
"CUT-OFF DATE AGGREGATE PRINCIPAL BALANCE" means the aggregate unpaid
principal balance of the Mortgage Loans as of the Cut-Off Date. The Cut-Off Date
Aggregate Principal Balance of the Initial Mortgage Loans is $448,861,417.43.
"CUT-OFF DATE PRINCIPAL BALANCE" means as to each Mortgage Loan, its
unpaid Principal Balance as of the Cut-Off Date.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"PURCHASE AND SALE AGREEMENT" shall have the meaning ascribed thereto
in the recitals hereof.
"SALE AND SERVICING AGREEMENT" shall have the meaning ascribed thereto
in the recitals hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" means Xxxxx Union Bank and Trust Company, in its capacity as
Seller of the Mortgage Loans under this Agreement and any successor to Xxxxx
Union Bank and Trust Company, whether through merger, consolidation, purchase
and assumption of Xxxxx Union Bank and Trust Company or all or substantially all
of its assets or otherwise.
"MASTER SERVICER" means Xxxxx Union Bank and Trust Company, in its
capacity as servicer of the Mortgage Loans and as the Master Servicer under the
Sale and Servicing Agreement, or any successor appointed pursuant to the Sale
and Servicing Agreement.
ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Agreement to Purchase. (a) Subject to the terms and
conditions of this Agreement, the Seller hereby sells, transfers, conveys, and
assigns and the Purchaser hereby purchases the Mortgage Loans.
(b) Subject to Section 2.07, the Purchaser and the Seller have agreed
upon which of the Seller's Mortgage Loans are purchased by the Purchaser
pursuant to this Agreement, and the Seller has prepared a Mortgage Loan
Schedule. The Mortgage Loan Schedule is attached hereto as Exhibit A.
(c) The closing for the purchase and sale of the Mortgage Loans shall
take place at the offices of Stroock & Stroock & Xxxxx LLP, New York at 10:00
a.m., New York time, on September 28, 2001 or such other place and time as the
parties shall agree (such time being herein referred to as the "Closing Date").
Section 2.02. PURCHASE PRICE. On the Closing Date, as full consideration
for the Seller's sale of the Initial Mortgage Loans to the Purchaser, the
Purchaser will deliver to the Seller an amount in cash equal to $473,078,000.00
payable in immediately available funds.
Section 2.03. CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE. (a)
Effective as of the Closing Date, the Seller hereby sells, transfers, assigns,
sets over and conveys to the Purchaser, without recourse but subject to the
terms of this Agreement, all right, title and interest in and to the Mortgage
Loans, the insurance policies relating to each such Mortgage Loan, if any, and
all right, title and interest in and to the proceeds of such insurance policies
from and after the Closing Date.
(b) Upon the sale of such Mortgage Loans, the ownership of each
related Mortgage Note or Loan Agreement, each related Mortgage and the contents
of the related Mortgage File shall immediately vest in the Purchaser and the
ownership of all related records and documents with respect to each Mortgage
Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser. The contents of any Mortgage File in the
possession of the Seller at any time after such sale, and any scheduled payments
of principal and interest on the Mortgage Loans due after the Cut-Off Date and
received by the Seller (excluding interest accruing on or prior to the Cut-Off
Date, which shall be retained by the Seller), shall be held in trust by the
Seller for the benefit of the Purchaser as the owner thereof, and shall be
promptly delivered by the Seller to or upon the order of the Purchaser.
(c) Pursuant to the Purchase and Sale Agreement, the Purchaser will,
on the Closing Date, irrevocably sell, transfer, set over, convey and assign all
of its right, title and interest in and to the Mortgage Loans to the Depositor.
(d) Pursuant to the Sale and Servicing Agreement, the Depositor will,
on the Closing Date, irrevocably transfer, assign, set over and otherwise convey
all of its right, title and interest in and to the applicable Mortgage Loans and
all of its rights (exclusive of its obligations) under the Purchase and Sale
Agreement and this Agreement to the Issuer for the benefit of the
Certificateholders and the Noteholders.
(e) Pursuant to the Indenture, the Issuer will, on the Closing Date,
pledge all of its right, title and interest in and to the applicable Mortgage
Loans and all of its rights (exclusive of its obligations) under the Sale and
Servicing Agreement to the Indenture Trustee for the benefit of the Noteholders.
Section 2.04. DELIVERY OF MORTGAGE LOAN DOCUMENTS. (a) On or prior to the
Closing Date or Subsequent Transfer Date, as applicable (with respect to (i)
below), or within 120 days of the Closing Date or Subsequent Transfer Date, as
applicable (with respect to (ii) through (v) below) the Seller shall deliver to
and deposit with the Indenture Trustee each of the following documents for each
Mortgage Loan:
(i) the original Mortgage Note or Loan Agreement, endorsed by the
holder of record without recourse in the following form: "Pay to the
order of ____________, without recourse" and signed in the name of the
holder of record, and if by the Seller, by an authorized officer;
(ii) the original Mortgage with evidence of recording indicated
thereon; provided, that if such Mortgage has not been returned from
the applicable recording office, then such recorded Mortgage shall be
delivered when so returned;
(iii) an assignment of the original Mortgage, in suitable form
for recordation in the jurisdiction in which the related Mortgaged
Property is located, in the name of the holder of record of the
Mortgage Loan by an authorized officer (with evidence of submission
for recordation of such assignment in the appropriate real estate
recording office for any such Mortgaged Property located in Florida to
be received by the Indenture Trustee within 120 days of the Closing
Date or Subsequent Transfer Date, as applicable).Except as provided in
the immediately following sentence no assignments of mortgages shall
be required to be submitted for recording with respect to any Mortgage
Loan unless the related Mortgaged Property is located in Florida. Any
assignment not submitted for recordation shall be recorded upon the
earlier to occur of (i) the occurrence of any Event of Default, as
such term is defined in the Indenture, or (ii) a bankruptcy or
insolvency proceeding involving the Mortgagor is initiated or
foreclosure proceedings are initiated against the Mortgaged Property
as a consequence of an event of default under the Mortgage Loan);
provided, however, that if the related Mortgage has not been returned
from the applicable recording office, then such assignment shall be
delivered when so returned (and a blanket assignment with respect to
such unrecorded Mortgage Loan shall be delivered on the Closing Date
or Subsequent Transfer Date, as applicable);
(iv) any recorded intervening assignments of the Mortgage with
evidence of recording thereon; and
(v) any assumption, modification, consolidation or extension
agreements.
(b) In the event that any such Assignment of Mortgage referred to in
clause (a)(iii) above is not in a suitable form for recording or is lost or,
upon an attempt to record such Assignment of Mortgage, is returned unrecorded
because of a defect therein, the Seller shall promptly prepare a substitute
Assignment of Mortgage or cure such defect, as the case may be.
(c) The Seller shall, on the 15th day of each calendar month deliver
or cause to be delivered to the Indenture Trustee or its designee such of it as
has been received (in any event, no later than 120 days after the Closing Date
or Subsequent Transfer Date, as applicable): (i) the original recorded mortgage
and related power of attorney, if any, in those instances where a copy thereof
certified by the Seller was delivered to the Purchaser; and (ii) the original
Assignment of Mortgage from the Seller to the Purchaser (or at the direction of
the Purchaser, to the Indenture Trustee) delivered pursuant to the foregoing
clause (a)(iii) above, which, together with any intervening assignments of
Mortgage, evidences a complete chain of assignment from the originator of the
Mortgage Loan to the Indenture Trustee in those instances where copies of such
Assignments certified by the Seller were delivered to the Indenture Trustee.
Notwithstanding anything to the contrary contained in this Section 2.04, in
those instances where the public recording office retains the original Mortgage,
power of attorney, if any, assignment or Assignment of Mortgage after it has
been recorded or such original has been returned by the recording office but has
not yet arrived at the Seller, or it has been lost by the recording office, the
Seller shall be deemed to have satisfied its obligations hereunder upon delivery
to the Purchaser of a copy of such Mortgage, power of attorney, if any,
assignment or Assignment of Mortgage certified by the public recording office to
be a true copy of the recorded original thereof. From time to time the Seller
may forward or cause to be forwarded to the Purchaser additional original
documents evidencing an assumption or modification of a Mortgage Loan.
(d) All original documents relating to the Mortgage Loans that are not
delivered to the Purchaser as permitted by this Section 2.04 are and shall be
held by the Seller in trust for the benefit of the Purchaser or its assignee, or
the assignees of its assignee. In the event that any such original document is
required pursuant to the terms of this Section 2.04 to be a part of a Mortgage
File, such document shall be delivered promptly to, or upon the instruction of,
the Purchaser. From and after the sale of the Mortgage Loans to the Purchaser
pursuant hereto, to the extent that the seller retains legal title of record to
any Mortgage Loans prior to the vesting of legal title in the Purchaser, and,
pursuant to the Purchase and Sale Agreement, thereafter in the Issuer (as
assignee of the Depositor pursuant to the Sale and Servicing Agreement), such
title shall be retained in trust for the Purchaser, on behalf of and for the
benefit of the Depositor as the owner of the Mortgage Loans and the Indenture
Trustee, as the Depositor's assignee.
Section 2.05. ACCEPTANCE OF MORTGAGE LOANS. (a) Pursuant to the Sale and
Servicing Agreement, the Indenture Trustee has agreed to execute and deliver on
or prior to the Closing Date an acknowledgment of receipt of the original
Mortgage Note or Loan Agreement with respect to each Mortgage Loan (with any
exceptions noted) and declares that it will hold such documents and any
amendments, replacements or supplements thereto, as well as any other assets
included in the definition of Trust Estate in the Indenture and delivered to the
Indenture Trustee, as Indenture Trustee in trust upon and subject to the
conditions set forth in the Indenture and Sale and Servicing Agreement for the
benefit of the Securityholders. Pursuant to the Sale and Servicing Agreement,
the Indenture Trustee has agreed to review (or cause to be reviewed) each
Mortgage File within 120 days after the Closing Date or Subsequent Transfer
Date, as applicable (or, with respect to any Eligible Substitute Mortgage Loan,
within 120 days after the receipt by the Indenture Trustee thereof) to determine
that (i) all documents required to be delivered to it hereunder, pursuant to the
Purchase and Sale Agreement and pursuant to the Sale and Servicing Agreement are
in its possession, and (ii) each such document has been reviewed by it, has been
executed to the extent required, and has not been mutilated, damaged, torn or
otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialed by the Mortgagor), appears
regular on its face and relates to such Mortgage Loan. The Sale and Servicing
Agreement provides that the Indenture Trustee shall be under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable, or
appropriate for the represented purpose or that they are other than what they
purport to be on their face.
(b) The Sale and Servicing Agreement also provides that, if the
Indenture Trustee during the process of reviewing the Indenture Trustee's
Mortgage Files finds any document constituting a part of a Indenture Trustee's
Mortgage File which is not executed, has not been received, is unrelated to the
Mortgage Loan identified in the Mortgage Loan Schedule, or does not conform to
the requirements of Section 2.04 or the description thereof as set forth in the
Mortgage Loan Schedule, the Indenture Trustee shall promptly so notify the
Master Servicer or the Purchaser, who shall notify the Seller. The Seller agrees
that in performing any such review, the Indenture Trustee may conclusively rely
on the Seller as to the purported genuineness of any such document and any
signature thereon. The Seller agrees to use reasonable efforts to remedy a
material defect in a document constituting part of a Mortgage File of which it
is notified. If, however, within 120 days after such notice the Seller has not
remedied the defect and the defect materially and adversely affects the interest
of the Purchaser in the related Mortgage Loan, then the Seller shall either
substitute in lieu of such Mortgage Loan a Eligible Substitute Mortgage Loan or
purchase such Mortgage Loan in the manner and subject to the conditions set
forth in Section 3.04.
(c) The failure of the Purchaser to give any notice contemplated
herein within the time periods specified above shall not affect or relieve the
Seller's obligation to repurchase any Mortgage Loan pursuant to this Section
2.05 or Section 3.04 of this Agreement.
(d) In the event that any Mortgage Note or Loan Agreement required to be
delivered pursuant to Section 2.04 is conclusively determined by any of the
Seller, the Master Servicer or the Indenture Trustee to be lost, stolen or
destroyed, the Seller shall, within 14 days of the Closing Date deliver to the
Indenture Trustee a "lost note affidavit" in form and substance acceptable to
the Indenture Trustee, and shall simultaneously therewith request the obligor on
such Mortgage Note or under such Loan Agreement to execute and return a
replacement Mortgage Note or Loan Agreement, as applicable, and shall further
agree to hold the Purchaser, the Depositor and the Indenture Trustee harmless
from any loss or damage resulting from any action taken in reliance on the
delivery and possession by the Indenture Trustee of such lost note affidavit.
Upon the receipt of such replacement Mortgage Note or Loan Agreement, as
applicable, the Indenture Trustee shall return the lost note affidavit and the
Master Servicer shall have no further indemnification obligation with respect to
such lost note affidavit. The delivery of such lost note affidavit shall not
affect the obligations of the Seller pursuant to this Section 2.05 or Section
3.04 of this Agreement.
Section 2.06. TRANSFER OF MORTGAGE LOANS; ASSIGNMENT OF AGREEMENT. The
Seller hereby acknowledges and agrees that the Purchaser may sell, transfer and
assign its interest under this Agreement to the Depositor, who in accordance
with the Sale and Servicing Agreement may assign its interest to the Issuer and
the Indenture Trustee as may be required to effect the purposes of the Sale and
Servicing Agreement and the Indenture, without further notice to, or consent of,
the Purchaser or Seller, and the Issuer and Indenture Trustee shall succeed to
such of the rights and obligations of the Depositor as shall be so assigned.
Section 2.07. EXAMINATION OF MORTGAGE. Prior to the Closing Date, the
Seller shall make the Mortgage Files available to the Purchaser or its designee
for examination at the Seller's offices or at such other place as the Seller
shall reasonably specify. The Purchaser or its designee may make such
examination at any time on or before the Closing Date. If the Purchaser or its
designee makes such examination prior to the Closing and identifies any Mortgage
Loans that do not conform to the requirements of the Purchaser as described in
this Agreement, such Mortgage Loans shall be deleted from the Mortgage Loan
Schedule and may be replaced, prior to the Closing Date by substitute Mortgage
Loans acceptable to the Purchaser. The Purchaser may, at its option and without
notice to the Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination.
Section 2.08. BOOKS AND RECORDS. The sale of each Mortgage Loan shall
be reflected on the Seller's accounting and other records, balance sheet and
other financial statements as a sale of assets by the Seller to the Purchaser.
Section 2.09. COST OF DELIVERY AND RECORDATION OF DOCUMENTS. The costs
relating to the delivery and recordation of the documents specified in this
Article II in connection with the Mortgage Loans shall be borne by the
Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. REPRESENTATIONS AND WARRANTIES AS TO THE SELLER. The Seller
hereby represents and warrants to the Purchaser and Indenture Trustee, as of the
Closing Date or each Subsequent Transfer Date, as applicable that:
(a) Seller is a bank duly organized and validly existing under the
banking laws of the State of Indiana and has all licenses necessary to carry on
its business as now being conducted and is duly licensed and qualified in each
such state that requires licensing or qualification in order to conduct business
of the type conducted by the Seller and to perform its obligations as the Seller
hereunder, and in any event the Seller is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan; the Seller has the full power and authority, corporate and
otherwise, to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Seller; and all requisite corporate action has
been taken by the Seller to make this Agreement valid and binding upon the
Seller in accordance with its terms;
(b) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement or
the sale of the Mortgage Loans pursuant to the terms of this Agreement or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Closing Date;
(c) Neither the execution and delivery of this Agreement, the
acquisition or origination of the Mortgage Loans by the Seller or the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, has or will conflict with or result in a
breach of any of the terms, conditions or provisions of the Seller's charter or
by-laws or any legal restriction or any agreement or instrument to which the
Seller is now a party or by which it is bound or to which its property is
subject, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject, or impair the
ability of the Purchaser to realize on the Mortgage Loans, or impair the value
of the Mortgage Loans;
(d) Neither this Agreement nor the Seller Information nor any
statement, report or other document prepared by the Seller and furnished or to
be furnished pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement or alleged untrue statement of
any material fact or omits to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading;
(e) Except as disclosed in the Prospectus Supplement, there is no
action, suit, proceeding or investigation pending or, to the knowledge of the
Seller, threatened before a court, administrative agency or government tribunal
against the Seller which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations, financial
condition, properties or assets of the Seller, or in any material impairment of
the right or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement, the Mortgage Loans, or
of any action taken or to be taken in connection with the obligations of the
Seller contemplated herein, or which would materially impair the ability of the
Seller to perform under the terms of this Agreement or that might prohibit its
entering into this Agreement or the consummation of any of the transactions
contemplated hereby;
(f) The Seller is not in violation of or in default with respect to,
and the execution and delivery of this Agreement by the Seller and its
performance of and compliance with the terms hereof will not constitute a
violation or default with respect to, any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental
agency, which violation or default might have consequences that would materially
and adversely affect the condition (financial or other) or operations of the
Seller or its properties or might have consequences that would materially and
adversely affect its performance hereunder or under any subservicing agreement;
(g) Upon the receipt of each Mortgage File by the Purchaser under this
Agreement, the Purchaser will have good title to each related Mortgage Loan free
and clear of any lien created by the Seller (other than liens which will be
simultaneously released);
(h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes, Loan Agreements and
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions or any federal or state
regulations applicable to a banking corporation in effect in any applicable
jurisdiction;
(i) With respect to any Mortgage Loan purchased by the Seller, the
Seller acquired title to the Mortgage Loan in good faith, without notice of any
adverse claim not otherwise disclosed to the Purchaser;
(j) The Seller does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant contained in this
Agreement. The Seller is solvent and the sale of the Mortgage Loans by the
Seller pursuant to the terms of this Agreement will not cause the Seller to
become insolvent. The sale of the Mortgage Loans by the Seller pursuant to the
terms of this Agreement was not undertaken with the intent to hinder, delay or
defraud any of the Seller's creditors;
(k) The Mortgage Loans are not intentionally selected by the Seller
for sale to the Purchaser in a manner so as to affect adversely the interests of
the Purchaser or of any transferee of the Purchaser (including the Depositor or
the Indenture Trustee);
(l) The Seller has not dealt with any broker or agent or anyone else
that may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans to the Depositor other than to the Depositor or an
affiliate thereof;
(m) The consideration received by the Seller upon the sale of the
Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans; and
(n) The board of directors or loan committee of the Seller approved
this Agreement, which approval is reflected in the minutes of said board or
committee, and will be continuously, from the time of its execution, maintained
as an official record of the Seller.
Section 3.02. REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE
LOANS. As to each Mortgage Loan (and the related Mortgage, Mortgage Notes or
Loan Agreements, as applicable, Assignments and Mortgaged Property, and
including any Subsequent Mortgage Loans), Seller shall be deemed to make the
following representations and warranties to Purchaser and Indenture Trustee as
of the Closing Date or Subsequent Transfer Date, as applicable.
(a) With respect to any Mortgage Loan, the information set forth in
the Mortgage Loan Schedule for the Mortgage Loan is true and correct in all
material respects;
(b) The Mortgage Loans are not assigned or pledged, and Seller is the
sole owner and holder of the Mortgage Loans free and clear of any and all Liens
(other than Permitted Liens) and has full right and authority, under all
governmental and regulatory bodies having jurisdiction over the ownership of the
Mortgage Loans, to sell, assign and transfer the same;
(c) None of the Mortgage Documents is assigned or pledged, and Seller
is the sole owner and holder of the Mortgage Loans free and clear of any and all
Liens (other than Permitted Liens), and has full right and authority, under all
governmental and regulatory bodies having jurisdiction over the ownership of the
Mortgage Loans, to sell, assign and transfer the same;
(d) To the best of Seller's knowledge, the related Mortgages create a
valid and subsisting first or more junior lien with respect to each Mortgaged
Property; and as of the Cut-Off Date, such Mortgaged Property is free and clear
of all encumbrances and Liens having priority over the first or more junior
lien, as applicable, of such Mortgage, except for Permitted Liens;
(e) To the best of Seller's knowledge, there is no valid offset,
defense or counterclaim of any Mortgagor under any Mortgage Document;
(f) Other than amounts that constitute Permitted Liens, to the best of
Seller's knowledge, there is no delinquent recording or other tax, fee or
assessment lien against any of the Mortgaged Properties;
(g) To the best of Seller's knowledge, there is no proceeding pending
or threatened for the total or partial condemnation of any of the Mortgaged
Properties, and such Mortgaged Properties are free of material damage;
(h) Other than amounts that constitute Permitted Liens, to the best of
Seller's knowledge, no mechanics' or similar liens have been filed for work,
labor or materials affecting any of the Mortgaged Properties that are or may
become liens prior or equal to the liens of the related Mortgages;
(i) No monthly payment of principal or interest is more than 59 days
delinquent (measured on a contractual basis);
(j) The Mortgage Files contain each of the documents and instruments
specified to be included therein;
(k) The Mortgage Documents at origination complied in all material
respects with applicable state and federal laws, including usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws applicable to the Mortgage Loans;
(l) On the Closing Date, with respect to the Mortgage Loans, Seller
has filed UCC-1 financing statements naming Transferor as debtor/seller and
Depositor as secured party/purchaser with respect to the Mortgage Loans;
(m) A property profile, title search, limited coverage policy or title
insurance policy was obtained with respect to each Mortgage Loan, to the extent
consistent with the normal credit and underwriting policies of Seller;
(n) Reserved.
(o) As of any Subsequent Transfer Date, taking into account the
Subsequent Mortgage Loans being transferred, no more than 45% (by aggregate
Principal Balance) of the Mortgage Loans in Group II and no more than 45% (by
aggregate Principal Balance) of all of the Mortgage Loans in Groups I, II and
III constitute "real estate mortgages" for the purposes of Treasury Regulation
ss. 301.7701(i)-1(d) under the Code. For this purpose a Mortgage Loan
constitutes a "real estate mortgage" if it satisfies either test set out in
paragraph (i) or paragraph (ii) below:
(i) The fair market value of the interest in real property
securing the obligation 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). For purposes of this paragraph (a), 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. 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.
(ii) Substantially all of the proceeds of the obligation were
used for one or more of the following purposes: (i) to acquire an
interest in real property; (ii) to improve an interest in real
property; or (iii) to protect an interest in real property, that, at
the origination date, is the only security for the obligation. For
this purpose only, substantially all of the proceeds of the
obligations means two-thirds or more of the gross proceeds. For
purposes of this paragraph (b), the use of the proceeds of the related
Mortgage Loan to retire an existing lien against the related Mortgaged
Property is considered use of the proceeds to protect an interest in
real property;
(p) No selection procedure reasonably believed by Seller to be adverse
to the interests of Depositor, the Indenture Trustee or the Noteholders was
utilized in selecting the Mortgage Loans;
(q) Seller has not transferred the Mortgage Loans with any intent to
hinder, delay or defraud any of its creditors;
(r) The monthly principal and interest payment with respect to each
Mortgage Loan that is not a HELOC is sufficient to pay accrued interest on and
amortize the outstanding Principal Balance of such Mortgage Loan;
(s) Each Mortgage Loan and the related Mortgage Documents is a legal,
valid and binding obligation of the related Mortgagor, enforceable against the
related Mortgagor, except as the enforceability thereof may be limited by the
effect of bankruptcy, insolvency or similar laws affecting creditors' rights
generally;
(t) To the best of Seller's knowledge, there has been no default on
any senior mortgage loan relating to a Mortgaged Property that has not been
cured by a Person other than Seller or an affiliate thereof;
(u) Each Mortgage Loan assigned to Group I or Group II accrues
interest at a fixed rate;
(v) This Agreement constitutes a valid transfer and assignment to
Transferor of all right, title and interest of Seller in and to the outstanding
principal balances with respect to the Mortgage Loans, all monies due or to
become due with respect thereto, all proceeds of such outstanding principal
balances, and all other property relating to such outstanding principal
balances; and
(w) To the best of Seller's knowledge, no Mortgagor is insolvent or
bankrupt.
Section 3.03. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser hereby represents, warrants and covenants to the Seller, as of the
date of execution of this Agreement and the Closing Date, that:
(a) The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Purchaser has the corporate power and authority to purchase
each Mortgage Loan and to execute, deliver and perform, and to enter into and
consummate all the transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly authorized, executed and
delivered by the Purchaser, and, assuming the due authorization, execution and
delivery hereof by the Seller, constitutes the legal, valid and binding
agreement of the Purchaser, enforceable against the Purchaser in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity principles (regardless of
whether such enforcement is considered in a proceeding in equity or at law);
(d) 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 Purchaser with
this Agreement or the consummation by the Purchaser of any of the transactions
contemplated hereby, except such as have been made on or prior to the Closing
Date; and
(e) None of the execution and delivery of this Agreement, the purchase
of the Mortgage Loans from the Seller, the consummation of the other
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement, (i) conflicts or will conflict with the
charter or bylaws of the Purchaser or conflicts or will conflict with or results
or will result in a breach of, or constitutes or will constitute a default or
results or will result in an acceleration under, any term, condition or
provision of any indenture, deed of trust, contract or other agreement or other
instrument to which the Purchaser is a party or by which it is bound and which
is material to the Purchaser, or (ii) results or will result in a violation of
any law, rule, regulation, order, judgment or decree of any court or
governmental authority having jurisdiction over the Purchaser.
Section 3.04. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION AND FOR
BREACH OF A REPRESENTATION OR Warranty. (a) Each of the representations and
warranties contained in Sections 3.01 and 3.02 shall survive the purchase by the
Purchaser of the Mortgage Loans and the subsequent transfer thereof by (i) the
Purchaser to the Depositor and (ii) by the Depositor to the Issuer and (iii) by
the Issuer to the Indenture Trustee and the delivery of the Notes to the
Noteholders, and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes or Loan Agreements,
as applicable and notwithstanding subsequent termination of this Agreement, the
Purchase and Sale Agreement, the Sale and Servicing Agreement or the Indenture.
(b) With respect to any representation or warranty contained in
Section 3.01 or 3.02 hereof that is made to the best of the Seller's knowledge,
if it is discovered by the Purchaser, the Master Servicer, any subservicer, the
Indenture Trustee or any Noteholder that the substance of such representation
and warranty was inaccurate as of the Closing Date or Subsequent Transfer Date,
as applicable and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan, then notwithstanding the Seller's lack of knowledge
with respect to the inaccuracy at the time the representation or warranty was
made, such inaccuracy shall be deemed a breach of the applicable representation
or warranty. Upon discovery by the Seller, the Purchaser, the Master Servicer,
any subservicer, the Indenture Trustee or any Noteholder of a breach of any of
such representations and warranties which materially and adversely affects the
value of Mortgage Loans or the interest of the Noteholders, or which materially
and adversely affects the interests of the Noteholders in the related Mortgage
Loan (including Subsequent Mortgage Loans) in the case of a representation and
warranty relating to a particular Mortgage Loan (notwithstanding that such
representation and warranty was made to the Seller's best knowledge), the Person
discovering such breach shall, pursuant to Section 2.08 of the Sale and
Servicing Agreement, give prompt written notice to the others of such Persons.
Subject to the next to last paragraph of this Section 3.04, within 120 days of
the earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Seller shall (i) promptly cure such breach in
all material respects, or (ii) purchase such Mortgage Loan (including Subsequent
Mortgage Loans) at a purchase price equal to the Principal Balance of such
Mortgage Loan as of the date of purchase, plus the greater of (1) all accrued
and unpaid interest on such Principal Balance and (2) 30 days' interest on such
Principal Balance, computed at the Mortgage Interest Rate, or (iii) cause the
removal of such Mortgage Loan (or Subsequent Mortgage Loans) from the Trust
Estate (in which case it shall become a Deleted Loan) and substitute one or more
Eligible Substitute Mortgage Loans. Any such substitution shall be accompanied
by payment by the Seller of the Substitution Adjustment Amount, if any, to be
deposited in the Collection Account pursuant to the Sale and Servicing
Agreement.
(c) As to any Deleted Loan for which the Seller substitutes, or has
caused to be substituted therefor, a Eligible Substitute Mortgage Loan or Loans,
the Seller shall effect, or shall cause to be effected, such substitution by
delivering, or by causing the delivery, to the Indenture Trustee a certification
executed by a Servicing Officer of the Master Servicer and the documents
described in Section 2.04 (a) for such Eligible Substitute Mortgage Loan or
Loans. Pursuant to the Sale and Servicing Agreement, upon receipt by the
Indenture Trustee of a certification of a Servicing Officer of the Master
Servicer of such substitution or purchase and, in the case of a substitution,
upon receipt of the related Mortgage File, and the deposit of certain amounts in
the Collection Account pursuant to Section 2.09 of the Sale and Servicing
Agreement, the Indenture Trustee shall be required to release to the Master
Servicer for release to the Purchaser the related Mortgage File and shall be
required to execute, without recourse, and deliver such instruments of transfer
furnished by the Purchaser as may be necessary to transfer such Mortgage Loan to
the Purchaser.
(d) Pursuant to the Sale and Servicing Agreement, the Master Servicer
has agreed to deposit in the Collection Account all payments received in
connection with such Eligible Substitute Mortgage Loan or Loans after the date
of such substitution. The Seller will retain Monthly Payments received with
respect to Eligible Substitute Mortgage Loans on or before the date of
substitution. The Trust Estate will own all payments received on the Deleted
Loan on or before the date of substitution, and the Seller shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Loan. Pursuant to the Sale and Servicing Agreement, the Master Servicer shall be
required to give written notice to the Indenture Trustee that such substitution
has taken place and shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Loan from the terms of the Sale and Servicing Agreement
and the substitution of the Eligible Substitute Mortgage Loan. The parties
hereto agree to amend the Mortgage Loan Schedule accordingly. Upon such
substitution, such Eligible Substitute Mortgage Loan or Loans shall be subject
to the terms of the Purchase and Sale Agreement, the Sale and Servicing
Agreement, the Indenture and this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Eligible Substitute Mortgage
Loan or Loans, as of the date of substitution, the representations and
warranties set forth in Sections 3.01 and 3.02 herein. On the date of such
substitution, the Seller will remit, or will cause to be remitted, to the Master
Servicer and pursuant to the Sale and Servicing Agreement the Master Servicer
will deposit into the Collection Account the Substitution Adjustment Amount, if
any.
(e) It is understood and agreed that the obligations of the Seller set
forth in Section 2.05 and this Section 3.04 to cure, purchase or substitute for
a defective Mortgage Loan as provided in Section 2.05 and this Section 3.04
constitute the sole remedies of the Purchaser, the Depositor, the Indenture
Trustee and the Noteholders respecting a breach of the foregoing representations
and warranties.
(f) Any cause of action against the Seller relating to or arising out
of the breach of any representations and warranties or covenants made in Section
2.05, 3.01 or 3.02 or this Section 3.04 shall accrue as to any Mortgage Loan
upon (i) discovery of such breach by any party and notice thereof to the Seller,
(ii) failure by the Seller to cure such breach or purchase or substitute such
Mortgage Loan as specified above, and (iii) demand upon the Seller by the
Purchaser for all amounts payable in respect of such Mortgage Loan.
ARTICLE IV
THE SELLER
Section 4.01. COVENANTS OF THE SELLER. The Seller covenants to the
Purchaser as follows:
(a) The Seller shall cooperate with the Purchaser in making available
all information and taking all steps reasonably necessary to permit accountants'
letters to be delivered as necessary.
(b) The Seller agrees to satisfy or cause to be satisfied on or prior
to the Closing Date, all of the conditions to the Purchaser's obligations set
forth in Section 5.01 hereof that are within the Seller's (or its agents')
control.
(c) The Seller hereby agrees to do all acts, transactions, and things
and to execute and deliver all agreements, documents, instruments, and papers by
and on behalf of the Seller as the Purchaser or its counsel may reasonably
request in order to consummate the transfer of the Mortgage Loans to the
Purchaser and the subsequent transfer thereof to the Depositor.
Section 4.02. MERGER OR CONSOLIDATION. The Seller will keep in full effect
its existence, rights and franchises as a banking corporation and will obtain
and preserve its qualification to do business as a foreign corporation, in each
jurisdiction necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement. The Seller shall send notice of any merger or consolidation to the
Purchaser and any recipients designated by the Purchaser.
Section 4.03. INDEMNIFICATION. (a) The Seller agrees to indemnify and to
hold the Purchaser harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Purchaser may sustain in any way related to
the failure of the Seller to perform its duties in compliance with the terms of
this Agreement. The Purchaser shall immediately notify the Seller if a claim is
made by a third party with respect to this Agreement, and the Seller shall have
the right to assume the defense of any such claim and will pay or cause to be
paid all expenses in connection therewith, including reasonable counsel fees,
and will promptly cause to be paid, discharged and satisfied, any judgment or
decree which may be entered against the Seller or the Purchaser in respect of
such claim. Pursuant to the Indenture, the Indenture Trustee shall reimburse the
Purchaser in accordance with the Purchase and Sale Agreement for all amounts
advanced by the Purchaser in accordance with the preceding sentence except when
the claim relates directly to the failure of the Seller to perform its duties in
compliance with the terms of this Agreement.
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01. CONDITIONS OF PURCHASER'S OBLIGATIONS. (a) The obligations of
the Purchaser to purchase the Mortgage Loans will be subject to the satisfaction
on the Closing Date of the following conditions. Upon payment of the purchase
price for the Mortgage Loans, such conditions shall be deemed satisfied or
waived.
(b) Each of the obligations of the Seller required to be performed by
it on or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Seller under this Agreement shall be true and correct as of
the Closing Date and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement.
(c) The Mortgage Loans will be acceptable to the Purchaser, in its
sole discretion.
(d) The Purchaser shall have received the Mortgage Loan Schedule and
an executed receipt acknowledging the delivery of consideration in exchange for
the Mortgage Loans.
(e) The Seller shall have furnished the Purchaser with such other
certificates of its officers or others and such other documents or opinions as
the Purchaser or its counsel may reasonably request.
Section 5.02. CONDITIONS OF SELLER'S OBLIGATIONS. The obligations of the
Seller under this Agreement shall be subject to the satisfaction, on the Closing
Date of the following conditions:
(a) Each of the obligations of the Purchaser required to be performed
by it at or prior to the Closing pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the representations and
warranties of the Purchaser contained in this Agreement shall be true and
correct as of the Closing Date.
(b) The Seller shall have received an executed receipt acknowledging
delivery of the Mortgage Loans and the Mortgage Loan Schedule to the Indenture
Trustee.
(c) The Purchaser shall have furnished the Seller with such other
certificates of its officers or others and such other documents to evidence
fulfillment of the conditions set forth in this Agreement as the Seller may
reasonably request.
Section 5.03. TERMINATION OF PURCHASER'S OBLIGATIONS. (a) The Purchaser may
terminate its obligations hereunder by notice to the Seller at any time before
delivery of and payment of the purchase price for the Mortgage Loans if: (a) any
of the conditions set forth in Section 5.01 are not satisfied when and as
provided therein; (b) there shall have been the entry of a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Seller, or for the winding up or liquidation
of the affairs of the Seller; (c) there shall have been the consent by the
Seller to the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Seller or of or relating to
substantially all of the property of the Seller; or (d) any purchase and
assumption agreement with respect to the Seller or the assets and properties of
the Seller shall have been entered into. The termination of the Purchaser's
obligations hereunder shall not terminate the Purchaser's rights hereunder or
its right to exercise any remedy available to it at law or in equity.
ARTICLE VI
MISCELLANEOUS
Section 6.01. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed by registered mail, postage prepaid, or transmitted by
telex or telegraph and confirmed by a similar mailed writing, if to the
Purchaser, addressed to the Purchaser at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxx 00000, Attention: Xxxxx Xxxxxx, Esq. and Xxxxxx Xxxxx (with a copy to
the Master Servicer and to Xxxxx Xxxxxx, Xxxx Xxxxxxx and Xxxx Xxxxxxx, Esq. at
Xxxxx Home Equity Corporation, 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx 94583), or to such other address as the Purchaser may designate in
writing to the Seller and if to the Seller, addressed to the Seller at Xxxxx
Union Bank and Trust Company, 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000,
Attention: Xxxxx Xxxxxx, Esq. and Xxxxxx Xxxxx (with a copy to the Master
Servicer and to Xxxxx Xxxxxx, Xxxx Xxxxxxx and Xxxx Xxxxxxx, Esq. at Xxxxx Home
Equity Corporation, 00000 Xxxxxxx Xxxx., Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx
94583), or to such other address as the Seller may designate in writing to the
Purchaser.
Section 6.02. SEVERABILITY OF PROVISIONS. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement which is prohibited or unenforceable or 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 Mortgage 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 6.03. AGREEMENT OF SELLER. The Seller agrees to execute and deliver
such instruments and take such actions as the Purchaser may, from time to time,
reasonably request in order to effectuate the purpose and to carry out the terms
of this Agreement.
Section 6.04. SURVIVAL. The parties to this Agreement agree that the
representations, warranties and agreements made by each of them herein and in
any certificate or other instrument delivered pursuant hereto shall be deemed to
be relied upon by the other party hereto, notwithstanding any investigation
heretofore or hereafter made by such other party or on such other party's
behalf, and that the representations, warranties and agreements made by the
parties hereto in this Agreement or in any such certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans.
Section 6.05. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 6.06. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as expressly permitted by the terms
hereof, this Agreement may not be assigned, pledged or hypothecated by any party
hereto to a third party without the written consent of the other party to this
Agreement; provided, however, that the Purchaser may assign its rights hereunder
without the consent of the Seller.
Section 6.07. CONFIRMATION OF INTENT; GRANT OF SECURITY INTEREST. It is the
express intent of the parties hereto that the conveyance of the Mortgage Loans
by the Seller to the Purchaser as contemplated by this Agreement be, and be
treated for all purposes as, a sale by the Seller to the Purchaser of the
Mortgage Loans. It is, further, not the intention of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. However, in the
event that, notwithstanding the intent of the parties, the Mortgage Loans are
held to continue to be property of the Seller then (a) this Agreement shall also
be deemed to be a security agreement within the meaning of Articles 8 and 9 of
the Uniform Commercial Code; (b) the transfer of the Mortgage Loans provided for
herein shall be deemed to be a grant by the Seller to the Purchaser of, and the
Seller hereby does grant, a security interest in all of the Seller's right,
title and interest in and to the Mortgage Loans and all amounts payable on the
Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property to secure a loan from the Purchaser in the amount
equal to the purchase price described in Section 2.02 hereof; (c) the possession
by the Purchaser of Mortgage Notes, Loan Agreements and such other items of
property as constitute instruments, money, negotiable documents or chattel paper
shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-313 of the Uniform
Commercial Code; and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to any provision
hereof shall also be deemed to be an assignment of any security interest created
hereby. The Seller and the Purchaser 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 Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
or more junior priority under applicable law and will be maintained as such
throughout the term of this Agreement.
Section 6.08. MISCELLANEOUS. This Agreement supersedes all prior agreements
and understandings relating to the subject matter hereof.
Section 6.09. AMENDMENTS. This Agreement may be amended from time to time
by the parties hereto (i) to cure any ambiguity, correct or supplement any
provision of this Agreement that may be inconsistent with any other provision of
this Agreement, add any provision that provides additional rights to the
Certificateholders or Noteholders or ensure that the Trust is not classified as
an association (or a publicly traded partnership) taxable as a corporation for
federal income tax purposes; provided, that (A) (i) such amendment will not, in
the good faith judgment of the parties thereto, materially and adversely affect
the interest of any Certificateholder or Noteholder and (ii) an Opinion of
Counsel is delivered to the effect that such amendment will not materially and
adversely affect the interest of any Certificateholder or Noteholder or (B) to
the extent affected thereby, with the consent of the Holders of Notes evidencing
not less than a majority of the Note Balance of the Notes and, to the extent
affected thereby, the consent of the Holders of Certificates evidencing not less
than a majority of the Percentage Interests of the Certificates for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Mortgage Loans or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Note Balance of
the Notes and the Percentage Interests of the Certificates required to consent
to any such amendment, without the consent of the Holders of all the outstanding
Notes and Holders of all outstanding Certificates.
Promptly after the execution of any such amendment or consent, the
Seller and the Purchaser shall furnish written notification of the substance of
such amendment or consent to each Certificateholder and the Indenture Trustee.
It shall not be necessary for the consent of the Certificateholder or Noteholder
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of the Certificateholder or Noteholders provided for in this Agreement
or in any other Basic Document) and of evidencing the authorization of the
execution thereof by the Certificateholder or Noteholders shall be subject to
such reasonable requirements as the Owner Trustee or Indenture Trustee may
prescribe from time to time.
Section 6.10. THIRD PARTY BENEFICIARIES. The Seller intends that the
Indenture Trustee is a third party beneficiary of each of the Seller's
representations and warranties and covenants stated herein.
Section 6.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
CONSIDERATION OF THE CHOICE OF LAW PRINCIPLES THEREOF, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 6.12. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties to this Mortgage Loan Sale Agreement
have caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.
IHE FUNDING CORP. II,
as Purchaser
Attest: _____________________ By: _________________________
Name: Name:
Title: Title
XXXXX UNION BANK AND TRUST COMPANY,
as Seller
Attest: _____________________ By: _________________________
Name: Name:
Title: Title
