MASTER LOAN PURCHASE AGREEMENT
WASHINGTON MUTUAL BANK, FA,
Purchaser
and
FFCA ACQUISITION CORPORATION,
Seller
Dated as of December 14, 1999
Fixed and Adjustable Rate Commercial Loans
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS................................................................. 1
SECTION 1.01. DEFINITIONS.............................................. 1
ARTICLE II PURCHASE AND SALE OF LOANS....................................... 12
Section 2.01. Agreement to Purchase................................ 12
Section 2.02. Purchase Price ...................................... 13
Section 2.03. Loan Origination Procedures.......................... 14
Section 2.04. Funding Procedures................................... 17
Section 2.05. Delivery of Loan Documents........................... 18
Section 2.06. Indemnification by Purchaser......................... 18
Section 2.07. Servicing ........................................... 19
Section 2.08. Closing Costs ....................................... 19
ARTICLE III RESERVED ....................................................... 19
ARTICLE IV CONDITIONS....................................................... 19
Section 4.01. Execution Date ...................................... 19
Section 4.02. Effective Date ...................................... 20
ARTICLE V REPRESENTATIONS AND WARRANTIES; REMEDIES.......................... 20
Section 5.01. Representations and Warranties of the Seller......... 20
Section 5.02. Representations and Warranties Regarding
Individual Loans .................................... 21
Section 5.03. Defect, Breach, Cure and Repurchase; Indemnity....... 28
Section 5.04. Representations and Warranties of the
Purchaser............................................ 29
ARTICLE VI COVENANTS OF THE SELLER.......................................... 30
Section 6.01. Continuing Existence of the Seller................... 30
Section 6.02. Assignment of Rights; Delegation of Duties........... 31
Section 6.03. Securitization....................................... 31
Section 6.04. Environmental Insurance.............................. 31
Section 6.05. Provision of Information............................. 32
Section 6.06. Interest Calculations ............................... 32
ARTICLE VII COVENANTS OF THE PURCHASER...................................... 32
Section 7.01. Continuing Existence of the Purchaser................ 32
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Section 7.02. Assignment of Rights; Delegation of Duties........... 32
Section 7.03. Confidentiality ..................................... 33
Section 7.04. Provision of Information............................. 33
Section 7.05. Prepayment Charges and Yield Maintenance Premiums.... 33
ARTICLE VIII TERMINATION.................................................... 34
Section 8.01. Agreement Term; Termination.......................... 34
ARTICLE IX MISCELLANEOUS.................................................... 36
Section 9.01. Notices.............................................. 36
Section 9.02. Severability Clause.................................. 37
Section 9.03. Counterparts......................................... 37
Section 9.04. Governing Law ....................................... 37
Section 9.05. Successors and Assigns............................... 37
Section 9.06. Waivers.............................................. 37
Section 9.07. Exhibits and Schedules............................... 37
Section 9.08. General Interpretive Principles...................... 37
Section 9.09. Further Agreements................................... 38
Section 9.10. Dispute Resolution................................... 38
Section 9.11. Entire Agreement .................................... 41
Exhibit A Form of Purchase Terms Letter
Exhibit B Form of Purchase Terms Amendment
Exhibit C Reserved
Exhibit D Form of Seller's Officer's Certificate
Exhibit E Form of FFCA Officer's Certificate
Exhibit F Form of Purchaser's Officer's Certificate
Exhibit G Form of Xxxx of Sale
Exhibit H Eligible Loans
Exhibit I Form of Master Bailee Agreement
Exhibit J Form of Master Escrow Agreement
Exhibit K Reserved
Exhibit L Form of Funding Notice
Exhibit M Purchaser's Funding Representative(s)
Exhibit N Purchaser's Origination Representative(s)
Exhibit O Seller's Representative(s)
Schedule 1 Information Included in Loan Proposal
Schedule 2 Material Changes to Approved Loan
Schedule 3 Variations to the Seller's Form Loan Documents in Approved Form
Schedule 4 Required Endorsements
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MASTER LOAN PURCHASE AGREEMENT
This MASTER LOAN PURCHASE AGREEMENT, dated as of December 14, 1999 (this
"Agreement"), is made between Washington Mutual Bank, FA, having an office at
0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the "Purchaser") and FFCA
Acquisition Corporation, having an office at The Perimeter Center, 17207 North
Perimeter Drive, Scottsdale, Arizona 85255-5402 (the "Seller").
RECITALS
WHEREAS, the Seller originates, and in the future Affiliates of the Seller
will originate, certain fixed and adjustable rate commercial loans secured by
various types of commercial properties, equipment and other assets;
WHEREAS, from time to time following the Effective Date, the Purchaser may
agree to purchase from such Affiliates, and such Affiliates may agree to sell to
the Purchaser, pursuant to Final Purchase Terms Letters entered into in
accordance with this Agreement, certain fixed and adjustable rate commercial
loans originated by such Affiliates pursuant to and in accordance with the
Guidelines and Manual as described herein and which shall be delivered
individually or in groups of whole loans on various dates as provided herein on
a servicing retained basis as provided in the Servicing Agreement; and
WHEREAS, the Purchaser and the Seller wish to prescribe the manner of the
origination, funding, conveyance, servicing and control of the Loans.
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For purposes of this Agreement, the following
capitalized terms shall have the respective meanings set forth below. Any
capitalized term used but not defined herein shall have the meaning assigned
such term in the Servicing Agreement.
"Adjustable Rate Loan": Any Loan as to which the Interest Rate on such Loan
will be adjusted monthly on the related Interest Rate Adjustment Date to equal
the sum of LIBOR and the Gross Margin.
"Affiliate": As to any Person, any other Person that is controlled by,
controls or is under common control with such Person. For purposes of this
definition, "control" means the beneficial ownership of securities or other
ownership interests of a Person representing more than 50% of the equity or more
than 50% of the ordinary voting power of such Person.
"Agreement": This Master Loan Purchase Agreement, including the Pricing
Letter and all amendments and supplements thereto and hereto.
"Agreement Term": As defined in Section 8.01(a).
"ALTA": The American Land Title Association.
"Approved Form": With respect to any document, record, agreement,
instrument or other writing, the version thereof, including any modifications,
amendments or changes thereto, that has been approved by the Purchaser, which
approval may be evidenced by written confirmation or by the Purchaser initialing
the particular document, record, agreement, instrument or other writing.
"Approved Loan": Any Prospective Loan that becomes an "Approved Loan"
pursuant to Section 2.03(d) and does not subsequently become a Rejected Loan.
"Arbitrator Credentials": As defined in Section 9.10(c)(i).
"Assignment of Leases": With respect to any Loan, any assignment of leases,
rents and profits or similar document or instrument executed by the Borrower in
connection with the origination or subsequent modification or amendment of the
related Loan.
"Bailee": A Person approved by the Purchaser, in its reasonable discretion,
to act pursuant to a Master Bailee Agreement in accordance with the terms and
conditions set forth therein.
"Balloon Loan": Any Loan that by its original terms or by virtue of any
modification entered into as of the Closing Date provides for an amortization
schedule extending beyond its Stated Maturity Date and as to which, in
accordance with such terms, the Monthly Payment due on its Stated Maturity Date
is larger than the Monthly Payment due on the Due Date immediately preceding its
Stated Maturity Date.
"Balloon Payment": With respect to any Balloon Loan as of any date of
determination, the Monthly Payment payable on the Stated Maturity Date of such
Loan.
"Base Price": As defined in the Pricing Letter.
"Xxxx of Sale": A xxxx of sale in substantially the form of Exhibit G
hereto evidencing the sale of a Loan Group to the Purchaser hereunder.
"Borrower": The obligor or obligors on a Note, including any Person that
has acquired the related Collateral and assumed the obligations of the original
obligor or obligors under the Note.
"Borrower Group": Any one or more Borrower or Borrowers constituting "one
borrower" as defined in 12 X.X.X.xx. 560.93.
"Breach": As defined in Section 5.03(a).
"Business Day": Any day other than a Saturday or Sunday, or a day on which
banking and savings and loan institutions in the State of Arizona or the State
of Washington are authorized or obligated by law or executive order to remain
closed.
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"Cap Price": As defined in the Pricing Letter.
"Chain Store Facility": A quick service restaurant, a casual dining or
family dining restaurant, convenience store, convenience and gasoline store,
travel plaza or automotive parts and/or service facility related to a Mortgage
Loan and Equipment Loan or, to the extent applicable, a Corporate Secured Loan,
and such additional types of facilities as may be added in accordance with the
definition of Eligible Loans.
"Change Approval Sheet": As defined in Section 2.03(i).
"Change of Control": With respect to FFCA, the Servicer (if an Affiliate of
FFCA) and the Seller, (a) if FFCA, the Servicer or the Seller, without the prior
written consent of the Purchaser, (i) consolidates with or merges into any other
Person (other than an Affiliate of FFCA or the Seller) or permits any other
Person to merge into FFCA, the Servicer or the Seller (other than an Affiliate
of FFCA or the Seller) or (ii) transfers substantially all of its assets to any
Person (other than to an Affiliate of FFCA or the Seller); (b) if FFCA, without
the prior written consent of the Purchaser, sells, transfers, assigns or
otherwise disposes of, directly or indirectly, more than 50% of the shares of
stock of the Seller or the Servicer to any Person (other than to an Affiliate of
FFCA) or (c) there occurs any issuance, sale or other disposition of shares of
capital stock of FFCA which results in any person (as such term is used in
Section 13(d) and Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) or related persons constituting a group (as such
term is used in Rule 13d-5 under the Exchange Act) becoming the "beneficial
owners" (as such term is used in Rule 13d-3 under the Exchange Act as in effect
on the date of this Agreement), directly or indirectly, of more than 50% of the
shares of the capital stock of FFCA.
With respect to WMI or the Purchaser, (a) if the Purchaser, without the
prior written consent of the Seller, (i) consolidates with or merges into any
other Person, except where the surviving entity is the Purchaser or an Affiliate
of the Purchaser or of WMI or (ii) transfers substantially all of its assets to
any Person, except where the transferee is an Affiliate of the Purchaser or of
WMI or (b) there occurs any issuance, sale or other disposition of shares of
capital stock of WMI which results in any person (as such term is used in
Section 13(d) and Section 14(d)(2) of the Exchange Act) or related persons
constituting a group (as such term is used in Rule 13d-5 under the Exchange Act)
becoming the "beneficial owners" (as such term is used in Rule 13d-3 under the
Exchange Act as in effect on the date of this Agreement), directly or
indirectly, of more than 50% of the shares of the capital stock of WMI or (c)
WMI consolidates with or merges into any other Person, except where the
surviving entity is WMI or an Affiliate of WMI or the Purchaser.
"Closing Date": With respect to each Loan, the date on which the Purchaser
purchases such Loan. The Closing Date shall always be a Business Day.
"Collateral": As to any Loan, the related Mortgaged Property, Equipment
and/or other property that secures such Loan.
"Corporate Secured Loan": A loan secured by Collateral with respect to
which a Corporate Fixed Charge Coverage Ratio (rather than a Fixed Charge
Coverage Ratio) is provided on the related Loan Schedule; provided, however,
that (i) a Corporate Secured Loan which is secured only by Equipment shall be
deemed an Equipment Loan for purposes of this Agreement, (ii) a Corporate
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Secured Loan which is secured only by Mortgaged Property shall be deemed a
Mortgage Loan for purposes of this Agreement, and (iii) a Corporate Secured Loan
which is secured by both Equipment and Mortgaged Property shall be deemed a
Mortgage Loan for purposes of this Agreement.
"Covered Dispute": As defined in Section 9.10.
"CPR Arbitration Rules": As defined in Section 9.10(b).
"Defective Loan": As defined in Section 5.03(a).
"Document Defect": Any document constituting a part of a Loan File that has
not been properly executed, is missing, contains information that does not
conform in any respect with the corresponding information set forth in the
related Loan Schedule (and the terms of such document have not been modified by
written instrument contained in the Loan File) or does not appear to be regular
on its face.
"Due Date": With respect to any Loan, the day of the calendar month set
forth in the related Note on which each Monthly Payment is scheduled to be due.
"Early Termination": As defined in Section 8.01(d).
"Effective Date": The date on which the Seller assigns its rights and
obligations under this Agreement to one or more nonqualified real estate
investment trust subsidiaries of FFCA pursuant to Section 6.02, which shall
occur no later than January 5, 2000.
"Eligible Loan": A loan that is within the loan types listed in Exhibit H
hereto, and any loan type added to such list from time to time by the Seller
with the written consent of the Purchaser.
"Employment Agreements": The Employment Agreements, in substantially the
form approved in writing by the Purchaser, between FFCA and each of Xxxxxx X.
Xxxxxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxx and
Xxxxxxxxxxx X. Xxxx.
"Environmental Insurer": American International Specialty Lines Insurance
Company, a member company of American International Group, Inc., or any other
insurer approved by the Purchaser that issues Environmental Policies relating to
any Mortgaged Property.
"Environmental Policy": As defined in the Servicing Agreement.
"Equipment": All personalty, furniture, securities and any other property
or assets of any kind securing an Equipment Loan.
"Equipment Loan": A loan secured by a valid and enforceable, first priority
security interest in Equipment of the related Borrower, evidenced by a Security
Agreement and, if applicable, a loan agreement with respect to such Equipment.
"Excess Concentration Loans": As defined in Section 2.01.
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"Excluded Disputes": As defined in Section 9.10.
"Expiration Date": As defined in Section 8.01(b).
"Failed Closing Date": As defined in Section 2.04(b).
"FFCA": Franchise Finance Corporation of America.
"Final Purchase Terms Letter": With respect to each Loan Group, the
Purchase Terms Letter as the same may have been supplemented and/or amended by
any Purchase Terms Amendment(s) related thereto.
"Fixed Rate Loan": A Loan for which the Interest Rate thereon is fixed at
the percentage rate specified in the related Note for the entire term to
maturity of such Loan.
"Funding Date": As defined in Section 2.04.
"Funding Notice": As defined in Section 2.04.
"Gross Margin": With respect to each Adjustable Rate Loan, the fixed
percentage specified in the related Note.
"Guaranty": The Guaranty, dated as of December 14, 1999, made by FFCA for
the benefit of the Purchaser.
"Guidelines and Manual": The Seller's Underwriting Guidelines and Closing
Procedures Manual in the form delivered to the Purchaser, as such guidelines and
procedures may be amended from time to time in writing and delivered to the
Purchaser by the Seller.
"Insurance Policy": With respect to any Loan, any hazard insurance policy,
flood insurance policy, title insurance policy, environmental insurance policy,
residual insurance value policy or other insurance policy that is maintained
from time to time in respect of such Loan or the related Mortgaged Property or
Equipment.
"Interest Accrual Period": As defined in Section 1.01 of the Servicing
Agreement.
"Interest Rate": With respect to any Loan, the annualized rate at which
interest is scheduled (in the absence of a default) to accrue on such Loan from
time to time during any Interest Accrual Period in accordance with the related
Note and applicable law, as such rate may be (a) modified in accordance with
Section 3.20 of the Servicing Agreement or in connection with a bankruptcy,
insolvency or similar proceeding involving the related Borrower and (b) in the
case of an Adjustable Rate Loan, adjusted in accordance with the terms of the
related Note on each Interest Rate Adjustment Date to equal the sum of LIBOR on
the related Interest Rate Determination Date and the Gross Margin for such Loan.
"Interest Rate Adjustment Date": With respect to any Adjustable Rate Loan,
the first day of each calendar month.
"LIBOR": As defined in Section 1.01 of the Servicing Agreement.
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"Loan": Each Mortgage Loan, Equipment Loan or Corporate Secured Loan sold
or to be sold to the Purchaser on a Closing Date pursuant to this Agreement and
the related Final Purchase Terms Letter and identified on the related Loan
Schedule. As used herein, the term "Loan" includes, without limitation, the
related Loan File.
"Loan Approval Sheet": As defined in Section 2.03(c).
"Loan Documents": With respect to each Loan, the agreements and instruments
described in clauses (i), (ii), (iii), (iv), (vii), (ix) and (xiii) of the
definition of Loan File.
"Loan File": With respect to each Loan, the Loan File shall include each of
the following items, which shall be delivered to the Purchaser or the
Purchaser's designee as provided in this Agreement:
(i) the original executed Note, properly endorsed (without recourse)
to the order of "Washington Mutual Bank, FA and its successors and assigns"
together with all prior endorsements showing a complete chain of endorsements
from the original payee of the Note to the Person endorsing the Note to
"Washington Mutual Bank, FA and its successors and assigns";
(ii) in the case of each Mortgage Loan and, to the extent applicable,
each Corporate Secured Loan, an original of the Mortgage and of any recorded
intervening assignments thereof that precede the assignment referred to in
clause (v) of this definition, in each case with evidence of recording indicated
thereon;
(iii) in the case of each Equipment Loan and, to the extent
applicable, each Corporate Secured Loan, an original of the Security Agreement
and of any intervening assignments thereof (for which financing statements have
been filed in the appropriate filing office) that precede the assignment
referred to in clause (v) of this definition;
(iv) in the case of each Loan, to the extent applicable, an original
of any related Assignment of Leases (if such item is a document separate from
the Mortgage) and of any recorded intervening assignments thereof that precede
the assignment referred to in clause (vi) of this definition, in each case with
evidence of recording indicated thereon;
(v) an original executed assignment of the Mortgage and/or Security
Agreement in favor of "Washington Mutual Bank, FA and its successors and
assigns" and, in the case of a Mortgage assignment, in recordable form;
(vi) an original assignment of any related Assignment of Leases (if
such item is a document separate from the Mortgage), in favor of "Washington
Mutual Bank, FA and its successors and assigns" in recordable form;
(vii) the originals of any written modification agreements in those
instances where the terms or provisions of the Note, the Mortgage, the Security
Agreement, any separate Assignment of Leases or any other document referred to
in clause (xiii) of this definition as being assigned have been modified;
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(viii) in the case of each Mortgage Loan and, to the extent
applicable, each Corporate Secured Loan, the original of the policy or
certificate of lender's title insurance, together with all Required
Endorsements, issued on the date of the origination of such Mortgage Loan or
Corporate Secured Loan, or, if such policy has not been issued, an irrevocable,
binding commitment to issue such title insurance policy with all Required
Endorsements;
(ix) copies of any filed UCC Financing Statements in favor of the
originator of such Loan or in favor of any assignee prior to the Purchaser,
together with executed original UCC Financing Statements on Form UCC-2 or UCC-3,
as appropriate, in favor of "Washington Mutual Bank, FA and its successors and
assigns";
(x) if applicable, evidence that such Loan and the related Mortgaged
Property is insured by an Environmental Policy and, in such cases, a copy of the
related environmental questionnaire;
(xi) evidence (in the form of binders, certificates of insurance or
original policies) of all Insurance Policies required to be maintained in
connection with such Loan under the related Loan Documents;
(xii) the originals of all certified financial statements of the
Borrower or any related guarantor;
(xiii) the originals of all related loan agreements, recognition
agreements, collateral leases, management agreements, guaranties, collateral
assignments, stock certificates, stock power forms, stock pledge agreements,
estoppels and certificates (from landlords, franchisors, distributors or other
Persons), any closing certificates of the Borrower or any related guarantor,
opinions of counsel to the Borrower or any related guarantor, and any other
agreements, certificates or instruments made for the benefit of the originator
of such Loan; and
(xiv) an executed original Xxxx of Sale;
PROVIDED THAT in the event the Purchaser legally changes its name or validly
assigns this Agreement pursuant to Section 7.02, the words "Washington Mutual
Bank, FA" in the endorsement described in paragraph (i) and the assignments
described in paragraphs (v), (vi) and (ix) shall, with respect to Loans
purchased after notice of such change or assignment is delivered to the Seller,
reflect the new name of the Purchaser or the name of the permitted assignee.
"Loan Group": One or more Loans purchased or to be purchased by the
Purchaser on a Closing Date pursuant to this Agreement and the related Final
Purchase Terms Letter.
"Loan Proposal": As defined in Section 2.03(a).
"Loan Schedule": The schedule of Loans annexed to the Xxxx of Sale
delivered on the Closing Date for the Loan Group delivered on such Closing Date.
Each such schedule shall set forth the following information with respect to
each Loan:
(i) the related Loan number and Borrower or Borrower Group;
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(ii) as applicable, the street address (including city, state and zip
code) of the related Mortgaged Property or location of the related Equipment or,
with respect to any Corporate Secured Loan, the headquarters address of the
related Borrower;
(iii) the original principal balance thereof;
(iv) the outstanding principal balance thereof as of the Closing Date
(if different than the original principal balance);
(v) the amount of the related Monthly Payment due on the first Due
Date following the Closing Date;
(vi) the Interest Rate for the first Due Date following the Closing
Date;
(vii) the Stated Maturity Date;
(viii) the amortization term;
(ix) a code indicating whether such Loan is a Mortgage Loan, Equipment
Loan or Corporate Secured Loan;
(x) if such Loan is an Adjustable Rate Loan, the related Gross Margin;
(xi) if such Loan is an Adjustable Rate Loan, the related Maximum
Rate, if applicable;
(xii) if such Loan is an Adjustable Rate Loan, the related Minimum
Rate, if applicable; and
(xiii) the related Single Borrower Group Concentration.
"Master Bailee Agreement": A Master Bailee Agreement, among the Purchaser,
the Seller and a Bailee, substantially in the form of Exhibit I attached hereto
as the same may be amended, supplemented or otherwise modified from time to
time.
"Master Escrow Agreement": A Master Escrow Agreement, among the Purchaser,
the Seller and a Title Insurer, substantially in the form of Exhibit J attached
hereto as the same may be amended, supplemented or otherwise modified from time
to time.
"Maximum Rate": To the extent applicable with respect to each Adjustable
Rate Loan, the fixed percentage rate specified in the related Note as the
highest rate to which the Interest Rate on such Loan may be increased on any
Interest Rate Adjustment Date.
"Minimum Rate": To the extent applicable with respect to each Adjustable
Rate Loan, the fixed percentage rate specified in the related Note as the lowest
rate to which the Interest Rate on such Loan may be decreased on any Interest
Rate Adjustment Date.
"Monthly Payment": With respect to each Loan, the scheduled combined
payment of principal and interest (including any Balloon Payment) payable by a
Borrower from time to time under the related Note.
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"Mortgage": With respect to any Mortgage Loan and, to the extent
applicable, any Corporate Secured Loan, the mortgage, deed of trust, deed to
secure debt or similar document, including any such document that includes a
security agreement (and, if applicable and contained in a separate document, the
security agreement) that secures, in whole or in part, the related Note and
creates a lien on the related Mortgaged Property.
"Mortgage Loan": A loan secured by a valid and enforceable, first priority
lien on Mortgaged Property used in or related to the operation of a Chain Store
Facility.
"Mortgaged Property": With respect to each Mortgage Loan, and to the extent
applicable, any Corporate Secured Loan, the related mortgagor's fee and/or
leasehold interest in real property (including all improvements, buildings,
fixtures, leases and, under certain circumstances, building equipment and
personal property located thereon or used in connection therewith, and all
additions, alterations and replacements made at any time with respect to the
foregoing), and all other collateral securing repayment of the debt evidenced by
the related Note and the related mortgagor's interest therein.
"Negative Amortization": As defined in Section 1.01 of the Servicing
Agreement.
"Negative Amortization Cap": As defined in Section 1.01 of the Servicing
Agreement.
"Non-Termination-Related Covered Disputes": As defined in Section
9.10(c)(ii).
"Note": The original executed promissory note evidencing the indebtedness
of a Borrower under a Loan, together with any rider, addendum or amendment
thereto, or any renewal, substitution or replacement of such promissory note.
"Opinion of Counsel": A written opinion of counsel for the Person on behalf
of whom the opinion is being given, acceptable to the party requiring such
opinion in its reasonable discretion.
"Payment Period": As defined in Section 1.01 of the Servicing Agreement.
"Person": An individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof. "Pollution
Condition": As defined in Section 1.01 of the Servicing Agreement.
"Pricing Letter": The Pricing Letter, dated as of even date herewith,
between the Seller and the Purchaser, as the same may be amended, supplemented
or otherwise modified from time to time, including pursuant to Section 2.02(b).
"Prospective Loan": As defined in Section 2.03(a).
"Purchase Price": With respect to each Loan, the amount calculated in
accordance with Section 2.02(a).
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"Purchase Terms Amendment": With respect to each Loan Group, the agreement
with the related Change Approval Sheet attached thereto, executed by the
Purchaser and the Seller in accordance with the terms of this Agreement and
substantially in the form of Exhibit B hereto, by which the related Purchase
Terms Letter is supplemented or amended.
"Purchase Terms Letter": With respect to each Loan Group, the letter
agreement with the related Loan Approval Sheet attached thereto, executed by the
Purchaser and the Seller in accordance with the terms of this Agreement and
substantially in the form of Exhibit A hereto, that evidences the Seller's
agreement to sell, and the Purchaser's agreement to purchase, the related
Loan(s).
"Purchaser": Washington Mutual Bank, FA, and its permitted successors and
assigns.
"Purchaser Reimbursement Amount": As defined in the Pricing Letter.
"Purchaser Termination Event": As defined in Section 8.01(d).
"Purchaser's Funding Representative": Any of the individuals listed in
Exhibit M hereto, as such list may be changed from time to time by the Purchaser
with written notice to the Seller.
"Purchaser's Origination Representative": Any of the individuals listed in
Exhibit N hereto, as such list may be changed from time to time by the Purchaser
with written notice to the Seller.
"Recordable Documents": The documents referred to in clauses (ii), (iv),
(v), (vi), (vii) (to the extent appropriate) and (ix) of the definition of Loan
File herein.
"Registration Rights Agreement": The Registration Rights Agreement, dated
as of even date herewith, between FFCA and WMI.
"Rejected Loan": As defined in Sections 2.03(d), (h) and (i).
"Repurchase Price": With respect to any Loan to be repurchased by the
Seller pursuant to Section 5.03, an amount equal to (a) the Purchase Price paid
by the Purchaser for such Loan, together with all accrued and unpaid interest on
such Loan at the related Interest Rate to but not including the date of
repurchase, minus (b) the sum of (i) all payments of principal received by, or
on behalf of, the Purchaser in connection with such Loan and (ii) any portion of
any Seller Reimbursement Amounts paid in respect of such Loan (minus any
Purchaser Reimbursement Amounts paid by the Purchaser to the Seller in respect
of such Loan).
"Required Endorsements": With respect to the title insurance policy
insuring any Mortgaged Property securing a Loan, the endorsements set forth on
Schedule 4 hereto, as the same may be amended from time to time in writing,
which, except as otherwise approved by the Purchaser, are required to be
obtained from the Title Insurer for each Loan to the extent such endorsements
are appropriate and available in the jurisdiction in which the related Mortgaged
Property is located.
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"Security Agreement": With respect to any Equipment Loan and, to the extent
applicable, any Corporate Secured Loan, the pledge, security agreement or
similar instrument that secures the related Note and creates a lien on the
related Equipment.
"Seller": FFCA Acquisition Corporation, and its permitted successors and
assigns.
"Seller Proprietary Information": Any information (a) regarding existing
and potential customers, marketing and industry research studies, pricing and
deal structure, plans and prospects for new or modified products, underwriting
guidelines, models and procedures, and servicing guidelines and procedures
developed by or for the Seller or its Affiliates and provided to the Purchaser,
but excluding (b) any information (x) that is or becomes generally available to
the public (other than as a breach of the Purchaser's obligation pursuant to
Section 7.03(b)) or (y) that is or becomes available to the Purchaser on a
non-confidential basis from a Person other than the Seller or its Affiliates who
is not known by the Purchaser to be bound by a confidentiality agreement with
the Seller or to otherwise be under an obligation to the Seller not to transmit
the information to the Purchaser.
"Seller Reimbursement Amount": As defined in the Pricing Letter.
"Seller Termination Event": As defined in Section 8.01(c).
"Seller's Representative": Any of the individuals listed in Exhibit O
hereto, as such list may be changed from time to time by the Seller with written
notice to the Purchaser.
"Servicer": FFCA, or its permitted successors and assigns, pursuant to the
Servicing Agreement.
"Servicer's Loan File": As defined in Section 2.05.
"Servicing Agreement": The Servicing Agreement, dated as of even date
herewith, between FFCA, as Servicer and Washington Mutual Bank, FA, as Owner, as
the same may be amended, supplemented or otherwise modified from time to time.
"Servicing Standard": As defined in Section 1.01 of the Servicing
Agreement.
"Single Borrower Group Concentration": The outstanding principal balance of
Loans to each Borrower Group on any date of determination.
"Single Borrower Group Concentration Limit": As defined in the Pricing
Letter.
"Stated Maturity Date": With respect to any Loan, the Due Date specified in
the related Note on which the last payment of principal is due and payable under
the terms of such Note.
"Termination Date": As defined in Section 8.01(a).
"Termination-Related Covered Dispute": As defined in Section 9.10(c)(i).
"Title Insurer": As defined in Section 2.05.
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"Title Matters Indemnity Agreement": With respect to each Mortgage Loan
and, to the extent applicable, each Corporate Secured Loan, an agreement (if
any) between the Borrower and the Seller, indemnifying the Seller for any losses
arising from title matters, including without limitation, zoning, use,
covenants, conditions and restrictions and encroachments, provided that (i) the
related title matters do not, individually or in the aggregate, materially and
adversely affect the current use, value or marketability of the related
Mortgaged Property, and appropriate title insurance coverage for such matters is
not available in the jurisdiction in which the related Mortgaged Property is
located or (ii) such agreement is approved by the Purchaser.
"Trust Receipt": A trust receipt and certification, in substantially the
form of Exhibit A to the Master Bailee Agreement, issued by a Bailee pursuant to
the Master Bailee Agreement.
"UCC or Uniform Commercial Code": The Uniform Commercial Code as in effect
in any applicable jurisdiction.
"UCC Financing Statement": One or more financing statements executed and
either filed or recorded or in a form suitable for filing or recording under the
UCC.
"Warrant": The Warrant to purchase common stock issued by FFCA to WMI on
December 14, 1999.
"Warrant Agreement": The Warrant Agreement, dated as of even date herewith,
between FFCA and WMI.
"WMB Account": As defined in Section 2.04.
"WMI": Washington Mutual, Inc.
ARTICLE II
PURCHASE AND SALE OF LOANS
Section 2.01. AGREEMENT TO PURCHASE.
From time to time during the Agreement Term, the Purchaser agrees to
purchase and the Seller agrees to sell one or more Loans originated by the
Seller pursuant to and in accordance with the terms and conditions of this
Agreement. Each such agreement shall be evidenced by a Final Purchase Terms
Letter. The sale and transfer of each Loan shall not include the transfer of any
servicing rights with respect to any such Loan so long as such Loan is being
serviced under the Servicing Agreement.
Commencing on the Effective Date, the Seller will offer to the Purchaser
each loan being originated by the Seller that is an Eligible Loan approved by
the Seller's investment committee after the Effective Date and that the Seller
reasonably believes is reasonably likely to meet the requirements of this
Agreement and the Guidelines and Manual and otherwise qualifies for sale
hereunder. Notwithstanding anything to the contrary contained in this Agreement,
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the Purchaser acknowledges that the Seller may originate loans (which may be
Eligible Loans) to the same Borrower Group with a Single Borrower Group
Concentration in excess of the Single Borrower Group Concentration Limit (all of
such loans to a single Borrower Group, an "Excess Concentration Loan"). The
Seller shall offer a principal amount (determined by the Seller in its sole
discretion) of each such Excess Concentration Loan to the Purchaser hereunder up
to the Single Borrower Group Concentration Limit. Whether or not the Purchaser
purchases any portion of such Excess Concentration Loans, the Purchaser will
cooperate reasonably and in good faith with the Seller in permitting the Seller
to sell or pool for securitization other Eligible Loans in order to offset the
concentration of any such Excess Concentration Loans (or portions thereof) not
purchased by the Purchaser.
During the Agreement Term, the Purchaser shall not, and shall cause its
Affiliates not to, enter into any agreement or series of agreements with any
third party to purchase on a flow, volume or repetitive basis, loans of the same
or a similar type as the Eligible Loans; provided, however, that the Purchaser
shall not be precluded from purchasing individual loans and/or loan pools and/or
portfolios of loans (or participations, syndications or certificated interests
in such loans) of the same or a similar type as the Eligible Loans and which are
not acquired, directly or indirectly, on a flow or volume basis. In the event
that, during any calendar year, the Seller offers Eligible Loans to the
Purchaser pursuant to this Section 2.01 with a proposed aggregate principal
balance of less than $1 billion, the Purchaser may, after the end of any such
calendar year, provide notice to the Seller that it desires to increase the
volume of Eligible Loans to be presented to it under this Agreement and, upon
receipt of such notice, the Seller and the Purchaser shall cooperate reasonably
and in good faith to increase the volume of Eligible Loans to be presented by
the Seller, commencing with the following calendar quarter, including by
expanding the loan types that qualify as Eligible Loans. In the event that the
Seller is thereafter unable to offer Eligible Loans to the Purchaser during the
following three calendar quarters with a proposed aggregate principal balance of
at least $1.25 billion, the Purchaser shall be entitled to enter into an
agreement with any third party to purchase loans of the same or similar type as
the Eligible Loans, including on a flow and/or volume basis. In addition, in the
event that the Purchaser desires to increase the volume of Eligible Loans
reasonably expected to be presented to it under this Agreement over a specified
period of time, the Purchaser shall submit a proposed business plan to the
Seller and, upon receipt of such plan, the Seller and the Purchaser shall
negotiate reasonably and in good faith to develop a mutually acceptable business
plan to increase the volume of Eligible Loans expected to be presented by the
Seller under this Agreement to a level acceptable to the Purchaser for such
specified period, including by expanding the loan types that qualify as Eligible
Loans. In the event that the Seller and the Purchaser are unable, following
reasonable and good faith negotiations over a 45 day period, to agree upon such
a business plan, the Purchaser shall be entitled to enter into an agreement with
any third party to purchase loans of the same or similar type as the Eligible
Loans, including on a flow and/or volume basis.
Section 2.02. PURCHASE PRICE.
(a) The Purchase Price for each Loan included in a Loan Group shall be
calculated pursuant to the Pricing Letter and shall be set forth in the related
Funding Notice. The Seller shall pay Seller Reimbursement Amounts, if any, to
the Purchaser in accordance with the Pricing Letter. The Purchaser shall pay
Purchaser Reimbursement Amounts, if any, to the Seller in accordance with the
Pricing Letter. The Seller shall have no further obligation to pay Seller
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Reimbursement Amounts and the Purchaser shall have no further obligation to pay
Purchaser Reimbursement Amounts upon termination of the Servicing Agreement in
accordance with Section 8.02(b) of the Servicing Agreement and payment of the
termination fee in accordance with such Section.
(b) If, during any calendar quarter, (i) 30% or more of the number of Loans
purchased by the Purchaser hereunder have a Purchase Price less than the Base
Price or (ii) 30% or more of the number of Loans purchased by the Purchaser
hereunder have a Purchase Price greater than Cap Price, then within ten days of
the end of such calendar quarter, the Seller (in the case of clause (i)) or the
Purchaser (in the case of clause (ii)) may give notice to the other party of its
desire to meet (in person or by telephone) to negotiate a revised formula for
the calculation of the Purchase Price. If such a notice is given, the parties
shall meet (in person or by telephone) no later than fifteen days following the
date of such notice and, if the parties are unable, following good faith and
reasonable negotiations, to agree on a revised pricing formula within fifteen
days following such meeting, the Seller (in the case of clause (i) above) or the
Purchaser (in the case of clause (ii) above) shall be entitled to terminate this
Agreement pursuant to Section 8.01(c)(5) or Section 8.01(d)(4), respectively. If
the parties agree upon a revised pricing formula, the Purchaser and the Seller
shall amend the Pricing Letter accordingly.
Section 2.03. LOAN ORIGINATION PROCEDURES.
The Seller shall underwrite each Eligible Loan in accordance with the terms
of the underwriting specifications and guidelines set forth in the Guidelines
and Manual. The following procedures shall be followed in connection with the
underwriting and origination of each Loan pursuant to this Agreement:
(a) The Seller will obtain preliminary underwriting information from a
prospective borrower and, if the Seller determines that the prospective loan
would be reasonably likely to be eligible for purchase under this Agreement (a
"Prospective Loan"), the Seller shall submit to the Purchaser a proposal (the
"Loan Proposal") for such Prospective Loan, which shall include the "internal
credit write-up" required by the Guidelines and Manual and the items listed on
Schedule 1, at or about the time such Loan Proposal is submitted to the Seller's
investment committee. The Seller may transmit such Loan Proposal to the
Purchaser electronically, by facsimile or by overnight courier.
(b) The Seller shall hold a meeting of its investment committee as
soon as reasonably practicable after the Loan Proposal is submitted to the
Purchaser. The Purchaser shall be entitled to designate one or more
representatives to participate by teleconference in the meeting of the Seller's
investment committee relating to the Prospective Loan. The Purchaser's
representatives shall not have the right to vote in any meeting of the Seller's
investment committee.
(c) The Seller shall notify the Purchaser of the decision of the
Seller's investment committee with respect to the Prospective Loan, which, in
the case of a Prospective Loan that is approved by the Seller's investment
committee, shall be by delivery of the Seller's appropriately executed loan
approval sheet (each, a "Loan Approval Sheet") setting forth, among other
things, any conditions imposed by the investment committee on the issuance of a
commitment to make the Prospective Loan.
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(d) Within three Business Days after its receipt of a Loan Approval
Sheet indicating that the Seller's investment committee has approved the
issuance of a commitment to make such Prospective Loan, the Purchaser shall
notify the Seller, by (in the case of (i) or (ii) below) delivery of an executed
Purchase Terms Letter, whether the Prospective Loan is (i) approved for
purchase, (ii) approved for purchase subject to conditions (including a
different principal amount) or (iii) not approved for purchase. If the Purchaser
does not so notify the Seller within such three Business Day period, the
Purchaser will be deemed to have rejected the Prospective Loan. If the Purchaser
approves the Prospective Loan pursuant to the foregoing clause (i), the
Prospective Loan shall constitute an "Approved Loan" for purposes of this
Agreement. If the Purchaser rejects or is deemed to reject the Prospective Loan,
the Prospective Loan shall constitute a "Rejected Loan" for purposes of this
Agreement. If a Prospective Loan is approved by the Purchaser for purchase
subject to conditions (which shall be set forth in the Purchase Terms Letter),
the Seller shall notify the Purchaser, within two Business Days after its
receipt of an executed Purchase Terms Letter, that the Seller either (i) accepts
such conditions (by executing and returning the Purchase Terms Letter) or (ii)
rejects such conditions. If the Seller does not notify the Purchaser of its
acceptance or rejection of such conditions within such two Business Days, the
Seller will be deemed to have rejected such conditions. If the Seller accepts
such conditions, the Prospective Loan will constitute an "Approved Loan" for
purposes of this Agreement, and if the Seller rejects or is deemed to reject
such conditions, the Prospective Loan will constitute a "Rejected Loan" for
purposes of this Agreement.
(e) Upon execution of a Purchase Terms Letter, the Purchaser shall be
committed to purchase such Approved Loan on the terms and conditions of this
Agreement.
(f) The Seller shall provide the Purchaser with a copy of a fully
executed commitment letter between the prospective Borrower and the Seller
within three Business Days after the Seller's receipt of both such fully
executed commitment letter and any deposit required to be paid in connection
therewith.
(g) As soon as reasonably practicable after execution of a Purchase
Terms Letter with respect to any Approved Loan, the Seller, to the extent
applicable, shall cause the prospective Borrower (or other party on behalf of
the Borrower) to complete an environmental questionnaire in the form required by
the Environmental Insurer. As soon as reasonably practicable after receipt of
the executed environmental questionnaire from the prospective Borrower, the
Seller shall deliver a copy of the completed questionnaire to the Purchaser.
With respect to Approved Loans that will not be insured under an Environmental
Policy, the Seller shall deliver to the Purchaser a copy of the Phase I
environmental assessment and any Phase II environmental assessment recommended
thereby as soon as reasonably practicable after receipt thereof.
(h) As soon as reasonably practicable after execution of a Purchase
Terms Letter with respect to any Approved Loan, the Seller will cause to be
conducted a site inspection of the Mortgaged Property proposed to secure the
Approved Loan. The Seller shall cause to be prepared a written report
summarizing the results of such inspection. The Seller shall provide to the
Purchaser a copy of such written report as soon as reasonably practicable after
completion thereof, but in no event later than ten Business Days prior to the
anticipated Closing Date. Within two Business Days after its receipt of the
written inspection report, the Purchaser may notify the Seller whether the
results of such inspection require a reduction of the amount of such Approved
Loan, in which case the Seller shall, within two Business Days after its receipt
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of such notice, notify the Purchaser whether such reduced amount is acceptable
or unacceptable. If such reduced amount is unacceptable to the Seller, such
Approved Loan shall become a "Rejected Loan" for purposes of this Agreement. If
such reduced amount is acceptable, the parties shall execute a Purchase Terms
Amendment reflecting such reduced amount. In the event that the Purchaser does
not respond within such two Business Day period, the Seller shall send a written
notice to the Purchaser requesting a response to the inspection report, and in
the event the Purchaser does not respond within one Business Day after its
receipt of such notice, the Purchaser shall be deemed to have approved the
results of the site inspection.
(i) In the event of a proposed change in any of the material terms of
the Approved Loan set forth in the Purchase Terms Letter, the Seller shall
submit such proposed change for appropriate approvals in accordance with the
Guidelines and Manual. Without limiting the foregoing, any of the changes set
forth on Schedule 2 shall be deemed to be material. To the extent the proposed
change requires the approval of the Seller's investment committee, the Seller
shall provide the Purchaser with a copy of the "internal credit write-up" with
respect to the proposed change and the Purchaser shall be entitled to designate
one or more representatives to participate in the meeting of the investment
committee relating to such proposed change as described in subsection (b) of
this Section 2.03. In the event the Seller approves any proposed material
change, the Seller shall so notify the Purchaser by delivering a Purchase Terms
Amendment substantially in the form of Exhibit B hereto, with a copy of the
Seller's appropriately executed change approval sheet (each, a "Change Approval
Sheet") attached, and, within two Business Days of such notice, the Purchaser
shall execute the Purchase Terms Amendment if it approves of the proposed change
or notify the Seller of its rejection of the proposed change. In the event that
the Purchaser does not respond within such two Business Day period, the
Purchaser shall be deemed to have rejected such proposed change and, unless the
Seller and the prospective Borrower agree not to make such proposed change, such
Loan shall constitute a "Rejected Loan" for purposes of this Agreement.
(j) The Loans will be originated on the Seller's form Loan Documents
in Approved Form, with appropriate variations incorporating the terms of the
Loan Approval Sheet, any Change Approval Sheets and the Final Purchase Terms
Letter, applicable state law requirements and such other terms (not expressly
specified in the Final Purchase Terms Letter, the Loan Approval Sheet or any
Change Approval Sheets) as the Seller determines in its reasonable judgment do
not materially and adversely affect the security and other benefits intended to
be provided to the lender by such Loan Documents; provided, however, that no
variation or change set forth on Schedule 3 may be made to the Approved Form of
the Seller's Loan Documents without notice to and approval of the Purchaser's
legal department.
(k) The Seller shall deliver (electronically or by facsimile) to
Purchaser's Funding Representative, on each Business Day, its Approved Loan
pipeline status report setting forth the anticipated Funding Date for each
Approved Loan for the immediately following 20 days.
(l) Notwithstanding anything in Section 9.01 to the contrary, the
notices and executed documents required to be delivered pursuant to this Section
2.03 shall be delivered by facsimile transmission and overnight courier to
Seller's Representative and Purchaser's Origination Representative (or, in the
case of subclause (j) above, the Purchaser's legal department), as applicable,
at the telecopy number and address specified in Section 9.01 hereof; provided,
however, that for purposes of any notices under this Section 2.03 only, receipt
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shall be deemed to occur upon receipt of the required facsimile transmission at
the applicable telecopy number.
Section 2.04. FUNDING PROCEDURES.
The Purchaser shall purchase each Approved Loan on the date on which such
Approved Loan is closed with the related Borrower (the "Funding Date") or, if
the Seller elects in its sole discretion to close such Approved Loan with its
own funds, on such subsequent date as the Seller may specify by written notice
to the Purchaser, subject only to:
(a) receipt by Purchaser's Funding Representative, not later than 4:00
p.m. (Seattle, Washington time) on the Business Day preceding the Closing Date,
of notice from the Seller substantially in the form of Exhibit L hereto (a
"Funding Notice"), provided, that if such Closing Date changes, the Seller shall
promptly notify Purchaser's Funding Representative by telephone and forward a
revised Funding Notice setting forth the Closing Date as changed; and
(b) receipt by Purchaser's Funding Representative, not later than 4:00
p.m. (Seattle, Washington time) on the Business Day preceding the Closing Date,
of a Trust Receipt executed by the Bailee evidencing that such Bailee is in
possession of the documents required to be delivered under the related Master
Bailee Agreement.
Upon satisfaction of the foregoing conditions, the Purchaser shall pay
the Purchase Price by wire transfer or credit of immediately available funds to
the account(s) designated by the Seller in the Funding Notice (i) not later than
5:00 p.m. (Seattle, Washington time) on the Business Day preceding the Closing
Date if the Seller designates a non-compensating account in the name of the
Title Insurer at Washington Mutual Bank (any such account, a "WMB Account") and
(ii) not later than 10:00 a.m. (Seattle, Washington time) on the Closing Date if
the Seller designates any account other than a WMB Account. In the event the
closing of the sale and purchase of the Approved Loan with the related Borrower
does not occur on the date specified in the related Funding Notice (the "Failed
Closing Date"), the Seller may, at its option, not later than 1:30 p.m.
(Seattle, Washington time) on the Failed Closing Date, return (or cause the
return of) the Purchase Price to the Purchaser by wire transfer of immediately
available funds (in which case the Seller shall have no liability therefor);
provided, however, that in the event the Purchase Price is not being held in a
WMB Account and the Seller for any reason does not (or is unable to) return the
Purchase Price to the Purchaser by such time, the Seller shall pay to the
Purchaser, on demand, interest on the Purchase Price at the greater of (i) the
Purchaser's then applicable cost of funds and (ii) the amount of interest, if
any, collected by the Seller from the related Borrower with respect to such
funds, from the Failed Closing Date through, but not including, the date on
which the Purchase Price is returned to and received by the Purchaser or the
date on which the closing of the Approved Loan with the related Borrower takes
place, which in either case shall not occur more than five Business Days after
the Failed Closing Date (or two Business Days if the Purchase Price is held in a
WMB Account). The Seller shall notify Purchaser's Funding Representative by
telephone no later than noon (Seattle, Washington time) on any day the Seller
proposes to return by wire transfer any Purchase Price payment to the Purchaser.
The Seller's records and computer files shall be appropriately marked
to clearly reflect the sale of the Loans (but not the servicing in respect
thereof) to the Purchaser.
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(c) Notwithstanding anything in Section 9.01 to the contrary, the
notices and executed documents required to be delivered pursuant to this Section
2.04 shall be delivered by facsimile transmission and overnight courier to
Seller's Representative and Purchaser's Funding Representative, as applicable,
at the telecopy number and address specified in Section 9.01 hereof; provided,
however, that for purposes of this Section 2.04 only, receipt shall be deemed to
occur upon receipt of the required facsimile transmission at the applicable
telecopy number.
Section 2.05. DELIVERY OF LOAN DOCUMENTS.
In connection with the sale of a Loan Group to the Purchaser hereunder, the
Seller shall (i) on or before the Closing Date for such Loan Group, deliver the
Recordable Documents (to the extent such Recordable Documents have not
previously been recorded or filed, as applicable, or delivered for recording or
filing, as applicable) to the Bailee for delivery to the title insurance company
that will issue the lender's title insurance policy insuring the lien of the
related Mortgage (the "Title Insurer"), which Title Insurer shall, on or
promptly following the Closing Date, deliver such original documents to the
appropriate public office for recording or filing, as applicable, (ii) cause the
related Bailee to deliver, within three Business Days after the Closing Date for
such Loan Group, the Loan Files to the Purchaser by overnight courier, and (iii)
deliver the original Recordable Documents (to the extent such original documents
are not included in the Loan File delivered by the Bailee pursuant to clause
(ii) of this Section 2.05) to the Purchaser promptly after the Seller receives
the same from the applicable public offices after recording or filing thereof.
The Seller shall deliver to the Servicer all material original documents
related to such Loan Group that are not required to be delivered to the
Purchaser or filed or recorded hereunder and copies of all of the documents
constituting the Loan File (collectively, together with any other documents
maintained by the Servicer with respect to such Loan Group, the "Servicer's Loan
File").
Section 2.06. INDEMNIFICATION BY PURCHASER.
(a) If (i) a Final Purchase Terms Letter has been executed, (ii) the
Seller has satisfied the requirements of Section 2.04 hereof, and (iii) the
Purchaser fails to purchase the related Loans on such Closing Date, the
Purchaser shall indemnify the Seller and its Affiliates and hold them harmless
against any and all claims, losses, damages, penalties, punitive damages, fines,
forfeitures, costs, judgments, and any other costs, fees and expenses (including
the Seller's reasonable legal fees and disbursements) that the Seller or its
Affiliates may sustain and that result from such failure of the Purchaser
(excluding the Seller's lost profits); provided, however, that the Purchaser
shall not be liable to the Seller or its Affiliates pursuant to this Section
2.06(a) if the Purchaser's failure to purchase any Approved Loan resulted from
any material mistake or error in any information contained in the related
Funding Notice provided by the Seller to the Purchaser.
(b) In the event that any action or proceeding shall be commenced or
claim asserted which may entitle the Seller to be indemnified under this
Agreement, the Seller shall give the Purchaser written notice of such action or
claim reasonably promptly after receipt of notice thereof by the Seller. The
Purchaser shall be entitled to participate in and, upon notice to the Seller,
assume the defense of any such action or claim (with counsel reasonably
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acceptable to the Seller) in reasonable cooperation with, and with the
reasonable cooperation of, the Seller. The Purchaser shall not be liable for any
settlement of any such claim or action unless the Purchaser shall have consented
thereto or be in default in its obligations under this Section 2.06(b).
(c) All rights and remedies under this Section 2.06 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 2.07. SERVICING.
Each Loan purchased by the Purchaser under this Agreement shall be serviced
by FFCA pursuant to the terms and conditions of the Servicing Agreement.
Section 2.08. CLOSING COSTS.
In connection with the transfer and delivery of any Loans on any Closing
Date pursuant to the terms of this Agreement, the Purchaser shall pay its
expenses, if any, including the legal fees and expenses of its attorneys. The
Seller shall pay, or shall cause to be paid by third parties, all other costs
and expenses incurred in connection with the transfer and delivery of the Loans,
including without limitation recording fees, the fees of the Bailee (if
applicable), fees for title insurance policy premiums and endorsements, fees for
recording or filing the Recordable Documents and the Seller's attorney's fees
and expenses.
ARTICLE III
RESERVED
ARTICLE IV
CONDITIONS
Section 4.01. EXECUTION DATE.
The delivery by the Seller and the Purchaser of this Agreement shall be
conditioned on the delivery by the other party hereto of duly authorized and
fully executed originals of the following documents applicable to such party or
such party's Affiliate:
(a) this Agreement, including the Pricing Letter;
(b) the Guaranty;
(c) the Servicing Agreement;
(d) the Warrant Agreement, the Warrant and the Registration Rights
Agreement;
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(e) a certificate of the President or any Executive Vice President of
the Seller and the Secretary or an Assistant Secretary of the Seller, in the
form attached hereto as Exhibit D, including all attachments thereto;
(f) a certificate of the President, any Group President, any Vice
Chair or any Senior Executive Vice President or Senior Vice President of the
Purchaser and the Secretary or an Assistant Secretary of the Purchaser, in the
form attached hereto as Exhibit F, including all attachments thereto;
(g) a certificate of the President or any Executive Vice President of
FFCA and the Secretary or an Assistant Secretary of FFCA, in the form attached
hereto as Exhibit E, including all attachments thereto;
(h) an Opinion of Counsel for the Seller and, with respect to the
Servicing Agreement, the Guaranty, the Warrant Agreement, the Warrant and the
Registration Rights Agreement, FFCA, substantially in the form agreed to by the
parties hereto; and
(i) an Opinion of Counsel for the Purchaser, substantially in the form
agreed to by the parties hereto.
Section 4.02. EFFECTIVE DATE.
The effectiveness of this Agreement on the Effective Date is conditioned on
the occurrence of each of the following events and satisfaction of the
conditions in Section 6.02 on or before the Effective Date:
(a) delivery to the Purchaser of a copy of the Guidelines and Manual in
Approved Form;
(b) delivery to the Purchaser of copies of the Seller's form Loan Documents
for Eligible Loans in Approved Form; and
(c) confirmation to the Purchaser that the Employment Agreements have been
duly authorized, executed and delivered by the parties thereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES; REMEDIES
Section 5.01. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
The Seller represents and warrants to the Purchaser as of the date of this
Agreement, and, by delivery of a Funding Notice, the Seller shall be deemed to
represent and warrant as of each related Closing Date, as follows:
(a) The Seller is duly organized, validly existing and in good
standing under the laws of the State of Delaware and is qualified to do business
in all jurisdictions in which Collateral for any of the Loans is located and in
which the failure to so qualify would have a material adverse effect on the
enforceability of such Loan.
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(b) The execution and delivery of this Agreement by the Seller, and
the performance and compliance with the terms of this Agreement by the Seller,
will not violate the Seller's organizational documents or constitute an event
which, with notice or lapse of time or both, would constitute a default under,
or result in the breach of, any material agreement or other instrument to which
the Seller is a party or by which it or its assets are bound.
(c) The Seller has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly authorized
the execution, delivery and performance of this Agreement and has duly executed
and delivered this Agreement.
(d) This Agreement, assuming due authorization, execution and delivery
by the Purchaser, constitutes a valid, legal and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms, subject to
(A) applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally and (B) general
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law.
(e) The Seller is not in violation of, and its execution and delivery
of this Agreement and its performance and compliance with the terms of this
Agreement will not constitute a violation of, any law, any order or decree of
any court or arbiter, or any order, regulation or demand of any federal, state
or local governmental authority, which violation, in the Seller's good faith and
reasonable judgment, is likely to materially and adversely affect either the
ability of the Seller to perform its obligations under this Agreement or the
financial condition of the Seller.
(f) No litigation is pending or, to the Seller's knowledge, threatened
against the Seller that, if determined adversely to the Seller, would prohibit
the Seller from entering into this Agreement or that, in the Seller's good faith
and reasonable judgment, is likely to materially and adversely affect either the
ability of the Seller to perform its obligations under this Agreement or the
financial condition of the Seller.
Section 5.02. REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL LOANS.
Except as set forth in the related Final Purchase Terms Letter and
attachments or as otherwise disclosed to, and approved by, the Purchaser, by
delivery of a Funding Notice the Seller shall be deemed to represent and warrant
to the Purchaser, with respect to each Loan transferred on any Closing Date and
as of that Closing Date, as follows:
(a) Immediately prior to sale to the Purchaser, the Seller has good
and marketable title to, and is the sole owner and holder of, the Loan.
(b) Immediately prior to sale to the Purchaser, the Seller has full
right and authority to sell, assign, transfer and pledge the Loan.
(c) The Seller is transferring the Loan and all legal and beneficial
interest therein to the Purchaser free and clear of any and all liens, pledges,
equities, charges, claims or security interests of any nature encumbering the
Loan and any and all ownership or participation interest therein in favor of any
third party.
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(d) With respect to each Mortgage Loan, the related Servicer's Loan
File includes a survey of each parcel or group of contiguous parcels of real
property encumbered by the related Mortgage, certified to the Seller and its
successors and assigns and to the title insurance company, which is prepared
generally in accordance with minimum standards for surveys as determined by ALTA
or equivalent at the time of origination of such Loan and contains the signature
and seal of a licensed engineer or surveyor affixed thereto.
(e) With respect to each Mortgage Loan, the related assignment of
Mortgage and assignment of leases and rents (if any), constitutes the legal,
valid and binding assignment of the Mortgage and the related assignment of
leases and rents from the Seller. The endorsement of each Note is genuine,
properly endorsed and constitutes the legal, valid and binding assignment of the
Note and, together with the assignment of Mortgage, assignment of leases and
rents (if any) and Xxxx of Sale, legally and validly conveys all right, title
and interest in the subject Loan to the Purchaser.
(f) With respect to each Equipment Loan, the endorsement of the
related Note is genuine, properly endorsed and constitutes the legal, valid and
binding assignment of the Note and, together with the assignment of the Security
Agreement and the Xxxx of Sale, legally and validly conveys all right, title and
interest in the subject Equipment Loan to the Purchaser.
(g) With respect to each Mortgage Loan, the lien of the related
Mortgage is insured by an American Land Title Association form of lender's title
insurance policy or a binding commitment therefor (or a policy on an equivalent
form), insuring the mortgagee, its successors and assigns (A) as to the first
priority lien of such Mortgage on the related Mortgaged Property in the sum of
not less than the original principal amount of the Loan after all advances of
principal and, to the maximum extent available with respect to each Adjustable
Rate Loan, any Negative Amortization that may be payable with respect thereto,
subject only to (1) the lien of current real property taxes, ground rents, water
charges, sewer rents and assessments not yet due and payable or payable but not
yet delinquent, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording which
are acceptable to mortgage lending institutions generally, which are
specifically referred to in the related lender's title insurance policy and
which do not, individually or in the aggregate, materially and adversely affect
the current use, value or marketability of such Mortgaged Property, or which are
insured over by title insurance or are the subject of a Title Matters Indemnity
Agreement contained in the Servicer's Loan File with respect to such Loan and
(3) other matters to which like properties are commonly subject which do not,
individually or in the aggregate, materially interfere with the benefits of the
security intended to be provided by the Mortgage or the current use, value or
marketability of such Mortgaged Property, and (B) to the maximum extent
available with respect to any Adjustable Rate Loan, against any loss by reason
of the invalidity or unenforceability of the lien of the related Mortgage
resulting from any provisions of the related Note providing for interest on
interest, changes in the Interest Rate on such Mortgage Loan or Negative
Amortization with respect thereto. Such policy has all the Required
Endorsements. In the case of a Mortgage Loan for which the Closing Date occurred
on the Funding Date, such policy shall name as insureds in Schedule A thereto
both the Seller and "Washington Mutual Bank, FA, and its successors and assigns,
as their interests may appear." All premiums due for such policy and
endorsements have been paid in full. Such policy is assignable without the
consent of or any notification to the insurer and is in full force and effect.
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No claims have been made by the Seller under such policy and no Person claiming
through the Seller has done, by act or omission, and the Seller does not have
any knowledge of any matter that would impair or diminish the coverage of such
policy;
(h) (i) Any assignment of leases and/or rents and any security
agreement, chattel mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid and
enforceable first lien and first priority security interest on the property
described therein except as enforceability may be limited by (A) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally, (B) general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law) and
(C) applicable state laws, which state laws will not materially interfere with
the practical realization of the principal benefits or security provided
thereby. No person other than the related Borrower and the assignee of said
assignment of leases and rents has any ownership interest in or claim upon rents
and other payments due to Borrower under a lease or other arrangement covered by
said assignment. A UCC-1 Financing Statement with respect to all property
subject to such assignment of leases and/or rents has been filed and/or recorded
(or sent for filing and/or recording promptly following the Closing Date) in all
places necessary to perfect a valid first priority lien thereon.
(ii) With respect to each Equipment Loan, all Equipment subject
to the related Security Agreement is the subject of a UCC-1 Financing Statement
filed and/or recorded (or sent for filing and/or recording promptly following
the Closing Date) in all places necessary to perfect a valid first priority lien
thereon or, to the extent the related Equipment is securities or other
instruments, the Seller has a valid first priority lien thereon perfected by
possession.
(i) In reliance on the Borrower's counsel's opinion contained in the
Servicer's Loan File, if any, and the Title Policy contained in the Loan File,
with respect to each Mortgage that is a deed of trust, a trustee, duly qualified
under applicable law to serve as such, has either been properly designated and
currently so serves or may be substituted in accordance with applicable law.
Except in connection with a trustee's sale or as otherwise required by
applicable law, after default by the Borrower, no fees or expenses are payable
to such trustee.
(j) The information set forth in the Loan Schedule for such Loan is
true, correct and complete in all material respects.
(k) The Loan has been originated in accordance with all applicable law
and the Guidelines and Manual, and the Loan has been documented in accordance
with Section 2.03(j).
(l) To the extent the Funding Date of the Loan is prior to the related
Closing Date, the Loan has been serviced in accordance with applicable law, the
terms of the related Loan Documents and the Servicing Standard.
(m) To the extent the Funding Date of the Loan is prior to the related
Closing Date, since the Funding Date, the terms of the related Note, Mortgage,
if applicable, Security Agreements, if applicable, guaranties (if any) and other
agreements and instruments in the Loan File have not been impaired, waived,
modified, altered, satisfied, canceled or subordinated by the Seller in any
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respect, except, in each of the foregoing instances, (i) by written instruments
that are a part of the Loan File, recorded or filed in the applicable public
office if necessary to maintain the priority of the lien of the related
Mortgage, if applicable, and Security Agreements, if applicable, delivered to
the Purchaser or its designee and (ii) to the extent the Purchaser's approval
with respect to such matters would have been required under Section 2.03(i) or
2.03(j), with the Purchaser's consent.
(n) No fraud, error, omission, misrepresentation or negligence with
respect to the origination of the Loan has taken place on the part of the
Seller.
(o) The Loan is not a participation interest in a loan, but is a whole
loan, and the Seller does not own and is not entitled to own any equity interest
in the Borrower.
(p) No taxes, ground rents, water charges, sewer rents, insurance
premiums, governmental assessments (including the current portion of assessments
payable in future installments) or other charges affecting the related
Collateral that, prior to the related Closing Date, became due and owing in
respect of such Collateral, are delinquent.
(q) Any escrow deposits and payments relating to the Loan are under
the control of the Seller or Servicer and any amounts required to be deposited
by the Borrower have been deposited.
(r) There is no material default, breach, violation or event of
acceleration on the part of the related Borrower existing under the related
Mortgage or Security Agreement or the related Note, and to the extent the
Funding Date of the Loan is prior to the related Closing Date, no event which,
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration occurred during the period
between the Funding Date and the Closing Date. The related Borrower for such
Loan has not asserted any right of rescission, offset, defense, counterclaim, or
abatement with respect to obligations under the Loan. To the extent the Funding
Date of the Loan is prior to the related Closing Date, the Seller has not waived
any material default, breach, violation or event of acceleration of any of the
foregoing during the period between the Funding Date and the Closing Date and,
pursuant to the terms of the related Mortgage or Security Agreement or the
related Note, no person or party other than the holder of such Note may declare
any event of default or accelerate the related indebtedness under either of such
Mortgage or Note.
(s) To the best of the Seller's knowledge, (i) there is no pending
total or partial condemnation of the related Mortgaged Property; (ii) the
Collateral is free and clear of any damage or waste that would materially and
adversely affect its current use or its value or marketability as security for
the Loan; and (iii) the related Collateral is in good repair (reasonable wear
and tear excepted) and has not been materially damaged by fire, wind or other
cause, except for damage which (in the case of (ii) and (iii)) has not been
fully repaired but for which insurance proceeds have been received or are
reasonably expected to be received.
(t) With respect to each Mortgage Loan, none of the improvements that
are, or are intended to be, security for the Mortgage Loan lie outside of the
boundaries and building restriction lines of the Mortgaged Property except for
(i) immaterial encroachments therefrom and (ii) those material encroachments
insured over by title insurance or which are the subject of a Title Matters
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Indemnity Agreement contained in the Servicer's Loan File with respect to such
Mortgage Loan.
(u) To the extent the Funding Date of the Loan is prior to the related
Closing Date, the Loan is not delinquent in payment of principal or interest and
has not been delinquent during the period between the Funding Date and the
Closing Date.
(v) The Seller has received an opinion of counsel to the effect that
all parties (other than the Seller) to the related Note, Mortgage or Security
Agreement, and any related agreements or guaranties had the power, authority and
(except for Loans with respect to which the related Borrower is an individual)
legal capacity to enter into, execute and deliver the same, and such Note,
Mortgage or Security Agreement, related agreements and guaranties, if any, have
been duly and properly executed and delivered by all parties (other than the
Seller) and such documents constitute the legal, valid and binding obligations
of such parties, enforceable against them in accordance with their respective
terms, subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
generally and (B) general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(w) In connection with each Loan, the related Note, Mortgage or
Security Agreement and other agreements executed in connection therewith:
(i) have been completed in compliance with, or are exempt from,
applicable state, federal and local laws and rules and regulations applicable to
the Seller relating to the origination of and performance under the Loan,
including, without limitation, usury, land sales, the offer and sale of
securities and equal credit opportunity or disclosure, the Federal
Truth-in-Lending Act, the Real Estate Settlement Procedure Act and other
consumer protection laws and neither origination of such Loan nor consummation
of the transactions contemplated hereby involved or will involve the violation
of any such laws by the Seller; and
(ii) have been (to the best of the Seller's knowledge based
solely on an opinion of counsel to the same effect delivered on behalf of the
related Borrower) duly authorized, executed and delivered;
(iii) are enforceable in accordance with their respective terms,
without defense, offset, counterclaim or right of rescission, except as
enforcement may be limited by (A) bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally, (B)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and (C) applicable state laws,
which state laws will not materially interfere with the practical realization of
the principal benefits or security provided thereby.
(x) The Loan is not cross-collateralized or cross-defaulted with any
obligation other than a Loan, and then only to the extent identified in the
Final Purchase Terms Letter and attachments related to such Loan. For each
Corporate Secured Loan, the related Borrower's obligations thereunder are
cross-defaulted with such Borrower's obligations under the Mortgage Loans and
the Equipment Loans (if any) associated with such Corporate Secured Loan. Every
Mortgage Loan, Equipment Loan and Corporate Secured Loan with which the Loan is
cross-collateralized or cross-defaulted has been sold and transferred, or is
being sold and transferred to the Purchaser, prior to or concurrently with the
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transfer of such Loan. No Fixed Charge Coverage Ratio applicable to the related
Borrower is calculated with reference to income or expenses of any premises
other than a Mortgaged Property related to a Loan.
(y) To the best of the Seller's knowledge, the related Borrower is not
a debtor in any state or federal bankruptcy or insolvency proceeding.
(z) The Mortgage or Security Agreement, as the case may be, prohibits
any further pledge or lien on the Collateral, whether equal or subordinate to
the lien of the Mortgage or Security Agreement, as the case may be, without the
prior written consent of the holder. No such consent has been given.
(aa) All Collateral is located within one of the 50 United States or
the District of Columbia.
(bb) With respect to each Loan for which the related Borrower has (i)
a leasehold interest in one or more parcels of real estate and a fee simple
interest in the buildings and improvements located thereon, or (ii) a leasehold
interest in one or more parcels of real estate and the buildings and
improvements located thereon:
(i) the lease, or a memorandum thereof, has been recorded, and
either any provisions of such lease that prohibit the related leasehold estate
to be mortgaged have been waived or the lessor has consented to the Mortgage as
a leasehold mortgage;
(ii) the lease or the related estoppel certificate provides that
the Borrower's interest in such lease is assignable to successors and assigns of
the mortgagee with the consent of the lessor thereunder, which consent shall not
be unreasonably withheld;
(iii) the lessor has delivered an estoppel certificate stating
that at the date of delivery of such estoppel certificate, the lease is in full
force and effect and no default has occurred under such lease nor is there any
existing condition which, but for the passage of time or the giving of notice,
or both, would result in a default thereunder;
(iv) the mortgagee under the lease is permitted a reasonable
opportunity to cure any default under such lease which is curable after the
receipt of notice of such default before the lessor thereunder may terminate
such lease;
(v) the lease or applicable estoppel certificate provides that in
the event of a termination of the lease, whether as a result of a bankruptcy of
the related Borrower or otherwise, that the lessor thereunder will enter into a
new lease with the mortgagee or its assignee, on substantially the same terms
and conditions as the lease, provided that the mortgagee or its assignee cures
any defaults thereunder which are capable of being cured by the mortgagee or its
assignee;
(vi) the lease or applicable estoppel certificate permits, in the
event of a default by the related Borrower, a change in the use of the related
Mortgaged Property with the consent of the lessor, which consent may not be
unreasonably withheld;
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(vii) the lease or applicable estoppel certificate contains a
covenant or agreement that the lessor thereunder is not permitted, in the
absence of an uncured default, to disturb the possession, interest or quiet
enjoyment of any lessee in the relevant portion of the Mortgaged Property for
any reason, and a nondisturbance agreement exists that contains similar
covenants or agreements which are binding on any mortgagees of such lessor;
(viii) the lease has an original term that, together with any
term or terms for which such lease may be renewed or extended by the related
Borrower, extends to not earlier than the fifth anniversary of the stated
maturity date of the related Loan.
(cc) (i) Each Loan secured by Mortgaged Property at which petroleum
products are sold or distributed is insured under an Environmental Policy; and
(ii) Subject to clause (i) above, with respect to each Mortgage
Loan and, to the extent applicable, each Corporate Secured Loan, either (A) the
related Mortgaged Property is insured under an Environmental Policy or (B) (x) a
Phase I environmental assessment was conducted with respect to the related
Mortgaged Property that concluded that no further investigation was necessary or
(y) if such Phase I environmental assessment recommended further investigation,
a Phase II environmental assessment was performed, and such Phase II
environmental assessment concluded that no remediation or further action was
required with respect to the related Mortgaged Property.
(dd) With respect to each Equipment Loan, the related Security
Agreement creates a valid, existing and enforceable first priority security
interest in the related Equipment and, to the extent applicable, upon filing in
the appropriate public office, such security interest is perfected as a first
priority security interest under the UCC.
(ee) (i) With respect to each Loan that is not identified as an
Adjustable Rate Loan on the Loan Schedule, the Interest Rate with respect
thereto is fixed throughout the term to maturity of such Loan.
(ii) With respect to each Loan that is an Adjustable Rate Loan,
the Interest Rate is subject to adjustment on the first day of each calendar
month to equal the sum of LIBOR (as defined in the related Loan Documents) for
such date and a fixed percentage, subject to a maximum rate and minimum rate in
accordance with the terms thereof. Unless such Loan is a Balloon Loan, the
initial amount of the Monthly Payment related to each Adjustable Rate Loan will
fully amortize the original Principal Balance of such Loan over its original
term to maturity at the initial Interest Rate thereon. The Monthly Payments on
each such Loan will be equal to such amount until the first Payment Reset Date
for such Loan, at which time, and on each succeeding Payment Reset Date
thereafter, the amount of the Monthly Payments to be paid by the related
Borrower will be adjusted for the next succeeding Payment Period to an amount
that, except with respect to any Balloon Loan, will fully amortize the Principal
Balance of such Loan on such Payment Reset Date at the Interest Rate for such
Loan as determined on each December 15th prior to the next Payment Period over
its remaining term to maturity. The amount of interest accrued on each of the
Adjustable Rate Loans will be calculated based on a 360-day year and the actual
number of days elapsed. Any Negative Amortization will be added to the Principal
Balance of such Loan on such Due Date. If the Principal Balance of any
Adjustable Rate Loan exceeds the product of the related Negative Amortization
Cap and the original Principal Balance thereof after adding any Negative
Amortization thereto, the related Borrower will be required to prepay such Loan
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on the immediately succeeding Due Date in an amount equal to the difference
between such Principal Balance and such original principal balance. All
adjustments to the Interest Rate on any Adjustable Rate Loan have been made in
compliance with the terms of applicable law and the related Note.
(ff) After giving effect to the purchase of such Loan by the
Purchaser, no Single Borrower Group Concentration exceeds the Single Borrower
Group Concentration Limit.
(gg) With respect to each Mortgage Loan, the Seller has not satisfied,
canceled, rescinded or subordinated the Mortgage in whole or in part, released
the Mortgaged Property in whole or in part from the lien of the Mortgage, or
executed any instrument that would effect any such satisfaction, cancellation,
rescission, subordination or release. Except as provided in the related Loan
Documents in Approved Form or otherwise approved by the Purchaser, the terms of
the Mortgage do not provide for a release of any portion of the Mortgaged
Property from the lien of the Mortgage except upon payment in full of all
obligations under the related Note.
(hh) With respect to each Mortgage Loan insured under an Environmental
Policy, except as disclosed to the Purchaser in writing or as disclosed in the
environmental questionnaire completed by the related Borrower (or other party on
behalf of the Borrower), in each case prior to the Funding Date of such Loan,
the Seller has no actual knowledge of any Pollution Condition on or under the
Mortgaged Property securing such Loan.
(ii) To the best of the Seller's knowledge after due inquiry, (i) the
Mortgaged Property is in material compliance with applicable zoning ordinances
affecting such Mortgaged Property for its current use and (ii) any nonconformity
with zoning laws constitutes a legal non-conforming use or structure which, in
the event of casualty or destruction, may be restored or repaired to the full
extent of the use or structure at the time of such casualty, or for which law
and ordinance insurance coverage has been obtained in amounts customarily
required by prudent commercial mortgage lenders. To the best of the Seller's
knowledge, (i) the Mortgaged Property is in material compliance with applicable
laws, rules, covenants and restrictions affecting the occupancy, use and
operation of such Mortgaged Property for its current use, and (ii) all material
licenses and certificates, including certificates of occupancy, whether by law,
ordinance, regulation or insurance standards, required to be obtained with
regard to the operation of a Chain Store Facility at the Mortgaged Property,
have been obtained and are in full force and effect.
(jj) For each Loan, the related Borrower has obtained and has in full
force and effect insurance policies providing coverages of the types and in the
amounts required by the Loan Documents, and the Seller has received and included
in the Loan File the certificates of insurance to be provided by Borrower
pursuant to the Loan Documents prior to or on the Closing Date.
Section 5.03. DEFECT, BREACH, CURE AND REPURCHASE; INDEMNITY.
(a) Within 90 days of being notified that, with respect to any Loan,
there is a Document Defect or breach of any of the representations or warranties
contained in Sections 5.01 or 5.02 (a "Breach"), which materially and adversely
affects the interests of the Purchaser in such Loan (a "Defective Loan"), the
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Seller shall, subject to subsection (b) below, (i) promptly cure (or cause to be
cured) to the reasonable satisfaction of the Purchaser such Document Defect or
Breach or (ii) repurchase such Defective Loan at the related Repurchase Price by
wire transfer of funds to the account designated by the Purchaser, provided,
that if such Document Defect or Breach is capable of being cured but not within
such 90-day period, the Seller shall have commenced during such 90-day period
and is diligently proceeding with the cure of such Document Defect or Breach and
the Seller shall have delivered to the Purchaser a certification executed on its
behalf by one of its officers setting forth the reason such Document Defect or
Breach is not capable of being cured within such 90-day period and what actions
the Seller is pursuing in connection with the cure thereof, and stating that the
Seller anticipates that such Document Defect or Breach will be cured within an
additional period not to exceed 90 days, then the Seller shall have an
additional 90 days to complete such cure.
(b) It shall be a condition precedent to any repurchase of a Defective
Loan by the Seller that such instruments of transfer or assignment as shall be
necessary to vest in the Seller the legal and beneficial ownership of such
Defective Loan (including any property acquired in respect thereof) shall be
executed and delivered to the Seller on the forms presented by the Seller, in
each case without recourse except with respect to reasonable and customary
representations and warranties of the Purchaser set forth in such forms.
(c) The Seller shall indemnify the Purchaser and hold it harmless from
and against any and all claims against the Purchaser or any of its Affiliates by
any Person or governmental entity, including all losses, damages, penalties,
punitive damages, fines, forfeitures, costs, judgments and any other costs, fees
and expenses (including the Purchaser's reasonable legal fees and
disbursements), that arise out of or relate to any Document Defect or Breach
with respect to any Defective Loan.
(d) In the event that any action or proceeding shall be commenced or
claim asserted which may entitle the Purchaser to be indemnified under this
Agreement, the Purchaser shall give the Seller written notice of such action or
claim reasonably promptly after receipt of notice thereof by the Purchaser. The
Seller shall be entitled to participate in and, upon notice to the Purchaser,
assume the defense of any such action or claim (with counsel reasonably
acceptable to the Purchaser) in reasonable cooperation with, and with the
reasonable cooperation of, the Purchaser. The Seller shall not be liable for any
settlement of any such claim or action unless the Seller shall have consented
thereto or be in default in its obligations under this Section 5.03(d).
(e) The obligations of the Seller set forth in this Section 5.03
constitute the sole remedies available to the Purchaser with respect to any
Document Defect or Breach, except in the case of fraud.
Section 5.04. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser represents and warrants to the Seller as of the date of this
Agreement, and shall be deemed to restate as of each Closing Date, as follows:
(a) The Purchaser is a federally chartered savings and loan
association, duly organized, validly existing and in good standing under the
laws of the United States and is qualified to do business in all jurisdictions
in which such qualification is necessary to protect the validity and
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enforceability of this Agreement and to perform its obligations under this
Agreement.
(b) The execution and delivery of this Agreement by the Purchaser, and
the performance and compliance with the terms of this Agreement by the
Purchaser, will not violate the Purchaser's organizational documents or
constitute an event which, with notice or lapse of time or both, would
constitute a default under, or result in the breach of, any material agreement
or other instrument to which the Purchaser is a party or by which it is bound.
(c) The Purchaser has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, has duly authorized
the execution, delivery and performance of this Agreement and has duly executed
and delivered this Agreement.
(d) This Agreement, assuming due authorization, execution and delivery
by the Purchaser, constitutes a valid, legal and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
subject to (A) applicable bankruptcy, insolvency, reorganization, moratorium,
conservatorship, receivership and other laws affecting the enforcement of
creditors' rights generally and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law.
(e) The Purchaser is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order or decree
of any court or arbiter, or any order, regulation or demand of any federal,
state or local governmental authority, which violation, in the Purchaser's good
faith and reasonable judgment, is likely to materially and adversely affect
either the ability of the Purchaser to perform its obligations under this
Agreement or the financial condition of the Purchaser.
(f) No litigation is pending or, to the Purchaser's knowledge,
threatened against the Purchaser that, if determined adversely to the Purchaser,
would prohibit the Purchaser from entering into this Agreement or that, in the
Purchaser's good faith and reasonable judgment, is likely to materially and
adversely affect either the ability of the Purchaser to perform its obligations
under this Agreement or the financial condition of the Purchaser.
ARTICLE VI
COVENANTS OF THE SELLER
Section 6.01. CONTINUING EXISTENCE OF THE SELLER.
The Seller will keep in full effect its existence, rights and franchises as
a corporation under the laws of the state of its incorporation, except in
connection with any consolidation or merger, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Loans, and to perform its duties
under this Agreement.
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The Seller will obtain and preserve in full effect each license to
originate and sell commercial loans in each jurisdiction in which such licenses
are or shall be necessary to protect the validity and enforceability of this
Agreement, or any of the Loans, and to perform its duties under this Agreement.
Section 6.02. ASSIGNMENT OF RIGHTS; DELEGATION OF DUTIES.
The Seller shall not assign, including by operation of law, this Agreement
or delegate its rights or duties hereunder or any portion hereof (other than to
FFCA or to one or more Affiliates of FFCA or the Seller) except (i) in
connection with a merger or consolidation that does not result in an Early
Termination of this Agreement due to a Change of Control of the Seller, or (ii)
with the prior written approval of the Purchaser. For the avoidance of doubt,
the Seller shall be permitted to assign this Agreement to one or more
wholly-owned subsidiaries of FFCA or one or more nonqualified real estate
investment trust subsidiaries of FFCA at least 95% of the capital stock of which
is owned by FFCA. In the event of any such assignment, the assigning Seller
shall be released from liability under this Agreement and shall have no further
obligations under this Agreement from and after the date of such assignment;
provided, however, that, in connection with any such assignment, the party to
whom this Agreement is assigned shall have first delivered to the Purchaser an
officer's certificate and an Opinion of Counsel in substantially the same form
as the officer's certificate and Opinion of Counsel delivered by the Seller
under Sections 4.01(e) and (g), respectively, and, if requested by the
Purchaser, a reaffirmation by FFCA of the Guaranty.
Section 6.03. SECURITIZATION.
In connection with any proposed securitization or sale of any Loans, the
Seller hereby agrees to cooperate fully (at the Purchaser's expense) with the
Purchaser and any prospective purchaser with respect to all reasonable requests
and due diligence procedures including participating in meetings with rating
agencies, bond insurers and such other parties as the Purchaser shall designate
and participating in meetings with prospective purchasers of the Loans or
interests therein and providing information reasonably requested by such
purchasers.
Section 6.04. ENVIRONMENTAL INSURANCE.
(a) With respect to each Loan insured under an Environmental Policy,
the Seller shall obtain coverage under such Environmental Policy (on a per
occurrence basis) in an amount not less than the original principal amount of
such Loan. In no event shall more than $100 million in aggregate principal
balance of Loans be insured under any Environmental Policy with an aggregate
coverage limit (based on losses incurred in respect of any other Loan) of less
than $35 million, without the consent of the Purchaser. The Seller will
cooperate (at the Purchaser's cost and expense) with the Purchaser in connection
with the periodic assessment of the composition of any pool or pools of insured
Loans and, at the Purchaser's discretion, any request to the Environmental
Insurer to reconfigure one or more pools of insured Loans so as to diversify the
types of Mortgaged Property within any pool of Loans insured under a single
Environmental Policy.
(b) Promptly following any modification of or amendment to any
Environmental Policy (or any endorsement thereto) pursuant to Section 6.04(c)
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below, the Seller shall deliver to the Purchaser the original documentation
evidencing such modification or amendment.
(c) No modifications or amendments to the Approved Form of any
Environmental Policy or any endorsements thereto, including without limitation
any change to the coverage limits, shall be made without the approval of the
Purchaser.
Section 6.05. PROVISION OF INFORMATION.
(a) The Seller shall afford to the Purchaser, and to the FDIC and any
other regulatory authority that may exercise authority over the Purchaser,
access to any records regarding the Loans, FFCA and the Seller reasonably
required by the Purchaser and within the Seller's control, except to the extent
it is prohibited from doing so by applicable law or contract or to the extent
such information is subject to a privilege under applicable law. Such access
shall be afforded without charge but only upon reasonable prior written request
and during normal business hours at the offices of the Seller.
(b) The Seller will provide the Purchaser with copies of (i) any
proposed changes to the Guidelines and Manual as soon as reasonably practicable
after such changes are proposed and (ii) the Seller's annual analysis of Chain
Store Facility concepts.
Section 6.06. INTEREST CALCULATIONS.
The Seller shall convert its systems and documentation to provide, with
respect to Prospective Loans bearing a fixed rate of interest submitted to the
Purchaser for approval on or after July 1, 2000, for the calculation of interest
on such Loans to be based on a 360-day year and the actual number of days
elapsed.
ARTICLE VII
COVENANTS OF THE PURCHASER
Section 7.01. CONTINUING EXISTENCE OF THE PURCHASER.
The Purchaser will keep in full effect its existence, rights and franchises
as a federally chartered savings and loan association, except in connection with
any consolidation or merger, and will obtain and preserve its qualification to
do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Loans, and to perform its duties under this Agreement.
The Purchaser will obtain and preserve in full effect each license to
purchase, own and sell commercial loans in each jurisdiction in which such
licenses are or shall be necessary to protect the validity and enforceability of
this Agreement and to perform its duties under this Agreement.
Section 7.02. ASSIGNMENT OF RIGHTS; DELEGATION OF DUTIES.
The Purchaser shall not assign, including by operation of law, this
Agreement or delegate its rights or duties (other than to an Affiliate of the
Purchaser) hereunder or any portion hereof except (i) in connection with a
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merger or consolidation that does not result in an Early Termination of this
Agreement due to a Change of Control of the Purchaser, or (ii) with the prior
written approval of the Seller.
Section 7.03. CONFIDENTIALITY.
(a) The Purchaser shall not use, or permit any of its Affiliates to
use, directly or indirectly, any Seller Proprietary Information to compete with
the Seller or its Affiliates in a manner that gives the Purchaser or its
Affiliates a competitive advantage over the Seller and its Affiliates that the
Purchaser or its Affiliates would not have had but for the use of such Seller
Proprietary Information. All Seller Proprietary Information shall remain the
property of the Seller. Upon the Seller's demand, the Purchaser shall deliver to
the Seller any documents or records (whether in physical or electronic form)
containing or comprising Seller Proprietary Information other than documents or
records contained in any Loan Files.
(b) The Purchaser agrees not to disclose, or permit any of its
Affiliates to disclose, to any person or entity (other than to an Affiliate and
to its or any Affiliate's attorneys and accountants) any confidential
information relating to the business of the Seller or any of its Affiliates and
obtained by the Purchaser in the course of the transactions contemplated
hereunder, without the prior written consent of the Seller, or until such
information ceases to be confidential. Notwithstanding the foregoing, the
Purchaser shall not be precluded from making disclosures (i) pursuant to
compulsory legal process or when otherwise required by an appropriate
governmental agency, or to comply with applicable legal or regulatory
requirements, (ii) where the information disclosed was or becomes generally
available to the public other than as a result of a disclosure by the Purchaser
or (iii) in connection with any litigation or arbitration arising out of or
relating to this Agreement, the Servicing Agreement, the Guaranty or any Loan.
(c) Notwithstanding any provision of this Agreement to the contrary,
in the event the Purchaser breaches any of its covenants under this Section
7.03, the Seller shall be entitled to commence litigation and pursue any and all
remedies available at law or in equity, including, without limitation,
injunctive relief.
Section 7.04. PROVISION OF INFORMATION.
The Purchaser shall afford to the Seller, FFCA and any regulatory authority
that may exercise authority over the Seller or FFCA, access to any records
regarding the Loans or the Purchaser reasonably required by the Seller and
within the Purchaser's control, except to the extent it is prohibited from doing
so by applicable law or contract or to the extent such information is subject to
a privilege under applicable law. Such access shall be afforded without charge
but only upon reasonable prior written request and during normal business hours
at the offices of the Purchaser.
Section 7.05. PREPAYMENT CHARGES AND YIELD MAINTENANCE PREMIUMS.
The Purchaser shall pay (or cause to be paid) to the Seller 50% of all
Qualified Prepayment Charges and Qualified Yield Maintenance Premiums collected
with respect to the Loans promptly after receipt thereof, which, for so long as
FFCA or an Affiliate is the Servicer, shall be withdrawn by the Servicer from
the Collection Account for payment to the Seller in accordance with Section
3.05(a) of the Servicing Agreement. The Purchaser shall not waive the portion of
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any Qualified Prepayment Charges or Qualified Yield Maintenance Premium to which
the Seller is entitled without the consent of the Seller.
ARTICLE VIII
TERMINATION
Section 8.01. AGREEMENT TERM; TERMINATION.
(a) The term of this Agreement (the "Agreement Term") shall begin on
the Effective Date and shall end upon the earlier of (i) the Expiration Date and
(ii) the declaration of an Early Termination (such date, the "Termination
Date").
(b) The "Expiration Date" shall be December 31, 2002, provided that
such date shall be extended until December 31, 2003 and December 31, 2004, in
each case, upon the written agreement of the parties not less than 90 days prior
to any such extension date.
(c) Each of the following shall constitute a "Seller Termination
Event":
(1) if the Purchaser rejects 25% or more of the number of Loan
Proposals submitted to it for approval hereunder during any two consecutive
calendar quarters with respect to Prospective Loans approved by the Seller's
investment committee and with respect to which the Seller does not have
reasonable basis to believe such loans would not be in compliance with the terms
of this Agreement, including the applicable representations and warranties set
forth in Section 5.02, on the anticipated closing date for such loans. For the
purposes of this clause, the Purchaser's offer to purchase a different principal
amount of any Excess Concentration Loan than the principal amount offered by the
Seller pursuant to Section 2.01 shall be deemed a rejection of the related Loan
Proposal, unless the Seller accepts such offer;
(2) if there is a Change of Control of (i) FFCA (whether or not
consented to by the Purchaser), (ii) the Purchaser or (iii) WMI;
(3) if there are changes in tax, accounting or other regulatory
requirements for real estate investment trusts, generally, or which are
applicable to FFCA and/or the Seller, specifically, that have a material adverse
effect on FFCA or on the Seller's ability to perform its obligations under this
Agreement, provided that the Seller shall use reasonable efforts to change, or
obtain a waiver, exemption or other relief from, any such tax, accounting or
regulatory requirement;
(4) if there is a material adverse change in the financial
condition of the Purchaser that is reasonably likely to have a material adverse
effect on the Purchaser's ability to perform its obligations under this
Agreement;
(5) if the Seller elects to terminate this Agreement pursuant to
Section 2.02(b);
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(6) if the Purchaser intentionally or willfully breaches its
obligation to purchase an Approved Loan pursuant to Section 2.04 on more than
two occasions during the Agreement Term; or
(7) if the Servicing Agreement is terminated.
(d) Each of the following shall constitute a "Purchaser Termination
Event":
(1) if there is a Change of Control of (i) the Seller, (ii) FFCA,
(iii) the Servicer (if an Affiliate of FFCA), (iv) the Purchaser (whether or not
consented to by the Seller) or (v) WMI (whether or not consented to by the
Seller);
(2) if there are changes in capital and other regulatory
requirements for banking and thrift organizations, generally, or which are
applicable to the Purchaser, specifically, that have a material adverse effect
on the Purchaser's ability to perform its obligations under this Agreement;
provided that the Purchaser shall use reasonable efforts to change, or obtain a
waiver, exemption or other relief from, any such capital or other regulatory
requirement;
(3) if there is a material adverse change in the financial
condition of the Seller or FFCA that is reasonably likely to have a material
adverse effect on the ability of the Seller to perform its obligations under
this Agreement or the Seller's ability to originate loans that satisfy the
requirements of Section 2.01;
(4) if the Purchaser elects to terminate this Agreement pursuant
to Section 2.02(b);
(5) if the Seller intentionally or willfully breaches its
obligation to present Loan Proposals to the Purchaser pursuant to the second
paragraph of Section 2.01 on more than two occasions during the Agreement Term;
or
(6) if the Servicing Agreement is terminated pursuant to Section
8.02(a) thereof.
Upon the occurrence of any Seller Termination Event, the Seller shall
have the right to declare an "Early Termination" and terminate this Agreement.
Upon the occurrence of any Purchaser Termination Event, the Purchaser shall have
the right to declare an "Early Termination" and terminate this Agreement.
(e) Notwithstanding the expiration of the Agreement Term or earlier
termination of this Agreement, the rights and obligations of the parties under
Sections 2.02(a), 2.06, 2.07 (unless the Servicing Agreement is also terminated
in accordance with its terms), 5.03, 7.03, 7.05 and 9.10 shall survive.
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ARTICLE IX
MISCELLANEOUS
Section 9.01. NOTICES.
Except as otherwise expressly set forth in this Agreement, all demands,
notices and communications hereunder shall be in writing and shall be deemed to
have been duly given if (i) delivered personally, mailed by overnight courier or
registered or certified mail, return receipt requested, or (ii) transmitted by
telecopy (with a copy delivered by overnight courier) at the address as follows:
(a) if to the Seller:
FFCA Acquisition Corporation
The Perimeter Center
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Executive Vice President and General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Purchaser:
Washington Mutual Bank, FA
Mailstop: WMT-1020
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Senior Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or, if to the Purchaser's legal department:
Attention: Xxxxxxxxx X. Xxxxxxx, Esq.
Senior Vice President and Associate General Counsel
Mailstop: WMT-1706
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
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Section 9.02. SEVERABILITY CLAUSE.
Any part, provision, representation or warranty 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 or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
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 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 which prohibits or renders void or
unenforceable any provision hereof. If the invalidity of any part, provision,
representation or warranty of this Agreement shall deprive any party of the
economic benefit intended to be conferred by this Agreement, the parties shall
negotiate, in good faith, to develop a structure that, as nearly as possible,
has the same economic effect as does this Agreement without regard to such
invalidity.
Section 9.03. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 9.04. GOVERNING LAW.
The Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with the laws of the State of New York.
Section 9.05. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of and be enforceable by
the Seller and the Purchaser and the respective successors and permitted assigns
of the Seller and the Purchaser.
Section 9.06. WAIVERS.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
Section 9.07. EXHIBITS AND SCHEDULES.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 9.08. GENERAL INTERPRETIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
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(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Sections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
Section 9.09. FURTHER AGREEMENTS.
The Seller and the Purchaser each agree to execute and deliver to the other
such reasonable and appropriate additional documents, instruments or agreements
as may be necessary or appropriate to effectuate the purposes of this Agreement.
Section 9.10. DISPUTE RESOLUTION.
The Seller and the Purchaser have the right to seek to join or implead the
other party hereto in any action commenced by a third party which may give rise
to a claim under Sections 2.06, 5.03(c) or 5.03(d) of this Agreement, and the
Seller shall have the right to commence litigation against the Purchaser and/or
any Affiliate at any time concerning any controversy or claim arising out of or
related to Section 7.03 of this Agreement (any such dispute under the foregoing
enumerated Sections, the "Excluded Disputes"). Accordingly, the Seller and the
Purchaser intend the following provisions to apply only to any other controversy
or claim arising out of or related to this Agreement or the breach or validity
thereof (a "Covered Dispute").
(a) Mediation. If a Covered Dispute has not been resolved by
negotiation in the ordinary course, either party may give notice to the other
party of its request for mediation, in which event the parties shall attempt in
good faith to resolve the Covered Dispute by confidential mediation under the
CPR Mediation Procedure in effect as of the date of this Agreement before
resorting to arbitration in accordance with subsection (b) below. If the parties
are unable to agree upon a mediator, the mediator shall be selected as provided
in paragraph 2 of the CPR Mediation Procedure. The mediator shall be an attorney
with a minimum of 15 years experience in banking and/or commercial law and shall
have mediated at least five commercial disputes over a period of not less than
three years. The location of any mediation shall alternate between Seattle,
Washington and Scottsdale, Arizona, with the first of any such mediation (and
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all related sessions) to be held until its conclusion in Seattle, Washington and
with the next mediation (and all related sessions) to be held until its
conclusion in Scottsdale, Arizona and so on.
(b) Arbitration. If a Covered Dispute is not resolved through
mediation within 30 Business Days after notice of the request for mediation has
been given, such Covered Dispute shall be resolved by binding arbitration in
accordance with this Agreement, and to the extent not inconsistent herewith, in
accordance with the CPR Non-Administered Arbitration Rules in effect as of the
date of this Agreement ("CPR Arbitration Rules"). Such arbitration shall be
commenced by one party giving notice to the other party; provided, however, that
if one party has requested the other to participate in mediation and the other
has failed to participate, the requesting party may initiate arbitration before
the expiration of such 30 Business Day period. The parties hereby confirm that
the arbitration tribunal has no authority to amend this Agreement in any
respect.
(c) Notwithstanding any provision of the CPR Arbitration Rules to the
contrary:
(i) For all Covered Disputes concerning (in whole or in part) any
controversy or claim arising out of or related to Article VIII of this
Agreement, or the breach or validity thereof (a "Termination-Related Covered
Dispute"), the arbitration tribunal shall consist of three arbitrators each of
whom shall be an attorney with a minimum of 15 years experience in banking
and/or commercial law and shall have arbitrated at least five commercial
disputes over a period of not less than three years (the "Arbitrator
Credentials"). The Seller and FFCA shall collectively select one of the three
arbitrators and the Purchaser shall select one of the three arbitrators and
those two arbitrators shall appoint the third arbitrator. If this procedure does
not result in the selection of three arbitrators, the arbitrator(s) shall be
selected as provided in Rule 6 of the CPR Arbitration Rules provided that such
arbitrators have Arbitrator Credentials.
(ii) For all Covered Disputes other than Termination-Related
Covered Disputes ("Non-Termination-Related Covered Disputes"), the arbitration
tribunal shall consist of one arbitrator who has the Arbitrator Credentials, and
who shall be chosen by mutual consent of the parties. If the parties are not
able to agree on a sole arbitrator, the Seller and FFCA shall collectively
select a representative who has the Arbitrator Credentials and the Purchaser
shall select a representative who has the Arbitrator Credentials and those two
representatives shall appoint a sole arbitrator who has Arbitrator Credentials.
If this procedure does not result in the selection of the sole arbitrator, the
arbitrator shall be selected as provided in Rule 6 of the CPR Arbitration Rules,
provided that such arbitrator has Arbitrator Credentials.
(iii) The location of any arbitration shall alternate between
Scottsdale, Arizona and Seattle, Washington, with the first of any such
arbitration to be held until its conclusion in Scottsdale, Arizona, and the next
arbitration to be held until its conclusion in Seattle, Washington and so on.
(iv) Each decision/award of the arbitration tribunal shall be
governed by the law of the State of New York, without regard to its conflict of
laws principles.
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(v) The arbitration tribunal may not appoint an expert without
the consent of the parties.
(vi) The arbitration tribunal may hear and rule on prehearing
disputes and dispositive motions.
(vii) The arbitration tribunal may award reasonable attorneys'
fees and costs to the party that prevails in the arbitration, to any party that
succeeds in compelling an arbitration, to any party that succeeds in having a
lawsuit stayed in favor of arbitration and/or to any party that prevails against
any challenge to the validity or enforceability of any arbitration award.
(viii) The arbitration tribunal may not award punitive damages or
other damages in excess of compensatory damages and the parties hereto waive any
right that they may have to recover any such damages.
(ix) In the event that the costs and fees of the arbitration
tribunal are required to be paid prior to the issuance of a decision/award, the
parties shall share such costs and fees equally, subject to a different
allocation of such costs and fees between the parties made by the arbitration
tribunal in its decision/award.
(x) In the event the arbitration tribunal issues an award
determining a Termination-Related Covered Dispute, either party may seek
judicial review to modify or vacate the award; provided, however, that the
federal and state courts of the State of Washington shall have exclusive
jurisdiction of any such review if the Purchaser was the party opposing
termination during the arbitration, and the federal and state courts of Arizona
shall have exclusive jurisdiction of any such review if the Seller was the party
opposing termination during the arbitration. In the event the arbitration
tribunal issues an award determining a Non-Termination-Related Covered Dispute,
either party may seek judicial review to modify or vacate the award; provided,
however, that the federal and state courts of the situs of the underlying
arbitration shall have exclusive jurisdiction of any such review.
(xi) The arbitration tribunal shall issue a written
decision/award, which shall state the basis of the decision/award and include
detailed findings of fact and conclusions of law. A court may enter judgment
upon any decision/award, either by confirming the decision/award or by vacating,
modifying or correcting the decision/award. The court shall vacate, modify or
correct any decision/award (a) based on any of the grounds referred to in the
Federal Arbitration Act, 9 U.S.C. ss.1 ET SEQ., (b) where the arbitrators'
findings of fact are not supported by substantial evidence, or (c) where the
arbitrators' conclusions of law are erroneous. The foregoing standard is
intended by the parties to modify by contract the presently stated rule
governing review of an arbitrator's award under the Federal Arbitration Act
(i.e., that the arbitrator's award will be overturned only for "manifest
disregard of the law").
(xii) In accordance with the parties' intent that any arbitration
be conducted on an expedited basis:
(aa) the responding party shall deliver a notice of defense
within 20 Business Days of receipt of a notice of arbitration;
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(bb) the parties shall select the arbitrator or arbitrators
within 15 Business Days of delivery of the responding party's notice of defense
and failing the selection of the arbitrator or arbitrators within that time
period, the arbitrator(s) shall be selected as set forth in Sections 9.10(c)(i)
or 9.10(c)(ii), as applicable;
(cc) the arbitration hearing shall take place not later than
90 days after service of the notice of arbitration, unless that deadline is
extended by mutual agreement of the parties or by order of the arbitration
tribunal upon good cause shown;
(dd) the arbitrator(s) shall issue a written decision/award
not later than 14 days after the conclusion of the arbitration hearing.
(d) The parties hereby agree that FFCA, as the guarantor of the
Seller's obligations under this Agreement, shall be a necessary and
indispensable party to any mediation or arbitration concerning this Agreement,
the Master Bailee Agreement and/or the Master Escrow Agreement, and that notice
of the commencement of any such mediation or arbitration shall be provided to
FFCA at the same time as it is given to the Seller or the Purchaser, as
applicable. FFCA shall be bound by the decision/award of the arbitration
tribunal in any such arbitration.
Section 9.11. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement of the Seller and the
Purchaser with respect to the subject matter hereof and supersedes any prior
understandings and agreements, including without limitation any confidentiality
agreement previously entered into between FFCA and the Purchaser or WMI.
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names to
be signed hereto by their respective officers thereunto duly authorized on the
date first above written.
WASHINGTON MUTUAL BANK, FA
By: /s/ Xxxxx X. Tall
-------------------------------------
Name: Xxxxx X. Tall
Title: Vice Chair, Corporate Development,
Consumer Finance & Commercial
Banking
And
By: /s/ Xxx X. Xxxxxxx
-------------------------------------
Name: Xxx X. Xxxxxxx
Title: Senior Executive Vice President
and General Counsel
FFCA ACQUISITION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
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EXHIBIT A
FORM OF PURCHASE TERMS LETTER
PURCHASE TERMS LETTER
(Date)
Re: Master Loan Purchase Agreement, dated as of December 14, 1999 (the
"Agreement"), between Washington Mutual Bank, FA and FFCA
Acquisition Corporation
Washington Mutual Bank, FA ("Purchaser") hereby confirms its agreement to
purchase, and [Seller] ("Seller") hereby confirms its agreement to sell, the
commercial loans identified and described in the Loan Approval Sheet annexed
hereto (the "Loans"), subject to the terms of the Agreement. Capitalized terms
used but not defined herein shall have the meanings assigned to such terms in
the Agreement.
1. The Closing Date for the purchase of the Loans is anticipated to take
place on or about:
2. [Additional Terms]:
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Each of Washington Mutual Bank, FA and [Seller] has caused this Purchase
Terms Letter to be executed by a duly authorized officer thereof as of the date
first written above.
WASHINGTON MUTUAL BANK, FA,
Purchaser
By:
Name:
Title:
[SELLER],
Seller
By:
Name:
Title:
SCHEDULE A
LOAN APPROVAL SHEET
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EXHIBIT B
FORM OF PURCHASE TERMS AMENDMENT
PURCHASE TERMS AMENDMENT
(Date)
Re: Purchase Terms Letter, dated [DATE]
Washington Mutual Bank, FA (the "Purchaser") and [Seller] (the "Seller")
hereby agree to supplement and/or amend the referenced Purchase Terms Letter in
accordance with the terms set forth in the Change Approval Sheet annexed hereto.
Each of Washington Mutual Bank, FA and [Seller] has caused this Purchase
Terms Amendment to be executed by a duly authorized officer thereof as of the
date first written above.
WASHINGTON MUTUAL BANK, FA,
Purchaser
By:
Name:
Title:
[SELLER]
Seller
By:
Name:
Title:
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SCHEDULE A
CHANGE APPROVAL SHEET
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EXHIBIT C
RESERVED
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EXHIBIT D
FORM OF SELLER'S OFFICER'S CERTIFICATE
SELLER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected or
appointed, qualified and acting Executive Vice President and General Counsel of
FFCA Acquisition Corporation, a corporation organized under the laws of the
State of Delaware (the "Seller"), and further certify, on behalf of the Seller
as follows:
1. Attached hereto as Attachment I are a true and correct copy of the
Certificate of Incorporation and by-laws of the Seller as are in full force and
effect on the date hereof. No event has occurred since [date of good standing
certificate to be attached - not more than 60 days old], 199[_] which has
affected the good standing of the Seller under the laws of the State of
Delaware.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer of the Seller, signed (a) the Master Loan
Purchase Agreement dated as of December 14, 1999 (the "Purchase Agreement"),
between the Seller and the Purchaser; and (b) any other document delivered prior
hereto or on the date hereof in connection with the sale and servicing of the
Loans in accordance with the Purchase Agreement was, at the respective times of
such signing and delivery, and is as of the date hereof, duly elected or
appointed, qualified and acting as such officer, and the signatures of such
persons appearing on such documents are their genuine signatures.
4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Seller on
________________, 19__ (the "Resolutions") with respect to the authorization and
approval of the execution and delivery of the Purchase Agreement, said
Resolutions have not been amended, modified, annulled or revoked and are in full
force and effect on the date hereof.
All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
-1-
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
FFCA Acquisition Corporation.
Dated:
[Seal] FFCA ACQUISITION CORPORATION
By:
Name:
Title:
I, _______________________________ , Secretary of FFCA Acquisition
Corporation, hereby certify that _____________________________ is the duly
elected, qualified and acting Executive Vice President of FFCA Acquisition
Corporation and that the signature appearing above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
By:
Name: Xxxxxxxxxxx X. Xxxx
Title: Executive Vice President, Chief
Operating Officer and Secretary
-2-
Attachment I
(Certificate of Incorporation and By-Laws)
Attachment II
(Resolutions)
EXHIBIT E
FORM OF FFCA'S OFFICER'S CERTIFICATE
FFCA'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected or
appointed, qualified and acting Executive Vice President and General Counsel of
Franchise Finance Corporation of America, a corporation organized under the laws
of the State of Delaware ("FFCA"), and further certify, on behalf of FFCA as
follows:
1. Attached hereto as Attachment I are a true and correct copy of the
Certificate of Incorporation and by-laws of FFCA as are in full force and effect
on the date hereof. No event has occurred since [date of good standing
certificate to be attached - not more than 60 days old], 199[_] which has
affected the good standing of FFCA under the laws of the State of Delaware.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of FFCA are pending or contemplated.
3. Each person who, as an officer of FFCA, signed (a) the Servicing
Agreement; (b) the Guaranty; (c) the Warrant Agreement; (d) the Warrant; (e) the
Registration Rights Agreement; and (f) any other document delivered prior hereto
or on the date hereof in connection with any of the foregoing agreements was, at
the respective times of such signing and delivery, and is as of the date hereof,
duly elected or appointed, qualified and acting as such officer, and the
signatures of such persons appearing on such documents are their genuine
signatures.
4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of FFCA on ________________,
19__ (the "Resolutions") with respect to the authorization and approval of the
execution and delivery of the Servicing Agreement, the Guaranty, the Warrant
Agreement, the Warrant and the Registration Rights Agreement; said Resolutions
have not been amended, modified, annulled or revoked and are in full force and
effect on the date hereof.
All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Master Loan Purchase Agreement, dated as of
December 14, 1999, between FFCA Acquisition Corporation and Washington Mutual
Bank, FA.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
Franchise Finance Corporation of America.
Dated:
[Seal]
FRANCHISE FINANCE CORPORATION
OF AMERICA
By:
Name:
Title:
I, ___________________________ , Secretary of Franchise Finance Corporation
of America, hereby certify that _____________________________ is the duly
elected, qualified and acting Executive Vice President of Franchise Finance
Corporation of America and that the signature appearing above is his genuine
signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
By:
Name: Xxxxxxxxxxx X. Xxxx
Title: Executive Vice President, Chief
Operating Officer and Secretary
Attachment I
(Certificate of Incorporation and By-Laws)
Attachment II
(Resolutions)
EXHIBIT F
FORM OF PURCHASER'S OFFICER'S CERTIFICATE
PURCHASER'S OFFICER'S CERTIFICATE
I, ________________________, hereby certify that I am the duly elected or
appointed, qualified and acting [Vice President] of Washington Mutual Bank, FA,
a corporation organized under the laws of the United States (the "Purchaser"),
and further certify, on behalf of the Purchaser as follows:
1. Attached hereto as Attachment I are a true and correct copy of the
[Certificate of Incorporation and by-laws] of the Purchaser as are in full force
and effect on the date hereof. No event has occurred since [date of good
standing certificate to be attached - not more than 60 days old], 199[_] which
has affected the good standing of the Purchaser under the laws of the United
States.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Purchaser are pending or contemplated.
3. Each person who, as an officer of the Purchaser, signed (a) the Master
Loan Purchase Agreement dated as of December 14, 1999 (the "Purchase
Agreement"), between the Seller and the Purchaser; and (b) any other document
delivered prior hereto or on the date hereof in connection with the sale and
servicing of the Loans in accordance with the Purchase Agreement was, at the
respective times of such signing and delivery, and is as of the date hereof,
duly elected or appointed, qualified and acting as such officer, and the
signatures of such persons appearing on such documents are their genuine
signatures.
4. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Purchaser on
________________, 19__ (the "Resolutions") with respect to the authorization and
approval of the execution and delivery of the Purchase Agreement, said
Resolutions have not been amended, modified, annulled or revoked and are in full
force and effect on the date hereof.
All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
Washington Mutual Bank, FA.
Dated:
[Seal] WASHINGTON MUTUAL BANK, FA
By:
Name:
Title:
I, _____________________ , Secretary of Washington Mutual Bank, FA, hereby
certify that ________________________ is the duly elected, qualified and acting
Vice President of Washington Mutual Bank, FA and that the signature appearing
above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
By:
Name:
Title: Secretary
Attachment I
[(Certificate of Incorporation and By-Laws)]
Attachment II
(Resolutions)
EXHIBIT G
FORM OF XXXX OF SALE
XXXX OF SALE
On this ____ day of __________, _____, [Seller] (the "Seller"), as seller
under that certain Master Loan Purchase Agreement, dated as of December 14, 1999
(the "Agreement"), does hereby sell, transfer, assign, set over and convey to
Washington Mutual Bank, FA (the "Purchaser"), as the purchaser under the
Agreement, without recourse, but subject to the terms of the Agreement, all
right, title and interest of the Seller in and to the Loans listed on the Loan
Schedule attached as Schedule A hereto, together with the related Loan Files and
all rights and obligations arising under the documents contained therein. The
ownership of each Loan and the related Note, Mortgage and/or Security Agreement,
and the contents of the Loan File is vested in the Purchaser and the ownership
of all records and documents with respect to the related Loan prepared by or
which come into the possession of the Seller shall immediately vest in the
Purchaser and shall be retained and maintained, in trust, by the Seller at the
will of the Purchaser in a custodial capacity only.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
[SELLER]
By:
Name:
Title:
-1-
SCHEDULE A
LOAN SCHEDULE
-1-
EXHIBIT H
ELIGIBLE LOANS
An Eligible Loan is a Mortgage Loan, Equipment Loan or Corporate Secured
Loan secured by real estate, equipment and/or other property used in, or related
to, the operation of any of the following types of facilities:
1. a quick service restaurant;
2. a casual dining or family dining restaurant;
3. a convenience store;
4. a convenience and gasoline store;
5. a travel plaza; or
6. an automotive parts and/or service facility.
-1-
EXHIBIT I
FORM OF MASTER BAILEE AGREEMENT
This MASTER BAILEE AGREEMENT, dated as of [__________], [_____] (this
"Agreement"), is made among [SELLER] (the "Seller"), Washington Mutual Bank, FA
(the "Purchaser") and [LAW FIRM] (the "Bailee").
WHEREAS, pursuant to the Purchase Agreement, the Seller intends to
sell and the Purchaser intends to purchase certain Loans in accordance with the
terms of the Purchase Agreement;
WHEREAS, the Purchaser and the Servicer have entered into the
Servicing Agreement for the servicing of the Loans which are sold pursuant to
the Purchase Agreement;
WHEREAS, the Seller intends to make from time to time certain Loans to
certain Borrowers in accordance with the Purchase Agreement with funds advanced
from time to time by the Purchaser for the purchase of such Loans pursuant to
the terms of the Purchase Agreement;
WHEREAS, the Seller and the Purchaser each desire to retain the Bailee
for the purposes of facilitating the use of such funds and the purchase of such
funded Loans, facilitating the purchase of certain other Loans that were made
with the Seller's funds, issuing and delivering to the Seller and the Purchaser
a Trust Receipt for each Loan purchase, and delivering to the Title Company an
appropriate Closing Instruction Letter for each Loan purchase;
WHEREAS, the Bailee is counsel to the Seller in connection with the
origination of the Loans subject to this Agreement, and the Bailee desires to
act as bailee in connection with such Loans in the capacity as set forth herein
and pursuant hereto, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and received, the
parties hereto each agree as follows:
1
ARTICLE I
SECTION 1.01. DEFINITIONS. For purposes of this Agreement, the
following capitalized terms shall have the respective meanings set forth below.
Any capitalized term used but not defined herein shall have the meaning assigned
such term in the Purchase Agreement.
"Agreement": This Master Bailee Agreement, including all amendments
hereof and supplements hereto.
"Borrower": The obligor or obligors on a Note, including any Person
that has acquired the related Collateral and assumed the obligations of the
original obligor or obligors under the Note.
"Business Day": Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the State of Arizona or the
State of Washington are authorized or obligated by law or executive order to
remain closed.
"Closing Date": With respect to each Loan, the date on which the
Purchaser purchases such Loan.
"Closing Instruction Letter": A letter delivered by the Bailee to the
Title Company in Approved Form setting forth closing instructions and procedures
related to a Closing Date, including with respect to the recording or filing, as
applicable, of Recordable Documents and, to the extent applicable, the terms of
release of Escrow Funds.
"Collateral": As to any Loan, the related Mortgaged Property,
Equipment and/or other property that secures such Loan.
"Escrow Funds": Any funds deposited by the Purchaser with a Title
Company in accordance with a Master Escrow Agreement.
"Facsimile Authorization": An authorization delivered by the Seller by
facsimile transmission to the Bailee at ( ) ___-____ to the attention of
_____________ (with a concurrent copy to Purchaser's Funding Representative in
accordance with Section 2.04(c) of the Purchase Agreement) to release the Loan
File with respect to each Loan identified therein to the Seller or at the
direction of the Seller or to take such other action as set forth in such
authorization.
"Final Purchase Terms Letter": As defined in Section 1.01 of the
Purchase Agreement.
"Loan": Each loan sold or to be sold to the Purchaser on a Closing
Date pursuant to the Purchase Agreement and the related Final Purchase Terms
Letter and attachments.
"Loan Documents": As defined in Section 1.01 of the Purchase
Agreement.
2
"Master Escrow Agreement": A Master Escrow Agreement, among the
Purchaser, the Seller and a Title Company, substantially in the form of Exhibit
J to the Purchase Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.
"Note": The original executed promissory note evidencing the
indebtedness of a Borrower under a Loan, together with any rider, addendum or
amendment thereto, or any renewal, substitution or replacement of such
promissory note.
"Purchase Agreement": The Master Loan Purchase Agreement, dated as of
December 14, 1999, between FFCA Acquisition Corporation and Washington Mutual
Bank, FA, as the same may be amended, supplemented or otherwise modified from
time to time.
"Recordable Documents": The following documents:
(i) in the case of each Mortgage Loan and, to the extent applicable,
each Corporate Secured Loan, the Mortgage;
(ii) in the case of each Loan, to the extent applicable, any related
Assignment of Leases (if such item is a document separate from
the Mortgage);
(iii) an assignment of the Mortgage in favor of "Washington Mutual
Bank, FA and its successors and assigns";
(iv) an assignment of any related Assignment of Leases (if such item
is a document separate from the Mortgage), in favor of
"Washington Mutual Bank, FA and its successors and assigns"; and
(v) UCC Financing Statements in favor of the originator of such
Loan, together with UCC Financing Statements on Form UCC-2 or
UCC-3, as appropriate, in favor of "Washington Mutual Bank, FA
and its successors and assigns".
"Servicer": Franchise Finance Corporation of America, and its
permitted successors and assigns, pursuant to the Servicing Agreement.
"Servicing Agreement": The Servicing Agreement, dated as of December
14, 1999, between Franchise Finance Corporation of America as Servicer and
Washington Mutual Bank, FA as Owner, as the same may be amended, supplemented or
otherwise modified from time to time.
"Title Company": A party acting as a Title Company pursuant to a
Master Escrow Agreement.
"Trust Receipt": A trust receipt and a certification, in substantially
the form of Exhibit A hereto, issued by the Bailee pursuant to this Agreement.
3
ARTICLE II
SECTION 2.01. BAILEE TO ACT AS BAILEE. From time to time, the
Purchaser intends to purchase and the Seller intends to sell one or more Loans
originated by the Seller pursuant to and in accordance with the Purchase
Agreement. Each such purchase and sale of a Loan shall be evidenced by a Final
Purchase Terms Letter and any attachments thereto. Pursuant to the terms of this
Agreement, the Bailee may, from time to time, act as bailee on behalf of the
Seller and the Purchaser in connection with the sale and purchase of certain
Loans for which the Bailee has also acted as counsel to the Seller in connection
with the origination of such Loans.
SECTION 2.02. MASTER BAILEE AGREEMENT. The parties hereto agree and
acknowledge (i) that this Agreement (x) sets forth and controls the Bailee's
rights, duties, responsibilities and obligations as bailee with respect to each
Loan sale and purchase under the Purchase Agreement (y) sets forth certain of
the Seller's and the Purchaser's respective rights, duties, responsibilities and
obligations with respect to each Loan sale and purchase under the Purchase
Agreement, and (z) shall continue to be in full force and effect with respect to
each Loan sale and purchase to be entered into from time to time, and (ii) that
each shall be bound by the terms of this Agreement with respect to each Loan
sale and purchase.
SECTION 2.03. SALE PROCEDURES. In connection with the sale of a Loan
to the Purchaser pursuant to the Purchase Agreement:
(a) the Seller shall, before 4:00 p.m. (Seattle, Washington time) on the
Business Day preceding the Closing Date for such Loan, deliver or cause to be
delivered the Loan File (other than any Recordable Documents previously
delivered to the Title Company for recording or filing, as applicable, and not
yet returned from the applicable public office, for each of such Recordable
Documents there is a true and correct photocopy in the Loan File) and the
Funding Notice to the Bailee;
(b) upon receipt by the Bailee of the Funding Notice and the Loan File
(other than any Recordable Documents previously delivered to the Title Company
for recording or filing, as applicable, and not yet returned from the applicable
public office, for each of such Recordable Documents there is a true and correct
photocopy in the Loan File) on the Business Day preceding the scheduled Closing
Date, the Bailee shall issue and deliver a Trust Receipt to the Seller and the
Purchaser by facsimile stating that it is in possession of the Loan File for the
Loan to be sold to the Purchaser on such Closing Date (other than any Recordable
Documents previously delivered to the Title Company for recording or filing, as
applicable, and not yet returned from the applicable public office, for each of
such Recordable Documents there is a true and correct photocopy in the Loan
File);
(c) on or before the Closing Date, the Bailee shall deliver to the Title
Company the executed original Recordable Documents (other than any Recordable
Documents previously delivered to the Title Company for recording or filing, as
applicable) and a Closing Instruction Letter;
4
(d) the Purchaser will wire or cause to be wired the Purchase Price on the
Closing Date as specified in the Funding Notice and in accordance with Section
2.04 of the Purchase Agreement;
(e) the Bailee shall, within three Business Days after the Closing Date,
deliver to the Purchaser at the address set forth in Section 4.01 herein by
overnight courier, the related Loan File (other than any Recordable Documents
previously delivered to the Title Company for recording or filing, as
applicable, and not yet returned from the applicable public office, for each of
such Recordable Documents there is a true and correct photocopy in the Loan
File).
SECTION 2.04. CUSTODY AND RELEASE OF LOAN FILE. The Bailee shall
maintain continuous custody and control of the related Loan File as sole and
exclusive bailee for the Seller and the Purchaser (except for delivery of the
Recordable Documents to the Title Company as herein authorized) from and after
the Bailee's receipt of the Loan File or any portion thereof until (i) it
delivers the Loan File to the Purchaser in accordance with Section 2.03(e)
herein, (ii) it receives joint instructions in writing from the Seller and the
Purchaser, or (iii) it receives a Facsimile Authorization from the Seller in the
event that the Purchaser fails to fund the purchase of a Loan on the Business
Day following the day on which the Trust Receipt was received by the Purchaser
in accordance with Section 2.04 of the Purchase Agreement. Upon receipt of
instructions from the Seller and the Purchaser or a Facsimile Authorization in
accordance with clauses (ii) or (iii) above, the Bailee shall take such action
as is set forth in such instructions or Facsimile Authorization, as applicable.
SECTION 2.05 DELIVERY FAILURE. In the event that the Bailee fails to
deliver any Recordable Document or a Closing Instruction Letter in accordance
with this Agreement, or if the Bailee fails to deliver any document comprising
any part of the Loan File that was in its possession on or before the date of
delivery of the related Loan File to the Purchaser or pursuant to a Facsimile
Authorization (collectively, a "DELIVERY FAILURE"), and PROVIDED that the Bailee
previously delivered to the Seller and the Purchaser a Trust Receipt which did
not specifically identify such document as an item not in its possession, the
Bailee shall indemnify and hold the Seller and the Purchaser, and their
respective affiliates and designees harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including reasonable
attorney's fees, that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of a Delivery Failure or the Bailee's
negligence, lack of good faith or willful misconduct. The foregoing
indemnification shall survive any termination or assignment of this Agreement.
SECTION 2.06 BAILEE INDEMNITY; RELIANCE. The Seller and the Purchaser
shall jointly and severally indemnify and hold the Bailee harmless against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, including reasonable attorney's fees, that may be imposed on,
incurred by, or asserted against it in any way relating to or arising out of the
Bailee acting, or refraining from acting, in accordance with Section 2.03(e) or
the joint written instructions of the Seller and the Purchaser, unless such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements were imposed on, incurred by or asserted
against the Bailee relating to or arising out of a Delivery Failure or the
Bailee's negligence, bad faith or wilful misconduct. The Seller shall indemnify
and hold the Bailee harmless against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including reasonable attorney's
5
fees, that may be imposed on, incurred by, or asserted against it in any way
relating to or arising out of the Bailee acting, or refraining from acting, in
accordance with a Facsimile Authorization, unless such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements were imposed on, incurred by or asserted against the Bailee
relating to or arising out of a Delivery Failure or the Bailee's negligence, bad
faith or wilful misconduct. The foregoing indemnification shall survive any
termination or assignment of this Agreement.
In the absence of bad faith on the part of the Bailee, the Bailee may
rely upon any original or facsimile instruction that is otherwise authorized by
any other provision of this Agreement, or upon any certificate, opinion or other
document delivered to the Bailee in its capacity as bailee under this Agreement,
and reasonably believed by the Bailee to be genuine and to have been signed or
presented by the proper party or parties and conforming to the requirements of
this Agreement.
ARTICLE III
SECTION 3.01. TERMINATION. At such time as the Purchase Agreement
expires or is terminated pursuant to the terms thereof, this Agreement shall
terminate and the Bailee shall be discharged from all obligations under this
Agreement and shall have no further duties or responsibilities in connection
herewith, except for those obligations that by their terms survive such
expiration or termination.
ARTICLE IV
SECTION 4.01. NOTICES. Except as otherwise expressly set forth in this
Agreement, all demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if (i) delivered personally, mailed
by overnight courier or (ii) transmitted by telecopy (with a copy delivered by
overnight courier) at the address as follows:
(a) if to the Seller:
FFCA Acquisition Corporation
The Perimeter Center
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Executive Vice President and General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Purchaser:
Washington Mutual Bank, FA
Mailstop WMT-1020
0000 Xxxxx Xxxxxx
0
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Senior Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(c) if to the Bailee:
[LAW FIRM]
_______________________________________
_______________________________________
Attention: ______________
Telephone: (___) ___-____
Telecopy: (___) ___-____
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 4.02. SEVERABILITY CLAUSE. Any part, provision, representation
or warranty 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 or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, 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 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 which prohibits or renders void or unenforceable any provision
hereof. If the invalidity of any part, provision, representation or warranty of
this Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good faith, to
develop a structure that, as nearly as possible, has the same economic effect as
does this Agreement without regard to such invalidity.
SECTION 4.03. COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
SECTION 4.04. GOVERNING LAW. The Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with the
laws of the State of New York.
SECTION 4.05. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of and be enforceable by the Seller, the Purchaser and the
Bailee and the respective successors and permitted assigns of the Seller, the
Purchaser and the Bailee. This Agreement may not be assigned by the Bailee, nor
7
may its duties herein be delegated, without the prior written consent of both
the Seller and the Purchaser, each of which may be granted or withheld in its
sole discretion. This Agreement may not be assigned by the Seller except to a
Person that is also the successor by assignment to the Seller's right, title and
interest in the Purchase Agreement, nor may it be assigned by the Purchaser
except to a Person that is also the successor by assignment to the Purchaser's
right, title and interest in the Purchase Agreement.
SECTION 4.06. WAIVERS. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by the party against whom such waiver or modification is sought to be enforced.
SECTION 4.07. APPENDICES. The appendices and exhibits to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement.
SECTION 4.08. GENERAL INTERPRETIVE PRINCIPLES. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Sections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 4.09. FURTHER AGREEMENTS. The Seller, the Purchaser and the
Bailee agree to execute and deliver to each other such reasonable and
appropriate additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Agreement.
SECTION 4.10. DISPUTE RESOLUTION. Any dispute that arises under this
Agreement solely between the Seller and the Purchaser shall be a "Covered
Dispute" as defined in the Purchase Agreement and such dispute shall be resolved
in accordance with the dispute resolution mechanisms set forth in Section 9.10
of the Purchase Agreement. Any dispute that involves the Bailee is specifically
excluded from this Section.
8
IN WITNESS WHEREOF, the Bailee, the Purchaser and the Seller have
caused their names to be signed hereto by their respective officers thereunto
duly authorized on the date first above written.
[LAW FIRM]
By:
------------------------------------
Name:
Title:
[SELLER]
By:
------------------------------------
Name:
Title:
WASHINGTON MUTUAL BANK, FA
By:
------------------------------------
Name:
Title:
And By:
-----------------------------------
Name:
Title:
9
FORM OF TRUST RECEIPT
[Date]
[SELLER]
The Perimeter Center
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Washington Mutual Bank, FA
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Re: Mortgage Loan[, Equipment Loan][and Corporate Secured
Loan]([collectively,] the "Loan[s]") in the original principal
amount[s] of $[___________][and][,][$][and $] to be made by [SELLER]
(the "Seller") to [______________] (the "Borrower") with respect to
the premises described by address on the attached EXHIBIT B (the
"Mortgaged Property")
Ladies and Gentlemen:
Reference is made to the Master Loan Purchase Agreement, dated as of
December 14, 1999 (the "Purchase Agreement"), between FFCA Acquisition
Corporation and Washington Mutual Bank, FA (the "Purchaser"). Capitalized terms
used but not defined herein have the meanings assigned to them in the Purchase
Agreement.
In accordance with the provisions of the Master Bailee Agreement, the
undersigned, acting as Bailee on behalf of the Seller and the Purchaser with
respect to the Loan[s], hereby (i) certifies that it has in its possession the
documents and items comprising the Loan File (other than any Recordable
Documents previously delivered to the Title Company for recording or filing, as
applicable, and not yet returned from the applicable public office, for each of
such Recordable Documents there is a true and correct photocopy in the Loan
File) applicable to the referenced Loan[s], except for those items listed on the
attached EXHIBIT A and (ii) attaches its certification as EXHIBIT B hereto.
The Bailee hereby confirms that it is holding each such document as agent
and bailee of, and custodian for the exclusive use and benefit, and subject to
the direction, of the Seller and the Purchaser pursuant to the terms and
conditions of the Master Bailee Agreement.
[LAW FIRM], as Bailee
By:
------------------------------------
Name:
Title:
10
EXHIBIT A
Loan File Exceptions
11
EXHIBIT B
FORM OF LAW FIRM CERTIFICATION
[Letterhead of Law Firm]
[Date]
[SELLER]
The Perimeter Center
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Washington Mutual Bank, FA
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Re: Mortgage Loan[, Equipment Loan][and Corporate Secured
Loan]([collectively,] the "Loan[s]") in the original principal
amount[s] of $[___________][and][,][$][and $] to be made by [SELLER]
(the "Seller") to [______________] (the "Borrower") with respect to
the premises described by address on the attached EXHIBIT B (the
"Mortgaged Property")
Ladies and Gentlemen:
This firm represents the Seller in connection with the referenced Loan[s].
This letter is being delivered to the Seller and Washington Mutual Bank, FA (the
"Purchaser") in connection with Purchaser's purchase of such Loan[s]. Initially
capitalized terms not otherwise defined in the text of this letter, including
the attached EXHIBIT A, have the meanings set forth in that certain Master Loan
Purchase Agreement, dated as of December 14, 1999 (the "Purchase Agreement"),
between the Purchaser and FFCA Acquisition Corporation.
1. CLOSING DOCUMENTS. In connection with our representation of Seller, we
have prepared and/or reviewed the documents and items listed under Section I of
the attached EXHIBIT A (the "Closing Documents") and the items listed under
Sections II through V of the attached EXHIBIT A. The Closing Documents were
prepared from Seller's form loan documents in Approved Form, with appropriate
insertions, variations and modifications which incorporate the following:
(i) the terms of the Final Purchase Terms Letter corresponding to
the Loan[s];
(ii) applicable state law requirements; and
12
(iii) such other terms (not expressly provided in the Final Purchase
Terms Letter) as Seller has determined in its reasonable
judgment do not materially and adversely affect the benefits of
the security and other benefits intended to be provided to
Seller by the Closing Documents; provided, however, except as
set forth on EXHIBIT B, no variation or change which is of the
nature set forth on Schedule 3 to the Purchase Agreement has
been made to the Closing Documents.
2. OPINION LETTER OF BORROWER'S COUNSEL. The Opinion is in the Approved
Form, except for such assumptions and qualifications set forth on EXHIBIT B or
which, in our judgment, are customary and ordinary and generally acceptable to
mortgage lending institutions.
3. TITLE COMMITMENT. The Title Insurer has advised us that when it has
signed the Closing Instruction Letter and disbursed funds from the escrow
account in connection with the Loan[s], the Marked Commitment will constitute
the title insurance policy, effective as of the date of such disbursement, with
the original title policy containing all appropriate recording information. The
Marked Commitment states that it insures the named insured subject to the
exclusions from coverage contained therein, the exceptions from coverage
contained in Schedule B thereof and the conditions and stipulations contained
therein, against loss or damage (not exceeding the amount of insurance)
sustained or incurred by the named insured by reason of, among other things, the
invalidity or unenforceability of the lien of the Mortgage or the priority of
any lien or encumbrance over the lien of the Mortgage.
In reviewing Schedule B of the Marked Commitment, except as listed on
EXHIBIT B hereto, we have not found any encumbrances or liens other than:
(i) the lien of current real property taxes, ground rents, if
applicable, water charges, sewer rents and assessments not yet
due and payable or payable but not yet delinquent;
(ii) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording
which:
(X) are acceptable to mortgage lending institutions generally,
are specifically referred to in the Marked Commitment, and
do not, in our judgment, materially and adversely affect the
current use, value or marketability of such Mortgaged
Property; or
(Y) the Marked Commitment has insured over, either by
affirmative insurance or endorsement, or are the subject of
a Title Matters Indemnity Agreement entered into in
accordance with the terms of the Purchase Agreement; and
(iii) other matters to which like properties are commonly subject
which do not, in our judgment, individually or in the aggregate,
materially and adversely affect the current use, value or
marketability of such Mortgaged Property, or which the Marked
13
Commitment has insured over, either by affirmative insurance or
endorsement, or such matters are the subject of a Title Matters
Indemnity Agreement entered into in accordance with the terms of
the Purchase Agreement.
Except as set forth on EXHIBIT B, the Marked Commitment provides for the
issuance of all Required Endorsements. In addition, the Marked Commitment
provides for the issuance of such other endorsements as we in our judgment
deemed appropriate under the circumstances.
The amount of the Marked Commitment is not less than the original principal
amount of the Loan[s]. The Marked Commitment does not contain any special
exceptions for zoning and uses, and has been marked to delete the standard
survey exception or to replace the standard survey exception with a specific
survey reading. Seller, its successors and assigns, is the original named
insured under the Marked Commitment.
4. SURVEY. The Survey is certified to Seller and its successors and assigns
and to the Title Insurer. The Survey has been prepared generally in accordance
with minimum standards for surveys as determined by ALTA or equivalent and
contains the signature and seal of a licensed engineer or surveyor affixed
thereto. Except as set forth in EXHIBIT B attached hereto, the Survey shows that
none of the improvements shown thereon lie outside of the boundaries and
building restriction lines of the Mortgaged Property except for:
(i) encroachments for which the Marked Commitment has insured over,
either by affirmative insurance or endorsement; or
(ii) those encroachments for which appropriate title insurance
coverage is not available but are the subject of a Title Matters
Indemnity Agreement with respect to such Loan[s] entered into in
accordance with the terms of the Purchase Agreement.
5. CLOSING INSTRUCTION LETTER. The Closing Instruction Letter is in the
Approved Form, except as set forth on EXHIBIT B.
This letter is based solely on our review of the Closing Documents as
counsel to Seller. We have reviewed the Closing Documents with the same
diligence we would use in reviewing a loan to be held by Seller for its own
account. We have not witnessed the execution of any of the Closing Documents.
This letter, which is not intended as a legal opinion, is intended for the
benefit of Purchaser only and may not be relied upon by any other party,
including the successors and assigns of Purchaser. However, we have not acted as
counsel to Purchaser.
Very truly yours,
(Name of Attorney Signing Letter)
14
EXHIBIT A
[MODIFY AS APPLICABLE]
MORTGAGE LOAN CLOSING
I. Closing Documents
a. Loan Agreement between Seller and Borrower
b. Promissory Note in the original principal amount of $____________
from Borrower to Seller, endorsed by Seller to Purchaser and its successors and
assigns
c. [Mortgage][Deed of Trust][Deed to Secure Debt], Assignment of
Leases, Security Agreement and Fixture Filing from Borrower to Seller
("MORTGAGE")
d. Assignment of Leases (if such item is a document separate from the
Mortgage)
e. assignment of any related Assignment of Leases (if such item is a
document separate from the Mortgage)
f. UCC-1 Financing Statements from Borrower to Seller
g. Environmental Indemnity Agreement from Borrower to Seller
h. Unconditional Guaranty of Payment and Performance from [
("Guarantor[s]")] to Seller
i. Assignment of [Mortgage][Deed of Trust][Deed to Secure Debt],
Assignment of Rents and Leases, Security Agreement and Fixture Filing from
Seller to Purchaser and it successors and assigns
j. UCC-2 or UCC-3 Financing Statements giving notice of the assignment
of Seller's interest in the Loan to Purchaser and its successors and assigns
k. Xxxx of Sale from Seller to Purchaser and its successors and
assigns
II. Opinion Letter
Opinion Letter of counsel to Borrower [and Guarantor[s]] as to
Borrower [and Guarantor[s]] ("Opinion")
15
III. Title Insurance
Marked title commitment no. _________ issued by _____________________
(the "TITLE INSURER"), attached as an exhibit to the Closing Instruction Letter
(the "MARKED COMMITMENT")
IV. Survey
Survey entitled "ALTA SURVEY _________________________ (the "SURVEY")
V. Closing Instruction Letter
Closing Instruction Letter from this Firm to Title Insurer (the
"Closing Instruction Letter")
[EQUIPMENT LOAN CLOSING
a. Equipment Loan Agreement between Seller and Borrower;
b. Equipment Promissory Note in the original principal amount of $
from Borrower to Seller, endorsed by Seller to Purchaser and its
successors and assigns;
c. Equipment Security Agreement from Borrower to Seller; and
d. Unconditional Guaranty of Payment and Performance from Guarantor[s]
to Seller; and
e. UCC-1 Financing Statements from Borrower to Seller.]
[CORPORATE SECURED LOAN CLOSING
a. Loan Agreement between Seller and Borrower;
b. Promissory Note in the original principal amount of $____________
from Borrower to Seller, endorsed by Seller to Purchaser and its successors and
assigns;
c. [Describe applicable collateral documents (e.g. mortgage; equipment
security agreement; UCC-1 Financing Statements and additional documents, as
applicable (e.g. environmental indemnity agreement; guaranty)]
16
EXHIBIT B
A. ADDRESS OF MORTGAGED PROPERTY
B. DISCLOSURES
1. [IDENTIFY MISSING LOAN FILE ITEMS]
2. [IDENTIFY PROVISIONS OF CLOSING DOCUMENTS WHICH DO NOT CONFORM WITH
FINAL PURCHASE TERMS LETTER OR SCHEDULE 3 OF THE PURCHASE AGREEMENT]
3. [IDENTIFY TITLE AND SURVEY ISSUES WHICH DO NOT CONFORM WITH THE
REQUIREMENTS OF PARAGRAPHS 2 AND 3 OF THE LETTER]
4. [IDENTIFY PROVISIONS OF CLOSING INSTRUCTION LETTER WHICH DO NOT CONFORM
WITH APPROVED FORM]
5. [IDENTIFY PROVISIONS OF OPINION WHICH DO NOT CONFORM WITH APPROVED FORM]
17
EXHIBIT J
FORM OF MASTER ESCROW AGREEMENT
This MASTER ESCROW AGREEMENT, dated as of [__________], [_____] (this
"Agreement"), is made among [SELLER] (the "Seller"), Washington Mutual Bank, FA
(the "Purchaser") and [TITLE COMPANY] (the "Title Company").
WHEREAS, pursuant to the Purchase Agreement, the Seller intends to
sell and the Purchaser intends to purchase certain Loans in accordance with the
terms of the Purchase Agreement;
WHEREAS, the Purchaser and the Servicer have entered into the
Servicing Agreement for the servicing of the Loans which are sold pursuant to
the Purchase Agreement;
WHEREAS, the Seller intends to make from time to time certain Loans to
certain Borrowers in accordance with the Purchase Agreement with funds advanced
from time to time by the Purchaser for the purchase of such Loans pursuant to
the terms of the Purchase Agreement;
WHEREAS, the Seller and the Purchaser each desire to retain the Title
Company for the purposes of facilitating the use of such funds and the purchase
of such funded Loans and facilitating the purchase of certain other Loans that
were made with the Seller's funds in accordance with the terms and conditions of
this Agreement;
WHEREAS, the Title Company desires to act as an escrow agent in the
capacity as set forth herein and pursuant hereto, subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and received, the
parties hereto each agree as follows:
1
ARTICLE I
SECTION 1.01. DEFINITIONS. For purposes of this Agreement, the
following capitalized terms shall have the respective meanings set forth below.
Any capitalized term used but not defined herein shall have the meaning assigned
such term in the Purchase Agreement.
"Agreement": This Master Escrow Agreement, including all amendments
hereof and supplements hereto.
"Borrower": The obligor or obligors on a Note, including any Person
that has acquired the related Collateral and assumed the obligations of the
original obligor or obligors under the Note.
"Business Day": Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the State of Arizona or the
State of Washington are authorized or obligated by law or executive order to
remain closed.
"Closing Date": With respect to each Loan, the date on which the
Purchaser purchases such Loan.
"Closing Instruction Letter": As defined in the Master Bailee
Agreement.
"Collateral": As to any Loan, the related Mortgaged Property,
Equipment and/or other property that secures such Loan.
"Escrow Funds": Any funds deposited by the Purchaser with the Title
Company in accordance with this Agreement.
"Final Purchase Terms Letter": As defined in Section 1.01 of the
Purchase Agreement.
"Funding": The release of Escrow Funds by the Title Company in
accordance with the Closing Instruction Letter with respect to a Loan.
"Funding Date": The date on which a Loan is closed with the related
Borrower.
"Funding Notice": The Notice provided by the Seller to the Purchaser
pursuant to Section 2.04 of the Purchase Agreement.
"Loan": Each loan sold or to be sold to the Purchaser on a Closing
Date pursuant to the Purchase Agreement and the related Final Purchase Terms
Letter and attachments.
"Loan Documents": As defined in Section 1.01 of the Purchase
Agreement.
2
"Master Bailee Agreement": A Master Bailee Agreement, among the
Purchaser, the Seller and a Bailee, substantially in the form of Exhibit I to
the Purchase Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
"Note": The original executed promissory note evidencing the
indebtedness of a Borrower under a Loan, together with any rider, addendum or
amendment thereto, or any renewal, substitution or replacement of such
promissory note.
"Permitted Investments": Any one or more of the following obligations
or securities:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States of
America or any agency or instrumentality thereof, provided that
such obligations are backed by the full faith and credit of the
United States of America and have a predetermined, fixed amount
of principal due at maturity (that cannot vary or change) and
that each such obligation a fixed interest rate or has its
interest rate tied to a single interest rate index plus a single
fixed spread;
(ii) obligations of agencies or instrumentalities of the United
States of America that are not backed by the full faith and
credit of the United States of America, provided that such
obligations have a predetermined, fixed amount of principal due
at maturity (that cannot vary or change), do not have an "r"
highlight attached to any rating and that each such obligation
has a fixed interest rate or has its interest rate tied to a
single interest rate index plus a single fixed spread;
(iii) uncertificated certificates of deposit, time deposits,
bankers' acceptances and repurchase agreements having maturities
of not more than 365 days, of any bank or trust company organized
under the laws of the United States of America or any state
thereof, provided that such items are rated in the highest
short-term debt rating category of a Rating Agency or, such lower
rating as does not have an "r" highlight affixed to its rating
and have a predetermined fixed amount of principal due at
maturity (that cannot vary or change);
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of
the United States of America or any state thereof (or of any
corporation not so incorporated, provided that the commercial
paper is denominated in United States dollars and amounts payable
thereunder are not subject to any withholding imposed by any
non-United States jurisdiction) which is rated in the highest
short-term debt rating category of a Rating Agency or, such lower
rating as does not have an "r" highlight affixed to its rating,
has a predetermined fixed amount of principal due at maturity
(that cannot vary or change) and has a fixed interest rate or has
its interest rate tied to a single interest rate index plus a
single fixed spread, or any demand notes that constitute vehicles
for commercial paper rated in the highest unsecured commercial or
finance company paper rating category of a Rating Agency;
3
(v) units of money market funds which have as one of their
investment objectives the maintenance a constant net asset value
and which are rated in the highest applicable rating category of
a Rating Agency; or
(vi) any other investment approved in writing by the Purchaser;
provided that, except with respect to item (vi) above, (1) no
investment described hereunder shall evidence either the right to
receive (x) only interest with respect to such investment or (y) a
yield to maturity greater than 120% of the yield to maturity at par of
the underlying obligations, and (2) no investment described hereunder
may be purchased at a price greater than par if such investment may be
prepaid or called at a price less than its purchase price prior to
stated maturity (that cannot vary or change).
"Policy": As defined in Section 2.03(c)(5).
"Purchase Agreement": The Master Loan Purchase Agreement, dated as of
December 14, 1999, between FFCA Acquisition Corporation and Washington Mutual
Bank, FA, as the same may be amended, supplemented or otherwise modified from
time to time.
"Recordable Documents": The following documents:
(i) in the case of each Mortgage Loan and, to the extent applicable,
each Corporate Secured Loan, the Mortgage;
(ii) in the case of each Loan, to the extent applicable, any related
Assignment of Leases (if such item is a document separate from
the Mortgage);
(iii) an assignment of the Mortgage in favor of "Washington Mutual
Bank, FA and its successors and assigns";
(iv) an assignment of any related Assignment of Leases (if such item
is a document separate from the Mortgage), in favor of
"Washington Mutual Bank, FA and its successors and assigns"; and
(v) UCC Financing Statements in favor of the originator of such
Loan, together with UCC Financing Statements on Form UCC-2 or
UCC-3, as appropriate, in favor of "Washington Mutual Bank, FA
and its successors and assigns".
"Servicer": Franchise Finance Corporation of America, and its
permitted successors and assigns, pursuant to the Servicing Agreement.
4
"Servicing Agreement": The Servicing Agreement, dated as of December
14, 1999, between Franchise Finance Corporation of America as Servicer and
Washington Mutual Bank, FA as Owner, as the same may be amended, supplemented or
otherwise modified from time to time.
"Settlement Statement": With respect to each Loan, the settlement
statement prepared by the Title Company and executed by the Borrower and the
Seller that sets forth the allocation of the Escrow Funds.
"Transfer Documents": The following documents:
(i) in the case of a Mortgage Loan and, to the extent applicable, a
Corporate Secured Loan, an assignment of the Mortgage in favor
of "Washington Mutual Bank, FA and its successors and assigns";
(ii) an assignment of any related Assignment of Leases (if such item
is a document separate from the Mortgage) in favor of
"Washington Mutual Bank, FA and its successors and assigns"; and
(iii) UCC Financing Statements on Form UCC-2 or UCC-3, as appropriate,
in favor of "Washington Mutual Bank, FA and its successors and
assigns".
"Trust Receipt": As defined in Section 1.01 of the Master Bailee
Agreement.
ARTICLE II
SECTION 2.01. TITLE COMPANY TO ACT AS ESCROW AGENT. From time to time,
the Purchaser intends to purchase and the Seller intends to sell one or more
Loans originated by the Seller pursuant to and in accordance with the Purchase
Agreement. Each such purchase and sale of a Loan shall be evidenced by a Final
Purchase Terms Letter and any attachments thereto. Pursuant to the terms of this
Agreement, the Title Company may, from time to time, act as escrow agent on
behalf of the Seller and the Purchaser in connection with certain Loans.
SECTION 2.02. MASTER ESCROW AGREEMENT. The parties hereto agree and
acknowledge (i) that this Agreement (x) together with the escrow provisions
contained in the related Loan Documents and the Closing Instruction Letter sets
forth and controls the Title Company's rights, duties, responsibilities and
obligations with respect to each Loan sale and purchase under the Purchase
Agreement (and, in the event of any conflict between this Agreement, the escrow
provisions of the related Loan Documents and the Closing Instruction Letter,
this Agreement shall control), (y) sets forth certain of the Seller's and the
Purchaser's respective rights, duties, responsibilities and obligations with
respect to each Loan sale and purchase under the Purchase Agreement and (z)
shall continue to be in full force and effect with respect to each Loan sale and
purchase to be entered into from time to time, and (ii) that each shall be bound
by the terms of this Agreement with respect to each Loan sale and purchase.
5
SECTION 2.03. FUNDING PROCEDURES. In connection with the sale of a
Loan to the Purchaser for which the Funding Date is the same date as the Closing
Date:
(a) the Seller shall, on or before the Business Day preceding the
Closing Date for such Loan, deliver certain documents to the Bailee pursuant to
the Master Bailee Agreement, including the Recordable Documents;
(b) upon receipt of a Funding Notice and a Trust Receipt, the
Purchaser will wire or cause to be wired the Escrow Funds on the Funding Date to
the account of the Title Company in accordance with the Funding Notice;
(c) the following requirements must be satisfied before the Escrow
Funds may be disbursed by the Title Company:
(1) the Title Company shall have determined that the Recordable
Documents are in proper form for recording or filing, as
applicable;
(2) the Title Company shall have received all other documents
necessary to record or file, as applicable, the Recordable
Documents;
(3) the Title Company shall have received amounts sufficient to
pay (a) all title insurance premiums due with respect to the
issuance of the Policy, (b) all other sums required to be
paid in order to enable the Title Company to issue the
Policy, and (c) all recording, filing and documentary stamp
taxes and fees payable in connection with the Recordable
Documents (collectively, the "Taxes and Fees");
(4) the Title Company shall have determined that the legal
descriptions contained in the Recordable Documents, the
survey and the Policy to be issued are identical, or the
Title Company shall have issued an endorsement insuring
losses due to discrepancies in the legal descriptions
contained in such documents;
(5) the Title Company shall, in accordance with the Closing
Instruction Letter, be irrevocably committed to issue a
final title insurance policy naming as insureds in Schedule
A thereto the Seller and the Purchaser, and their successors
and/or assigns, as their interests may appear, insuring the
Mortgage as a first lien on the Borrower's interest in the
real property described in the Recordable Documents, and
otherwise in form and substance acceptable to the Seller
(the "Policy"); and
(6) the Title Company shall be in a position to record or file,
as applicable, the Recordable Documents in the appropriate
location; and
6
(d) upon satisfaction of all of the above requirements and upon
instructions from the Seller (or its counsel) by telephone that all other
requirements for closing have been satisfied, the Title Company shall do the
following:
(1) Disburse the Escrow Funds in accordance with the Closing
Instruction Letter and the Settlement Statement;
(2) Record or file, as applicable, the Recordable Documents at
the appropriate locations in accordance with the Closing
Instruction Letter;
(3) Pay all Taxes and Fees in connection with recording or
filing, as applicable, of the Recordable Documents; and
(4) Upon recordation or filing, as applicable, of the Recordable
Documents, promptly send the original Policy, issued in
accordance with the instructions contained herein, by
overnight courier to the Seller.
SECTION 2.04. ACKNOWLEDGMENT OF PREMIUMS. By acceptance of this
Agreement, the Title Company acknowledges that upon disbursement of Escrow Funds
in accordance with the escrow instructions contained herein, the title insurance
premiums will have been paid in full and the Policy shall constitute the
Seller's title insurance policy effective as of the date of such disbursement
until receipt of the original Policy.
SECTION 2.05. PERMITTED INVESTMENTS. If any Escrow Funds shall be held
overnight by the Title Company in any account other than a non-compensating
account established at Washington Mutual Bank, FA, the Title Company shall
invest such funds in Permitted Investments as directed by the Seller. Any gains
or losses in respect of such investments shall be for the account of the Seller.
SECTION 2.06. DISBURSEMENT.
(a) Upon disbursement of the Escrow Funds by the Title Company, the
Title Company agrees to accept all risks and liabilities for the issuance of the
Policy notwithstanding the fact that certain Recordable Documents may not have
been recorded or filed, and the Title Company agrees that the commitment to
issue the Policy in accordance with this Agreement is irrevocable.
(b) If for any reason the Escrow Funds have not been disbursed by the
Title Company pursuant to these instructions on or before 1:30 p.m. (applicable
Seattle, Washington time) on the (i) date upon which Escrow Funds are received
by the Title Company, the Title Company shall immediately notify the Seller for
further instructions and (ii) in the event the Escrow Funds have not been
disbursed within five Business Days after the date on which said Escrow Funds
are received by the Title Company, the Title Company shall return such Escrow
Funds to the Purchaser by wire transfer to the account designated by the
Purchaser.
SECTION 2.07. TRANSFER DOCUMENTATION. In the event that the Purchaser
purchases a Loan from the Seller after the Funding Date for such Loan, the Title
Company hereby agrees to record or file, as applicable, the related Transfer
7
Documents in accordance with the terms and conditions set forth in the related
Closing Instruction Letter upon receipt of the same from the Bailee.
SECTION 2.08. INTERPLEADER. The Title Company is authorized, in the
event any conflicting demand is made upon it concerning this Agreement, the
Closing Instruction Letter or the Loan Documents, at its election, to hold any
documents and/or funds deposited hereunder until an action shall be brought in a
court of competent jurisdiction to determine the rights of the Seller and the
Purchaser or to interplead such documents and/or funds in an action brought in
any such court. Deposit by the Title Company of such documents and funds, after
deducting therefrom its charges and its expenses and reasonable attorneys' fees
incurred in connection with any such court action, shall relieve the Title
Company of all further liability and responsibility for such documents and
funds.
ARTICLE III
SECTION 3.01. TERMINATION. At such time as the Purchase Agreement
expires or is terminated pursuant to the terms thereof, this Agreement shall
terminate and the Title Company shall be discharged from all obligations under
this Agreement and shall have no further duties or responsibilities in
connection herewith, except for those obligations that by their terms survive
such expiration or termination.
ARTICLE IV
SECTION 4.01. NOTICES. Except as otherwise expressly set forth in this
Agreement, all demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if (i) delivered personally, mailed
by overnight courier or registered or certified mail, return receipt requested,
or (ii) transmitted by telecopy (with a copy delivered by overnight courier) at
the address as follows:
(a) if to the Seller:
FFCA Acquisition Corporation
The Perimeter Center
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Executive Vice President and General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) if to the Purchaser:
Washington Mutual Bank, FA
Mailstop WMT-1020
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
8
Attention: Xxxxxx X. Xxxxxx
Senior Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(c) if to the Title Company:
[TITLE COMPANY]
________________________________________
________________________________________
Attention: ______________
Telephone: (___) ___-____
Telecopy: (___) ___-____
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 4.02. SEVERABILITY CLAUSE. Any part, provision, representation
or warranty 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 or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, 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 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 which prohibits or renders void or unenforceable any provision
hereof. If the invalidity of any part, provision, representation or warranty of
this Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good-faith, to
develop a structure that, as nearly as possible, has the same economic effect as
does this Agreement without regard to such invalidity.
SECTION 4.03. COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
SECTION 4.04. GOVERNING LAW. The Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with the
laws of the State of New York.
SECTION 4.05. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of and be enforceable by the Seller, the Purchaser and the
Title Company and the respective successors and permitted assigns of the Seller,
the Purchaser and the Title Company. This Agreement may not be assigned by the
Title Company, nor may its duties herein be delegated, without the prior written
9
consent of both the Seller and the Purchaser, each of which may be granted or
withheld in its sole discretion. This Agreement may not be assigned by the
Seller except to a Person that is also the successor by assignment to the
Seller's right, title and interest in the Purchase Agreement, nor may it be
assigned by the Purchaser except to a Person that is also the successor by
assignment to the Purchaser's right, title and interest in the Purchase
Agreement.
SECTION 4.06. WAIVERS. No term or provision of this Agreement may be
waived or modified unless such waiver or modification is in writing and signed
by the party against whom such waiver or modification is sought to be enforced.
SECTION 4.07. APPENDICES. The appendices and exhibits to this
Agreement are hereby incorporated and made a part hereof and are an integral
part of this Agreement.
SECTION 4.08. GENERAL INTERPRETIVE PRINCIPLES. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Sections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 4.09. FURTHER AGREEMENTS. The Seller, the Purchaser and the
Title Company each agree to execute and deliver to each other such reasonable
and appropriate additional documents, instruments or agreements as may be
necessary or appropriate to effectuate the purposes of this Agreement.
SECTION 4.10. DISPUTE RESOLUTION. Any dispute that arises under this
Agreement solely between the Seller and the Purchaser shall be a "Covered
Dispute" as defined in the Purchase Agreement and such dispute shall be resolved
in accordance with the dispute resolution mechanisms set forth in Section 9.10
of the Purchase Agreement. Any dispute that involves the Title Company is
specifically excluded from this Section.
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IN WITNESS WHEREOF, the Purchaser, the Seller and the Title Company
have caused their names to be signed hereto by their respective officers
thereunto duly authorized on the date first above written.
[TITLE COMPANY]
By:
------------------------------------
Name:
Title:
[SELLER]
By:
------------------------------------
Name:
Title:
WASHINGTON MUTUAL BANK, FA
By:
------------------------------------
Name:
Title:
And By:
------------------------------------
Name:
Title:
11
EXHIBIT K
RESERVED
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EXHIBIT L
FORM OF FUNDING NOTICE
[Date]
Washington Mutual Bank, FA
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Re: Master Loan Purchase Agreement, dated as of December 14,
1999 (the "Agreement)", between Washington Mutual Bank, FA
(the "Purchaser"), and FFCA Acquisition Corporation
Gentlemen:
Pursuant to Section 2.04 of the Agreement, [Seller] (the "Seller") hereby
notifies the Purchaser that a funding is to occur on [___________], [______]
(the "Closing Date"), which is a Business Day. The borrower(s), the Loan
identification number(s) and the property address(es) with respect to the
related Loan Group are set forth on Schedule 1 hereto. The Purchase Price
calculation is set forth in Schedule 2 hereto. On the Closing Date, the
Purchaser is to wire funds in accordance with the wiring instructions on
Schedule 3 hereto. By delivery of this Funding Notice, the Seller is deemed to
make to the Purchaser, on the related Closing Date, all of the representations
and warranties set forth in Sections 5.01 and 5.02, except as set forth in the
related Final Purchase Terms Letter and attachments thereto or as disclosed to,
and approved by, the Purchaser.
Very truly yours,
[SELLER],
Seller
By:
Name:
Title:
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Schedule 1
(Loan Schedule)
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Schedule 2
(Purchase Price Calculation)
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Schedule 3
(Wiring Instructions)
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EXHIBIT M
PURCHASER'S FUNDING REPRESENTATIVE(S)
Xxxxxx X. Xxxxxxx
Telephone number: (000) 000-0000
Telecopy number: (000) 000-0000
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EXHIBIT N
PURCHASER'S ORIGINATION REPRESENTATIVE(S)
Xxxxxx X. Xxxxxx
Telephone number: (000) 000-0000
Telecopy number: (000) 000-0000
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EXHIBIT O
SELLER'S REPRESENTATIVE(S)
Xxxxxx X. Xxxx
Telephone number: (000) 000-0000
Telecopy number: (000) 000-0000
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SCHEDULE 1
Information Included in Loan Proposal
With respect to any Prospective Loan:
(a) description of any deviation from or exception to the Guidelines and
Manual;
(b) the related loan application, if any;
(c) copy of audited or, if no audited financials are available, internally
prepared financial information for the prospective Borrower and any guarantors
(if applicable) for the last two fiscal years and most recent interim period;
(d) tax returns for the prospective Borrower and any guarantors (if
applicable) for the preceding year;
(e) background information (biographies, resumes, etc.) on the prospective
Borrower and any guarantors (if applicable);
(f) results of all available trade and credit checks for the prospective
Borrower and any guarantors (if applicable);
(g) copy of FFCA's Management Practices Survey;
(h) unit level economic analysis for each Chain Store Facility proposed to
be financed; and
(i) the related Single Borrower Group Concentration that will exist on the
Closing Date of the Prospective Loan in respect of the related Borrower Group.
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SCHEDULE 2
Material Changes to Approved Loan
With respect to any Approved Loan:
(a) Any change in the principal amount, rate of interest, the Stated
Maturity Date or amortization schedule;
(b) In the case of an Adjustable Rate Loan, any change in the Gross Margin,
the Negative Amortization Cap, the Minimum Rate or the Maximum Rate;
(c) Any change in the minimum Fixed Charge Coverage Ratio, Corporate Fixed
Charge Coverage Ratio (if applicable) and net worth covenant (if applicable);
(d) Any change that would cause such Loan not to conform to the Guidelines
and Manual in all material respects; and
(e) Any change in the identity or material financial terms of the
obligations of any guarantor.
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SCHEDULE 3
Variations to the Seller's Form Loan Documents in Approved Form
With respect to the Seller's form Loan Documents in Approved Form, any
change or variation which:
(a) Changes the remedial provisions in the Seller's form Loan Documents in
Approved Form other than as required to conform to applicable state law;
(b) Changes the provisions by which the liens and security interests in the
Collateral are granted or created;
(c) Causes any Approved Loan not to conform to the Guidelines and Manual in
all material respects;
(d) Modifies the leasehold mortgagee protection provisions referenced in
Section 5.02(bb);
(e) Modifies any payment or indemnification provisions, including
reimbursement for costs, expenses and fees and the capitalization of advances;
and
(f) Obligates the Purchaser to release any portion of the Collateral or any
guarantor before the Loan is repaid in full, or adds nonrecourse provisions.
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SCHEDULE 4
Required Endorsements
Always (to the extent available)
ALTA 9 Extended Coverage (if not available, use
CLTA 100)
CLTA 103.7 Access (by abutting public street) (or
CLTA 103.4 if access by appurtenant
easement)
CLTA 116.1 Survey
AS APPLICABLE IN ACCORDANCE
WITH THE GUIDELINES AND MANUAL
(TO THE EXTENT AVAILABLE)
Creditors Rights Exclusive Endorsement
(Lender)
Participating Interest (or Shared
Appreciation)
ALTA 6.2 Variable Rate/Negative Amortization (or
CLTA 111.8)
ALTA 12 Aggregation/Tie In
Last Dollar Endorsement (a.k.a.
Application of Mortgage Payments)
CLTA 116.4 Contiguity
CLTA 100.29 Surface Disturbance
CLTA 116.7 Subdivision
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