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EXHIBIT 10.9
WHOLE SALE LOAN AGREEMENT
I. THIS AGREEMENT ("This Agreement") is made and entered into in the State
of Georgia by and between Credit Depot Corporation a corporation
organized and existing under the laws of the State of Delaware (herein
called "Seller"), and First Bankshares Mortgage and Investments, Inc.
(herein called "Buyer"), for and in consideration of TEN DOLLARS
($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged.
II. This Agreement, under which from time to xxxx Xxxxxx may offer to sell
and Buyer may agree to buy from Seller certain loans evidenced by
promissory notes and secured by deeds to secure debt conveying
interests in real estate (collectively, "Mortgages" and, individually,
"Mortgage") shall be subject to the warranties, representations and
agreements set forth herein. Provided, however, Buyer shall be under no
obligation to purchase any mortgage unless Buyer notifies Seller, in
writing, of its intent to purchase an individual mortgage.
III. Seller represents and warrants to buyer as follows:
A. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and
it possesses the requisite corporate authority to enter into
this Agreement and to consummate all the transactions
contemplated hereby.
B. The execution, delivery and performance of this Agreement has
been duly authorized by Seller and all corporate proceedings
necessary to consummate all the transactions contemplated by
this Agreement have been taken by Seller.
C. Seller is fully licensed, qualified to do business, and in
good standing in each state in which it does business and in
which is located the real property securing and Mortgage
offered by Seller to Buyer hereunder.
D. The execution and delivery of this Agreement and sale of any
and all Mortgages hereunder are not and will not be a breach,
violation or event of default (or an event which would become
an event of default with the lapse of time or notice or both)
under any judgment, decree, note, agreement, indenture or
other instrument to which Seller is a party or otherwise
subject.
E. Neither the making of a Mortgage nor the consummation of the
transactions contemplated by this Agreement will result in a
violation or infraction by Seller of any applicable federal,
state or local law, 'rule or regulation.
F. Upon execution and delivery of this Agreement, it shall be a
valid and binding obligation of Seller, enforceable in
accordance with its terms.
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G. As of the date of this Agreement, there is no pending or
threatened litigation, adverse claim or action, of any kind or
nature against Seller. Seller agrees to promptly notify Buyer
of the subsequent existence of any such pending or threatened
litigation, adverse claim or action.
H. Each Mortgage sold to Buyer hereunder shall constitute a
valid, genuine and enforceable first or second lien against
the real property conveyed thereunder, will have been duly
executed, acknowledged and filed for recording or recorded
prior to the date of sale to Buyer, and is and will continue
to be free from claims, defenses, setoffs, and counterclaims.
I. Seller has the sole, full and complete title to each Mortgage
and each instrument and document relating thereto, which
Mortgage and any other interest conveyed by Seller to Buyer
shall be free and clear of all claims of any other person or
entity, and Seller has full power and authority to sell,
transfer and assign the same on the terms herein set forth;
and there has been no assignment, sale or hypothecation
thereof by Seller.
J. The full principal amount, less discount points, of the
Mortgages has been advanced to the mortgagor, either by
payment made directly to the mortgagor or by payment made on
mortgagor's request or approval; the original unpaid principal
balance outstanding under the Mortgage is as stated in the
applicable loan documents; all costs, fees, and expenses
incurred in making, closing and recording the Mortgage have
been paid; neither the mortgaged property, nor any portion
thereof, has been released from the Mortgage; the terms of the
Mortgage have in no way been changed, amended or modified; and
the Mortgage is current and not in default.
K. All signatures, names and addresses, amount and other
statements of the fact, including descriptions of the
property, appearing on the credit application and other
related documents relating to each Mortgage are true and
correct and the mortgagors named thereon were, as of the date
of each such document upon which signatures appear, of
majority age, and had the legal capacity to enter into the
Mortgage.
L. Seller will have paid or caused to be paid when due any and
all applicable taxes or fees to any governmental entity
arising out of the making, acquisition, collection, holding or
assignment of such Mortgage or the underlying property (except
taxes measured by Buyer's net income).
M. Each Mortgage which Seller wan-ants is insured by a private
mortgage insurance company shall be so insured.
N. Seller shall provide evidence satisfactory to Buyer that each
Mortgage has been preapproved by a third party investor (each
such investor shall herein be called a "Third Party Investor")
and that all such terms and conditions required by any such
Third
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Party Investor to be performed or met by Seller or any other
party have been met prior to the closing of each such
Mortgage.
O. All loan applications shall comply with all applicable federal
and state laws and regulations including, but not limited to,
the Equal Credit Opportunity Act, Real Estate Settlement
Procedures Act, Truth-In-Lending Act and Fair Credit Reporting
Act.
P. Each Mortgage sold hereunder shall be accompanied by all
documentation required under all applicable federal and state
laws and regulations regarding loans purchased by insured
financial institutions.
Q. Each Mortgage and note conveyed shall have been closed by an
attorney who is an approved attorney of an American Land Title
Association Company ("ALTA").
R. Seller has previously furnished Buyer with copies of its
respective financial statements (the "Financial Statements").
Seller represents and warrants that the Financial Statements
were prepared in accordance with generally accepted accounting
principals and accurately portray its financial condition as
of the date of this Agreement. Seller will within thirty (30)
days of the conclusion of each of its fiscal quarters furnish
Buyer with a copy of its quarterly financial statements.
Seller will within seventy-five (75) days of the conclusion of
its fiscal year furnish Buyer with a copy of its annual
financial statements. Such financial statements will be
audited by independent public accountants, will conform to
generally accepted auditing standards and will be furnished
directly to Buyer by Seller's independent public accountants.
All such warranties and representations shall continue throughout the
term of this Agreement and shall survive this Agreement.
IV. Seller agrees to do all acts necessary to perfect title to the
Mortgages, and shall sell, assign, and deliver to Buyer with respect to
the purchase of each Mortgage the following documents, all subject to
the approval of Buyer as to proper form and execution:
A. The original Mortgage note properly endorsed by Seller to
Buyer.
B. A conformed copy of the original Deed to Secure Debt
accompanied by those documents and instruments necessary to
record and perfect ownership.
C. Mortgagee title insurance commitment policy (if applicable),
with any and all exceptions set forth therein being subject to
the approval of Buyer, and a proper assignment of such
commitment or policy in the event a Mortgage assignment is
being placed on record.
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D. Copy of Survey of the real property securing each such
Mortgage note, identifying such property by address and legal
description (if applicable).
E. Copies of Hazard insurance policies meeting standard
specifications.
F. A copy of the loan application package for each Mortgage
meeting normal current market/investor conditions as required
by the commitment letter described in Section K below.
G. Copy of Appraisal of the real estate securing each Mortgage
note, which appraisal shall meet requirements established by
the Federal Deposit Insurance Corporation, the Department of
Banking and Finance of the State of Georgia, and the Buyer.
H. Insured closing letter issued by an ALTA company insuring the
attorney(s) selected and approved in accordance with section
III.Q. hereof.
I. Transfer and Assignment with respect to each Mortgage executed
by Seller in favor of Buyer and in recordable form.
J. Transfer and Assignment of Mortgage from Buyer to Third Party
Investor.
K. Copy of Third Party Investor commitment letter or letter of
predelegated authority acceptable to Buyer.
L. Copy of closing instructions from Seller and/or Third Party
Investor on behalf of Seller, as applicable.
M. Copy of Mortgage payment notification or transfer of
servicing.
V. The procedures for the handling and funding of each Mortgage are as
follows:
A. Upon the funding of each Mortgage by Buyer, as described in
Section V.B. below, Seller shall pay to Buyer a handling fee
on each Mortgage funded by Buyer as set forth on the Cost and
Fee Schedule, attached hereto as Schedule A (the "Handling
Fee"). From and after the date of such funding through the
date the respective Third Party Investor delivers all funds to
Buyer, on behalf of Seller, required to purchase such
Mortgage, Seller shall pay interest on the amount funded by
Buyer at a per annum rate as set forth on Schedule A and
adjusted for product type, as shown in The Wall Street
Journal, adjusted daily. Unless otherwise agreed in writing by
and between the parties hereto, Seller shall pay all accrued
interest on the amount so funded on those dates which the
respective mortgagor is required, under said mortgagor's loan
documents to pay interest on such Mortgage to the holder
thereof.
B. After approval by Buyer and the respective Third Party
Investor of each Mortgage submitted to Buyer for funding, each
such Mortgage shall be closed by an attorney or
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attorneys at law selected by Seller and approved by Buyer,
which approval shall not be unreasonably withheld or denied,
in the name of Seller. Subsequent to such approvals being
obtained by Seller, and after Seller provides notice of such
closing to Buyer, which notice shall be given not less than
twenty-four (24) hours prior to closing, Buyer shall provide
closing funds (the "Closing Funds") as provided below:
a. Buyer shall deposit the Closing Funds in a trust
account with First Bank of Georgia or an attorneys
trust account at a bank other than First Bank of
Georgia (upon payment of a processing fee subject to
increase as set forth in Schedule A) in the name of
the closing attorney upon receiving notice from the
closing attorney that all closing documents, as
required herein, have been prepared and the Mortgage
will be closed within one business day; and
b. the Closing Funds shall equal the face amount of the
promissory note executed by such mortgagor, less any
discount points paid by or for the account of such
mortgagor.
C. At closing and contemporaneously with the funding of each
Mortgage hereunder, Seller shall endorse the note to Buyer and
execute the transfers and assignments described in Section IV
hereof. Buyer, upon receipt of notice from Seller, Seller's
satisfaction of its obligations under this Agreement, and
provided that Seller is not in default under the terms of this
Agreement or under the terms of any other agreement with the
Buyer, shall endorse said note to the appropriate Third Party
Investor.
Seller hereby agrees to deliver such original note, along with
the assignment described in Section IV.J. hereof, to the Third
Party Investor with instructions to such investor as to hold
such note and assignment in trust for Buyer until full payment
for such Mortgage has been received by Buyer. Buyer reserves
the option, at its sole and absolute discretion, to require a
master trust agreement from each Third Party Investor whereby
such investors agree to hold all notes, assignments and
Mortgage documents presented thereto in trust for Buyer until
full payment is made therefor, and Seller hereby agrees to
assist Buyer in obtaining such trust agreements from such
Third Party Investor. Funding by the Third Party Investor
which has pre-approved each such Mortgage will be made to
Buyer by wire transfer or delivery of a certified check to
Buyer at the time that such investor purchases each such
Mortgage. Upon receipt of funds, and the satisfaction of all
Seller's obligations to Buyer, Buyer shall remit any surplus
to Seller.
VI. Promptly upon demand of Buyer, Seller shall repurchase at the
Repurchase Price (as hereinafter defined), without recourse, and
Mortgage with respect to which, either:
A. Any representation or warranty of Seller contained in this
Agreement shall prove at any time to be incorrect in any
material respect; or
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B. Any contention shall have been raised by mortgagor, or on
behalf of mortgagor or a Third Party Investor, that there has
been a violation of, or failure to comply with, any federal or
state law or regulation which would give rise to a right of a
mortgagor to refuse further payment of a Mortgage and/or seek
a refund of amounts previously paid and/or claim a penalty of
any kind or nature; or provided however, that Seller's
repurchase obligation shall not be triggered by a contention
of a mortgagor regarding a violation of or a failure to comply
with a federal or state law or regulation which resulted from
an act or omission of an agent or employee of Buyer; or
C. The respective Third Party Investor has not purchased the
Mortgage in accordance with its commitment letter, as provided
in section IV.K. hereof, within the number of days (as set
forth on Schedule A for the applicable product type) after
Buyer has funded such Mortgage.
VII. Seller agrees to fulfill its obligation to repurchase any loan
described above in Section VI hereof by paying to Buyer the Repurchase
Price, which shall equal the total unpaid balance thereof, including
principal, earned interest, and accrued charges, fees and penalties
plus all costs and expenses, including without limitation, reasonable
attorney's fees and expenses, collection, Mortgage foreclosures, and
sales expenses, if any, theretofore incurred by Buyer in enforcing its
rights in such Mortgage or in enforcing its rights pursuant to this
Agreement. Buyer's prior knowledge of any breach by Seller of any of
the foregoing prior to or at the time of purchase, or any time
thereafter, of the Mortgage, or any delay by Buyer in making demand
hereunder, shall neither impair Seller's rights nor constitute waiver
of Buyer's rights hereunder.
VIII. Upon receipt of such repurchase payment from seller pursuant to Section
VII hereof, Buyer shall transfer to Seller the Mortgage and Buyer's
right, title and interest in the Mortgage property described therein by
separate written endorsements and assignments which shall be without
recourse to Buyer and without any warranties , expressed or implied.
Until such time as Buyer has received such payment in full, Buyer may
continue to liquidate the Mortgage, and Seller shall remain liable for
any deficiency, including all of Buyer's expenses.
IX. Buyer may, by notice to Seller, terminate this Agreement as to
Mortgages being purchased if:
A. Seller, in the sole option of the Buyer and after fifteen (15)
days' prior notice, fails to perform its obligations
hereunder; or
B. Seller becomes insolvent or bankrupt or is placed under
conservatorship or receivership; or
C. Seller assigns or attempts to assign its rights and
obligations hereunder, without written consent of Buyer; or
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D. Buyer, in its sole opinion, determines that regulatory
considerations, business practices of Seller, or otherwise
determines that it is in the Buyer's best interest to
terminate this Agreement.
X. Seller agrees to indemnify and hold Buyer harmless from, and on demand
by Buyer, pay Buyer for, any damages, losses, costs and expenses
resulting from any and all actions, suits, proceedings, demands,
assessments, judgments, or claims, including reasonable legal and other
expenses actually incurred and paid incident to any claim (other than a
claim based exclusively on Buyer's conduct), by any third party or
parties in connection with Mortgages purchased by the Buyer hereunder,
including, without limitation, any claim for taxes (other than income
taxes payable by Buyer), by any state of the United States, territory
or political subdivision thereof. The indemnification contained herein
shall survive the termination of this Agreement.
XI. Buyer agrees to indemnify and hold Seller harmless from, and on demand
by Seller, pay Seller for, any damages, losses, costs and expenses
resulting from any and all actions, suits, proceedings, demands,
assessments, judgments, or claims, including reasonable legal and other
expenses actually incurred and paid incident to any claims based
exclusively on Buyer's conduct or the sufficiency or legality of any
form or document supplied by Buyer to Seller, by any third party or
parties in connection with Mortgages purchased by Buyer and Seller
hereunder. The indemnification contained herein shall survive the
termination of this Agreement.
XII. This Agreement may be terminated as to the future acceptance of
Mortgages by either party at any time upon giving forty-five (45) days
written notice of termination to the other party, and except as
provided in Section IX.D., such termination shall not in any respect
change or modify the obligation of Seller with respect to the Mortgages
already accepted.
XIII. This Agreement shall be constructed in accordance with the laws of the
State of Georgia except that the provisions of this Agreement with
respect to remedies regarding the Mortgages are intended to comply with
the laws of the jurisdiction where such Mortgages are recorded, and any
provisions hereof, or of the Mortgages, not so complying shall be
deemed to be modified accordingly in the manner and to the extent which
shall best effect the intentions and purposes reflected in and
contemplated by this Agreement. The invalidity or unenforceability of
any provision or provisions of the Mortgages or this Agreement shall
not affect the validity or enforceability of any other provisions
thereof and hereof.
XIV. In the event of a dispute between parties hereto or their successors,
arising out of this Agreement, the prevailing party shall be entitled
to recover costs, including reasonable attorney's fees actually
incurred in connection therewith.
XV. This Agreement shall bind and benefit the respective successors and
assigns of Seller and Buyer. No other person or entity is intended to
be benefited hereby. Notwithstanding the foregoing, Seller shall have
no power or right to assign this Agreement or any of its rights
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or obligations hereunder and any attempt to do so, without prior
written consent of Buyer, shall be voidable by Buyer at its option.
XVI. Buyer's omission or delay to exercise any of its optional or absolute
rights to remedy under this Agreement shall not constitute a waiver by
Buyer, nor operate to bar Buyer from the exercise of any such rights.
Any waiver by Buyer and any default shall not operate as a waiver of
any other subsequent default. All rights and remedies provided to Buyer
herein are not exclusive of any other remedies at law or equity, are
cumulative and not alternative, and may be exercised by Buyer
simultaneously or in such order as Buyer deems to be in its interest.
XVII. This document contains the entire agreement between the parties hereto
and cannot be modified in any respect except by an amendment in writing
signed by both parties.
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IN WITNESS WHEREOF, each party has caused its corporate seal to be
affixed hereto and this instrument to be signed in its corporate name on its
behalf by its proper officials duly authorized.
This 14th day of December, 1997.
SELLER
Credit Depot Corporation
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Attest: /s/ Xxxxxxxxxx X. Xxxxx By: /s/ Xxxxx XxXxx
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Name: Xxxxxxxxxx X. Xxxxx Name: Xxxxx XxXxx
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Title: Vice-President & Secretary Title: President
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(CORPORATE SEAL)
BUYER:
First Bankshares Mortgage
and Investment, Inc.
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Attest: By: /s/ Xxxxxx X. Xxxxxx
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Name: Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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(CORPORATE SEAL)
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