DLJ MORTGAGE CAPITAL, INC.
and
BNC MORTGAGE, INC.
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of March __, 1998
FIXED AND ADJUSTABLE RATE MORTGAGE LOANS
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TABLE OF CONTENTS
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SECTION 1. Definitions................................................... 1
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SECTION 2. Agreement to Purchase......................................... 6
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SECTION 3. Conveyance of Mortgage Loans.................................. 8
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SECTION 4. Late Payment Charges and Prepayment Charges;
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Seller's Repurchase Right............................... 11
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SECTION 5. Examination of Mortgage Files and Due Diligence Review........ 12
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SECTION 6. Representations, Warranties and Covenants of the Seller....... 13
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SECTION 7. Cure, Repurchase and Indemnity Obligations of the Seller...... 15
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SECTION 8. Representations and Warranties of the Purchaser............... 16
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SECTION 9. Closing....................................................... 17
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SECTION 10. Closing Documents............................................. 18
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SECTION 11. Information to be Provided by the Seller...................... 18
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SECTION 12. Indemnification............................................... 20
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SECTION 13. Costs......................................................... 22
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SECTION 14. Servicing..................................................... 22
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SECTION 15. Notices....................................................... 22
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SECTION 16. Severability of Provisions.................................... 23
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SECTION 17. Survival; Third Party Beneficiary............................. 23
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SECTION 18. Governing Law................................................. 23
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SECTION 19. Successors and Assigns........................................ 23
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SECTION 20. Waiver........................................................ 23
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SECTION 21. Headings...................................................... 24
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Page
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SECTION 22. Intention of the Parties...................................... 24
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SECTION 23. Counterparts.................................................. 24
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SECTION 24. Further Assurances............................................ 24
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EXHIBIT 1 MORTGAGE LOAN SCHEDULE
EXHIBIT 2 OFFICERS' CERTIFICATE
EXHIBIT 3 FORM OF RESOLUTIONS
EXHIBIT 4 FORM OF OPINION LETTER OF COUNSEL TO THE SELLER
EXHIBIT 5 FORM OF CONFIRMATION LETTER
EXHIBIT 6 SELLER REPRESENTATIONS AND WARRANTIES
EXHIBIT 7 FORM OF CROSS RECEIPT
EXHIBIT 8 FORM OF ASSIGNMENT AND CONVEYANCE
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MASTER MORTGAGE LOAN PURCHASE AGREEMENT
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This Master Mortgage Loan Purchase Agreement ("Agreement"), dated as of
March __, 1998, is made between DLJ Mortgage Capital, Inc., a Delaware
corporation (the "Initial Purchaser" and the Initial Purchaser or any person or
entity, if any, to which the Initial Purchaser has assigned its rights and
obligations hereunder as Purchaser with respect to a Mortgage Loan, and each of
their respective successors and assigns, the "Purchaser") and BNC Mortgage,
Inc., a Delaware corporation (the "Seller").
PRELIMINARY STATEMENT
The Seller has agreed to sell, and the Purchaser has agreed to
purchase, from time to time certain fixed and adjustable rate, first lien
residential mortgage loans pursuant to this Agreement. (The fixed rate mortgage
loans and the adjustable rate mortgage loans are referred to herein as the
"Fixed Rate Mortgage Loans" and the "Adjustable Rate Mortgage Loans,"
respectively, and are collectively referred to herein as the "Mortgage Loans.")
Certain of the Adjustable Rate Mortgage Loans may be subject to negative
amortization (each, a "Negative Amortization Mortgage Loan"), and certain of the
Mortgage Loans may include a graduated payment period. The Mortgage Loans to be
purchased hereunder will be identified on one or more Mortgage Loan Schedules
(as defined herein), each such schedule to be annexed hereto as Exhibit 1 or a
supplement thereto, as such schedule may be amended to reflect the Mortgage
Loans accepted by the Purchaser pursuant to the terms of Section 5 hereof. The
Mortgage Loans will be delivered as whole mortgage loans on one or more Closing
Dates (as defined herein) and are expected to be transferred by or on behalf of
the Purchaser as part of one or more Whole Loan Transfers or Pass-Through
Transfers (each as defined herein) on or subsequent to the related Closing
Dates.
In consideration of the mutual agreements herein contained, the
Purchaser and the Seller hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used herein and not otherwise
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defined herein shall have the following meanings:
"Assignment and Conveyance": With respect to each Mortgage Loan, the
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assignment and conveyance of such Mortgage Loan from the Seller to the Purchaser
or its designee, substantially in the form of Exhibit 8 annexed hereto.
"Business Day": Any day other than a Saturday or Sunday or a day on
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which banking institutions and savings and loan associations in the states in
which the principal places of business of the Seller, the Purchaser, the
Servicer or the Custodian (each as defined herein) are located are authorized or
obligated by law or executive order to be closed.
"Certificates": The mortgage pass-through certificates to be issued in
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one or more series by a trust or trusts sponsored by the Purchaser or an
affiliate of the Purchaser as part of a
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Pass-Through Transfer, which certificates evidence an interest in some or all of
the Mortgage Loans.
"Closing Date": With respect to each Mortgage Loan, the date specified
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in the related Confirmation Letter or such other date as shall be mutually
acceptable to the parties hereto on which such Mortgage Loan is sold to the
Purchaser pursuant to this Agreement.
"Collateral Value": The appraised value of a Mortgaged Property based
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upon the lesser of (i) the appraisal (as reviewed and approved by the Seller)
made at the time of the origination of the related Mortgage Loan, or (ii) the
sales price of such Mortgaged Property at such time of origination. With
respect to a Mortgage Loan the proceeds of which were used to refinance an
existing mortgage loan, the appraised value of the Mortgaged Property based upon
the appraisal (as reviewed and approved by the Seller) obtained at the time of
refinancing.
"Confirmation Letter": With respect to the Mortgage Loans to be
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included in any Mortgage Loan Package, a letter agreement between the Purchaser
and the Seller, substantially in the form of Exhibit 5 annexed hereto and
specifying the terms and conditions contemplated hereby and such other terms and
conditions as the Purchaser and the Seller shall agree.
"Custodian": Bankers Trust Company of California, N.A. or any other
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custodian under a custody agreement among any custodian, the Seller and the
Purchaser for the custody of the Mortgage Loans and the documents related
thereto.
"Cut-off Date": With respect to each Mortgage Loan, the day specified
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as such in the related Assignment and Conveyance.
"Gross Margin": With respect to each Adjustable Rate Mortgage Loan,
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the fixed rate set forth in the related Mortgage Note to be added to the related
Index on each Interest Rate Adjustment Date in accordance with the terms of such
Mortgage Note to determine the Mortgage Rate for such Mortgage Loan.
"Index": With respect to each Adjustable Rate Mortgage Loan, the index
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set forth in the related Mortgage Note to which the related Gross Margin is
added on each Interest Rate Adjustment Date in accordance with the terms of such
Mortgage Note to determine the Mortgage Rate for such Mortgage Loan.
"Interest Rate Adjustment Date": With respect to each Adjustable Rate
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Mortgage Loan, the date set forth in the related Mortgage Note on which the
Mortgage Rate is adjusted in accordance with the terms of the Mortgage Note.
The first Interest Rate Adjustment Date as to each Adjustable Rate Mortgage Loan
is set forth in the Mortgage Loan Schedule.
"Loan-to-Value Ratio": As of any date, the fraction, expressed as a
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percentage, the numerator of which is the principal balance of the related
Mortgage Loan as of the date of
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determination and the denominator of which is the Collateral Value of the
related Mortgaged Property.
"Maximum Principal Amount": With respect to each Negative Amortization
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Mortgage Loan, the amount set forth in the related Mortgage Note as the maximum
principal amount thereunder.
"Maximum Rate": With respect to each Adjustable Rate Mortgage Loan,
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the amount set forth in the related Mortgage Note as the maximum interest rate
to which the Mortgage Rate may be increased over the life of the Mortgage Loan
as stated in the Mortgage Note.
"Minimum Rate": With respect to each Adjustable Rate Mortgage Loan,
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the amount set forth in the related Mortgage Note as the minimum interest rate
to which the Mortgage Rate may be decreased over the life of the Mortgage Loan
as stated in the Mortgage Note.
"Mortgage": The mortgage, deed of trust or other instrument creating a
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first lien or a first priority ownership interest in either an estate in fee
simple or a leasehold estate in real property securing a Mortgage Note,
including all required riders, addenda or amendments thereto.
"Mortgage Loan Package" Each pool of Mortgage Loans sold on any
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Closing Date and listed on a Mortgage Loan Schedule attached to this Agreement
on the Closing Date.
"Mortgage Loan Schedule": With respect to each Mortgage Loan Package,
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the schedule of Mortgage Loans annexed hereto as Exhibit 1 for the initial
Closing Date or a supplement thereto for subsequent Closing Dates (as revised to
reflect the Mortgage Loans accepted by the Purchaser pursuant to the terms of
Section 5 hereof), which shall set forth the following information with respect
to each Mortgage Loan in such Mortgage Loan Package:
I. the loan number and first and last name of the primary Mortgagor;
(i) xxx xxxxxx xxxxxxx, xxxx, xxxxx and zip code of the
Mortgaged Property;
(ii) (A) if such Mortgage Loan is a Fixed Rate Mortgage Loan, the
monthly payment and the Mortgage Rate set forth in the
related Mortgage Note, (B) if such Mortgage Loan is an
Adjustable Rate Mortgage Loan, the monthly payment and
Mortgage Rate at origination;
(iii) the maturity date;
(iv) the original principal balance;
(v) the first payment date;
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(vi) if such Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Index and the Gross Margin;
(vii) if such Mortgage Loan is an Adjustable Rate Mortgage Loan,
the first Interest Rate Adjustment Date, and if such
Adjustable Rate Mortgage Loan is a Negative Amortization
Mortgage Loan, the first Payment Adjustment Date;
(viii) if such Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Periodic Rate Cap and if such Adjustable Rate Mortgage
Loan is a Negative Amortization Mortgage Loan, the Payment
Adjustment Cap and the initial payment date, if any, as to
which the Payment Adjustment Cap shall no longer be
applicable;
(ix) if such Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Interest Rate Adjustment Date frequency, and if such
Adjustable Rate Mortgage Loan is a Negative Amortization
Mortgage Loan, the Payment Adjustment Date frequency;
(x) if such Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Minimum Rate and the Maximum Rate, and if such
Adjustable Rate Mortgage Loan is a Negative Amortization
Mortgage Loan, the Maximum Principal Amount;
(xi) the unpaid principal balance as of the Cut-off Date;
(xii) if such Mortgage Loan is an Adjustable Rate Mortgage Loan,
the Mortgage Rate as of the Cut-off Date;
(xiii) the occupancy status (primary, secondary or investor);
(xiv) the purpose of the Mortgage Loan;
(xv) the Collateral Value of the Mortgaged Property;
(xvi) the original term to maturity;
(xvii) whether or not the Mortgage Loan provides for a principal
prepayment penalty;
(xviii) the credit grade of the Mortgagor;
(xix) the related Cut-off Date and Closing Date;
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(xx) a code indicating whether the Mortgaged Property is a
one-family residence, a two- to four-family residence, a
condominium unit or a unit in a planned unit development;
(xxi) the paid-through date as of the related Closing Date;
(xxii) if the Mortgaged Property is a two- to four-family
residence, the number of dwelling units in the Mortgaged
Property;
(xxiii) whether the Mortgagor has a leasehold interest or a fee
simple interest in the Mortgaged Property;
(xxiv) with respect to each Graduated Payment Mortgage Loan, the
date on which the graduated payment periods terminate;
(xxv) with respect to each Graduated Payment Mortgage Loan, the
Mortgage Rates that are applicable to the initial
payments under the Mortgage Loan;
(xxvi) (A) whether the Mortgage Loan is a Fixed Rate Mortgage
Loan or an Adjustable Rate Mortgage Loan, (B) if such
Mortgage Loan is an Adjustable Rate Mortgage Loan,
whether such Mortgage Loan is a Negative Amortization
Mortgage Loan, and (C) if such Adjustable Rate Mortgage
Loan is a Graduated Payment Mortgage Loan;
(xxvii) A code indicating whether the related Mortgaged Property
was subject at origination to financing that was
subordinate to the lien of the Mortgage Loan; and
(xxviii) A code indicating the underwriting category pursuant to
which the Mortgage Loan was originated.
Exhibit 1 shall be supplemented as of each Closing Date to reflect
the addition of the Mortgage Loan Schedule for each related Mortgage Loan
Package (as such schedule may be amended to reflect the Mortgage Loans accepted
by the Purchaser pursuant to the terms of Section 5 hereof).
"Mortgage Note": The note or other evidence of the indebtedness of
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a Mortgagor under a Mortgage Loan.
"Mortgage Rate": With respect to each Mortgage Loan, the annual
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rate at which interest accrues on such Mortgage Loan, as adjusted from time to
time in accordance with the provisions of the related Mortgage Note in the case
of an Adjustable Rate Mortgage Loan.
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"Mortgaged Property": The real property, including all buildings,
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structures, improvements or fixtures thereon and all appurtenances, water
rights, privileges and benefits appertaining thereto, that is conveyed, pledged
or mortgaged, or in which a security interest is granted, pursuant to a
Mortgage, to secure the payment and performance of a Mortgage Loan.
"Mortgagor": The obligor or obligors on a Mortgage Note.
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"Officers' Certificate": A certificate signed by the Chairman of the
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Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the person on behalf of whom such certificate is being
delivered.
"Pass-Through Transfer": The sale or transfer of some or all of the
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Mortgage Loans on one or more dates by the Purchaser or an affiliate of the
Purchaser to a trust or trusts to be formed as part of a public offering or
private placement of mortgage-backed securities.
"Payment Adjustment Cap": With respect to each Negative Amortization
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Mortgage Loan and each Payment Adjustment Date occurring prior to the initial
payment date on which such cap is no longer applicable, the amount (expressed as
a percentage) by which the monthly payment on such Negative Amortization
Mortgage Loan due in the month preceding such Payment Adjustment Date is
multiplied for purposes of calculating the maximum amount to which the monthly
payment may be adjusted.
"Payment Adjustment Date": With respect to each Negative Amortization
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Mortgage Loan, the date set forth in the related Mortgage Note on which the
amount of the monthly payment thereon is scheduled to change. The first Payment
Adjustment Date as to each Negative Amortization Mortgage Loan is set forth in
the Mortgage Loan Schedule.
"Periodic Rate Cap": With respect to each Adjustable Rate Mortgage
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Loan and each Interest Rate Adjustment Date therefor, the maximum amount by
which the related Mortgage Rate may increase (without regard to the Maximum
Rate) or decrease (without regard to the Minimum Rate) from the Mortgage Rate in
effect immediately prior to such Interest Rate Adjustment Date.
"REO Property": A Mortgaged Property acquired through foreclosure or
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deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.
"Whole Loan Transfer": Any sale or assignment of legal or beneficial
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ownership interest in one or more of the Mortgage Loans by the Purchaser or an
affiliate of the Purchaser to any person other than as part of a Pass-Through
Transfer.
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
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Purchaser agrees to purchase, Mortgage Loans from time to time. The Mortgage
Loans to be included in
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any Mortgage Loan Package shall be identified on the related Mortgage Loan
Schedule, as such schedule may be amended to reflect the Mortgage Loans accepted
by the Purchaser on the related Closing Date pursuant to the terms of Section 5
hereof. Each Mortgage Loan Schedule shall be delivered to the Seller by the
Purchaser not less than five (5) Business Days prior to the related Closing
Date. The Purchaser shall notify the Seller and Servicer (as defined in Section
14) as to whether the Purchaser shall purchase the balances under the Mortgage
Loans on an actual or scheduled basis. The Mortgage Loans to be included in any
Mortgage Loan Package shall have an aggregate outstanding principal balance as
of the close of business on the Cut-off Date of an amount specified in such
Confirmation Letter (plus or minus 5% of such amount), or such other amount
acceptable to the Purchaser as evidenced by the actual aggregate outstanding
principal balance of such Mortgage Loans accepted by the Purchaser on such
Closing Date. With respect to each Mortgage Loan that is purchased on a
scheduled principal balance basis, the principal balance of such Mortgage Loan
shall be determined after giving effect to any payments due on or before the
Cut-off Date, whether or not received, and all principal prepayments received on
or before the Cut-off Date (the "Scheduled Principal Balance"). With respect to
each Mortgage Loan that is purchased on an actual principal balance basis, the
principal balance of such Mortgage Loan shall be determined after giving effect
to all payments of principal actually received on or before the Cut-off Date
(the "Actual Principal Balance"). The sale of the Mortgage Loans to be included
in any Mortgage Loan Package shall take place on the Closing Date.
The purchase price for the Mortgage Loans included in any Mortgage
Loan Package shall be equal to the purchase price percentage specified in the
related Confirmation Letter multiplied by the aggregate outstanding Scheduled
Principal Balance or Actual Principal Balance, as the case may be, thereof as of
the close of business on the related Cut-off Date, together with interest
accrued on such principal balance from the related Cut-off Date (in the case of
any Mortgage Loan purchased on a scheduled basis) or the paid-through date of
the Mortgage Loan (in the case of a Mortgage Loan purchased on an actual basis)
to but not including the related Closing Date at the per annum rate specified in
such Confirmation Letter. The purchase price shall be paid to the Seller by
wire transfer in immediately available funds on the related Closing Date by or
on behalf of the Purchaser, or as otherwise agreed by the Purchaser (or an
affiliate thereof) and the Seller. In addition to the related purchase price,
as additional consideration for the sale of the Mortgage Loans in any Mortgage
Loan Package, DLJ Mortgage Capital, Inc. or an affiliated successor or assignee
thereof, (the "Initial Purchaser") shall deliver to the Seller on the closing
date of any related Pass-Through Transfer effected by the Initial Purchaser (i)
a 100% percentage interest in the most subordinate class of Certificates issued
in connection with such Pass-Through Transfer and (ii) a 99.99% percentage
interest in the residual class of such Certificates if such residual class
constitutes the most subordinate class, unless the Purchaser and the Seller
agree that such ownership interests shall not be delivered to the Seller.
With respect to each Mortgage Loan sold on a scheduled basis, the
Purchaser shall be entitled to all scheduled principal payments due after the
related Cut-off Date, all other payments of principal due and collected after
such Cut-off Date, and all payments of interest on such Mortgage Loan, minus
that portion of any such interest payment which is allocable to the
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period prior to such Cut-off Date. All scheduled payments of principal due on or
before such Cut-off Date and collected after such Cut-off Date shall belong to
the Purchaser (in the event actual balances are purchased) or the Seller (in the
event scheduled balances are purchased), subject to the terms of the Whole Loan
Financing Facility between the Seller and the Purchaser, dated as of March __,
1998 (the "Finance Facility"), together with the Pledge Agreement, Tri-Party
Custodial Agreement and Interim Servicing Agreement related thereto.
With respect to each Mortgage Loan sold on an actual basis, the
Purchaser shall be entitled to all principal payments received after the related
Cut-off Date and all payments of interest on such Mortgage Loan. All payments
of principal received on or before such Cut-off Date shall belong to the Seller.
The Purchaser shall have the right to transfer to any person all or a
portion of its right, title and interest in and to each Mortgage Loan on or
subsequent to the related Closing Date, and other rights and obligations under
this Agreement with respect to such Mortgage Loan (except, in the case of any
such transfer by the Initial Purchaser to an unaffiliated party, its rights
under Section 11 and its right to indemnification and notice) as part of one or
more Whole Loan Transfers or Pass-Through Transfers, as applicable, and the
transferee thereof shall succeed to such right, title and interest and rights
and obligations hereunder of the Purchaser with respect to such Mortgage Loan.
With respect to any Mortgage Loan or related interest that has been so
transferred, all references herein to the Purchaser shall be deemed to refer to
the related transferee.
SECTION 3. Conveyance of Mortgage Loans. With respect to the
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Mortgage Loans included in any Mortgage Loan Package, the Seller hereby agrees
to transfer, assign, set over and otherwise convey to the Purchaser, without
recourse but subject to the terms of this Agreement, on the related Closing
Date, all the right, title and interest of the Seller in and to the Mortgage
Loans identified on the related Mortgage Loan Schedule as of such Closing Date.
Each Mortgage Loan Schedule shall conform to the requirements of the Purchaser
as set forth in this Agreement. Each Mortgage Loan Schedule shall be amended on
the related Closing Date, if necessary, to reflect the Mortgage Loans accepted
by the Purchaser on such Closing Date in accordance with Section 5 hereof. In
connection with any such transfer and assignment, the Seller shall execute and
deliver to the Purchaser an Assignment and Conveyance, substantially in the form
of Exhibit 8 annexed hereto, with respect to the related Mortgage Loans and
shall deliver, or cause to be delivered, to the Custodian or its designee, the
documents or instruments specified below with respect to each such Mortgage Loan
(each a "Mortgage File"). On or before the Closing Date for any such transfer
and assignment, each of the related Mortgage Files shall have been delivered by
the Seller to the Custodian and shall be held by the Custodian pursuant to the
Tri-Party Custodial Agreement dated March __, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Custody Agreement"), among the
Purchaser, the Seller and the Custodian, until the Custody Agreement is
terminated as to the related Mortgage Loan.
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All Mortgage Files so delivered shall be held by the Custodian in
escrow at all times prior to the related Closing Dates for the benefit of the
Purchaser under the Custody Agreement. Each Mortgage File shall contain the
following documents:
(a) the original mortgage note, naming the Seller as the holder/payee
thereof (or, if the Seller is not the original holder/payee thereof,
bearing all endorsements necessary to evidence a complete and unbroken
chain of endorsements from the original holder/payee to the Seller) and
endorsed by the Seller "Pay to the order of __________, without recourse";
(b) the original mortgage, security deed, deed of trust or other
security instrument ("Mortgage"), naming the Seller as the "mortgagee" or
"beneficiary" thereof (or, if the Seller is not the original
mortgagee/beneficiary thereof, such Mortgage together with all assignments
necessary to evidence a complete and unbroken chain of intervening
assignments from the original mortgagee/beneficiary to the Seller) and
bearing evidence that such instrument has been recorded in the appropriate
jurisdiction where the Mortgaged Property is located (or, in lieu of the
original of the recorded Mortgage, a duplicate or conformed copy of the
Mortgage, together with a certificate of an officer of either (i) the
Seller or (ii) a representative of the escrow company, title insurer or
other closing agent certifying that such copy represents a true and correct
copy of the original and that such original has been submitted for
recordation in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located, or a certificate of
receipt from the recording office, certifying that such copy represents a
true and correct copy of the original and that such original has been
submitted for recordation in the appro priate governmental recording
office of the jurisdiction where the Mortgaged Property is located);
(c) an original assignment of the Mortgage executed at the direction
of the Purchaser by the Seller, without recourse, to either (i) "Bankers
Trust Company, as trustee," (ii) "Bankers Trust Company, as trustee for the
holders of DLJ Mortgage Acceptance Corp. Mortgage Pass-Through
Certificates," or (iii) in blank, with evidence of recording thereon
(except with respect to any assignments of Mortgage that are delivered in
blank) and the original of any intervening assignment or assignments of the
Mortgage, including any warehousing assignment, necessary to evidence a
complete and unbroken chain of assignments from the original
mortgagee/beneficiary to the Seller and bearing evidence that each such
instrument has been recorded in the appropriate jurisdiction where the
Mortgaged Property is located (or, in lieu of any such original recorded
assignment of Mortgage or any such original recorded intervening assignment
of Mortgage, a duplicate or conformed copy of such assignment of Mortgage,
together with a certificate of an officer of the Seller certifying that
such copy represents a true and correct copy of the original and that such
original has been submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is
located, or a certificate of receipt from the recording office, certifying
that such
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copy represents a true and correct copy of the original and that such
original has been submitted for recordation in the appropriate governmental
recording office of the juris diction where the Mortgaged Property is
located);
(d) the original lender's title insurance policy, or, if such policy
has not been issued and if the Mortgage Loan was funded through a title
insurance company or other comparable closing agent pursuant to closing
instructions precluding the title insurance company or other comparable
closing agent from funding until it is prepared to issue the required title
insurance coverage, a copy of such closing instructions;
(e) the original of any assumption, modification, extension or
guaranty agreement;
(f) the original or a copy of the preliminary title report (or
equivalent thereof) on the Mortgaged Property; and
(g) if the mortgage note, the Mortgage, any assignment of Mortgage or
any other related document has been signed by a person on behalf of the
mortgagor, the original power of attorney or other instrument that
authorized and empowered such person to sign, or a duplicate or conformed
copy of the power of attorney or other instrument, together with a
certification of an officer of the Seller or of the applicable title
insurance company, escrow company or other comparable closing agent
certifying that such copy represents a true and correct copy of the
original.
The Seller shall, promptly upon receipt thereof, deliver to the
Purchaser, or its designee, the original Mortgage or assignment, as the case may
be, with evidence of recording indicated thereon, in each instance where a copy
thereof certified by the Seller, escrow company, title insurer, other closing
agent or the appropriate governmental recording office was delivered to the
Purchaser or its designee. In the event the Seller cannot deliver any recorded
Mortgage or assignment of Mortgage to the Purchaser or its assignee for any
reason, the Seller shall deliver or cause to be delivered to the Purchaser or
its assignee a photocopy of such Mortgage or assignment, as the case may be,
certified by the appropriate county recorder's office to be a true and complete
copy of the original thereof. If a copy of the closing instructions has been
delivered by the Seller in lieu of a title insurance policy, the Seller shall
use its best reasonable efforts to deliver to the Purchaser, or its designee,
the related title insurance policy within 120 days of the Closing Date. In the
event that any document specified in paragraphs (a) through (e) and (g) above
for any Mortgage Loan is not delivered to the Purchaser within 120 days
following the related Closing Date, upon written request of the Purchaser the
Seller shall repurchase such Mortgage Loan at a price equal to the sum of (i)
100% of the outstanding principal balance thereof, (ii) unpaid accrued interest
thereon from the due date as to which interest was last paid by the Mortgagor to
the first day of the month following the month of repurchase at a rate equal to
the related Mortgage Rate, and (iii) all amounts advanced by the Servicer or any
other person on the Mortgage Loan and not reimbursed together with unpaid
Servicing Fees (as defined in the related Servicing Agreement).
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Notwithstanding the foregoing, (i) the obligation of the Seller to deliver any
document specified in (g) above shall be deemed to have been satisfied upon the
delivery to the Purchaser of a duplicate or conformed copy of the power of
attorney or other instrument that authorized and empowered any person to sign a
mortgage note, Mortgage, assignment of Mortgage or any other related document,
together with a certification of an officer of the Seller or of the applicable
title insurance company, escrow company or other comparable closing agent
certifying that such copy represents a true and correct copy of the original;
and (ii) in the event that any original recorded document required to be
delivered pursuant to paragraphs (b) or (c) above has not been delivered to the
Purchaser within 120 days following the Closing Date due to circumstances that
are not within the control of the Seller, the Seller shall deliver to the
Purchaser, prior to the expiration of such 120 day period, an officer's
certificate of the Seller which shall (A) identify the undelivered document, (B)
state that the recorded document has not been delivered to the Purchaser due
solely to circumstances that are not within the control of the Seller and
identify such circumstances, and (C) state the date the document was delivered
to the public recording office. In the event the Seller is unable to deliver
such recorded document or a photocopy of such document certified by the
appropriate county recorder's office to be a true and complete copy of the
original thereof within 365 days following the Closing Date, upon written
request of the Purchaser the Seller shall repurchase such Mortgage Loan at the
repurchase price specified above.
In the event that any assignment is lost or returned unrecorded
because of a defect therein, the Seller shall prepare a substitute assignment or
cure such defect and record such cured or substituted assignment, at the expense
of the Seller, in accordance with this Section 3. The Seller shall also pay the
fees of the Custodian (or its designee) incurred in connection with the removal
and replacement of any assignment of Mortgage delivered for recording, as well
as the fees of the Custodian (or its designee) incurred in connection with the
addition of any title insurance policy or recorded Mortgage to the related
Mortgage File.
With respect to any Whole Loan Transfer by the Initial Purchaser, the
Seller shall, promptly upon the request of the Initial Purchaser, deliver to the
Custodian or its designee original assignments of the Mortgages for the related
Mortgage Loans, without recourse and in blank, to be executed by either "Bankers
Trust Company, as trustee," or "Bankers Trust Company, as trustee for the
holders of DLJ Mortgage Acceptance Corp. Mortgage Pass-Through Certificates," as
applicable, in recordable form and sufficient under the laws of the
jurisdictions wherein the related Mortgaged Properties are located to reflect of
record the sale of such Mortgages upon the completion of such assignments. The
Seller shall use its best efforts to cause the Custodian or its designee to
execute such assignments as provided in the preceding sentence and to deliver
them in accordance with the Initial Purchaser's instructions. The Seller shall
not be liable for the Custodian's or its designee's failure to timely execute
and deliver any assignment as provided in this paragraph.
Subsequent to a Whole Loan Transfer or Pass-Through Transfer by the
Initial Purchaser, the Seller shall deliver to the Purchaser or its designee all
original documents relating to the Mortgage Loans that have not previously been
delivered to the Purchaser, an affiliate
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thereof or the Custodian in trust for the benefit of the Purchaser or any
assignee, transferee or designee of the Purchaser, other than original documents
required to be held by the Seller pursuant to applicable mortgage lending laws
and rules and regulations of the jurisdiction in which the related Mortgaged
Property is located (in lieu of which the Seller shall deliver photocopies), and
any person's possession of any such documents on behalf of the Purchaser shall
be at the will of the Purchaser and any documents held by the Servicer shall be
for the sole purpose of servicing the related Mortgage Loan and such possession
by such person shall be in a custodial capacity only. Upon sale of any Mortgage
Loan by the Seller to the Purchaser hereunder, the ownership of the related
Mortgage Note, the related Mortgage and the contents of the related Mortgage
File shall be vested in the Purchaser and the ownership of all records and
documents with respect to such Mortgage Loan prepared by or that 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
such custodial capacity only. The Seller's records shall accurately reflect the
sale of each Mortgage Loan to the Purchaser. In the event that any original
document held by the Seller is required pursuant to the terms of this Section 3
to be a part of a Mortgage File, such document shall be delivered promptly to
the Purchaser or its designee.
SECTION 4. Late Payment Charges and Prepayment Charges; Seller's
-----------------------------------------------------
Repurchase Right. Any late payment charges or prepayment charges collected in
----------------
connection with any Mortgage Loan shall be retained by or paid to the Seller
during any period that the Initial Purchaser is the owner of such Mortgage Loan.
The Seller's right to late payment and prepayment charges on any Mortgage Loan
shall terminate in the event of a Whole Loan Transfer thereof on a servicing
released basis without payment of any additional consideration to the Seller.
The Initial Purchaser shall have the right to purchase the Seller's right to the
late payment and prepayment charges on the Mortgage Loans at a price mutually
agreed upon by the Initial Purchaser and the Seller, and the payment for such
right shall be included in the purchase price and paid on the related Closing
Date. In addition, during the period the Initial Purchaser is the owner of any
Mortgage Loan, the Seller shall have the option to purchase any related REO
Property acquired or to be acquired for an amount equal to the unpaid principal
balance of the related Mortgage Loan immediately prior to its conversion to an
REO Property together with all accrued and unpaid interest thereon through the
first day of the month following the month of repurchase and all unreimbursed
expenses or advances in connection therewith, in each case as promptly as
possible but in any event within thirty days following the later of (a) the date
on which such Mortgage Loan becomes an REO Property and (b) the date on which
the Servicer notifies the Seller that such Mortgage Loan has become an REO
Property; provided that if the Seller does not purchase any two Mortgage Loans
that become REO Properties as permitted above, the Seller shall thereafter have
no right or option to purchase any additional REO Property as provided in this
paragraph.
Except to the extent otherwise agreed upon by the Seller, the
agreement or agreements pursuant to which any Mortgage Loan is transferred as
part of a Pass-Through Transfer by the Initial Purchaser shall provide that (i)
any late payment charges or prepayment charges collected in connection with such
Mortgage Loan shall be paid to the Seller and (ii) the
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Seller shall have the option to purchase any related REO Property acquired or to
be acquired as provided in the preceding paragraph subject to the limitation
that if the Seller does not purchase any two Mortgage Loans which are subject to
such Pass-Through Transfer and that become REO Properties as permitted above,
the Seller shall thereafter have no right or option to purchase any additional
REO Property or Mortgage Loan that becomes an REO Property sold in connection
with such Pass-Through Transfer.
SECTION 5. Examination of Mortgage Files and Due Diligence Review.
------------------------------------------------------
On or before the Closing Date related to each Mortgage Loan Package, the Seller
shall (a) deliver or cause to be delivered to the Purchaser magnetic tapes
acceptable to the Purchaser which contain such information about the Mortgage
Loans in such Mortgage Loan Package as may be reasonably requested by the
Purchaser, and (b) as directed by the Purchaser, either, deliver to the
Purchaser or its designee, in escrow, or make available, or cause to be made
available, for examination during normal business hours, all credit files,
underwriting documentation and Mortgage Files relating to such Mortgage Loans.
The Purchaser may reject any Non-Program Loan (as that term is defined in the
Commitment Letter between the Purchaser and the Seller dated March __, 1998)
offered for sale hereunder in its sole discretion. The fact that the Purchaser
has conducted or has failed to conduct any partial or complete examination of
the credit file, underwriting documentation or Mortgage File relating to any
Mortgage Loan shall not affect the Purchaser's right to demand repurchase of
such Mortgage Loan or other relief as provided under this Agreement.
In addition to the foregoing examination of the Mortgage Files and
related documents, the Seller agrees to allow the Initial Purchaser, or its
designee, or any representative of any nationally recognized statistical rating
agency rating the Certificates issued as part of any Pass-Through Transfer by
the Initial Purchaser (a "Rating Agency"), to examine and audit all books,
records and files pertaining to the Mortgage Loans, the Seller's underwriting
procedures and the Seller's ability to perform or observe all of the terms,
covenants and conditions of this Agreement. Such examinations and audits shall
take place at one or more offices of the Seller during normal business hours and
in the course of such examinations and audits, the Seller shall make available
to the Initial Purchaser, or its designee, adequate facilities, as well as the
assistance of a sufficient number of knowledgeable and responsible individuals
who are familiar with the Mortgage Loans and the terms of this Agreement, and
the Seller shall cooperate fully with any such review in all respects. The
Seller agrees to provide the Initial Purchaser, its designee and any
representative of a Rating Agency with all material information regarding the
Seller (including its financial condition), and to provide access to
knowledgeable financial or accounting officers for the purpose of answering
questions with respect to the Seller's financial condition, financial statements
or other developments affecting the Seller. The Initial Purchaser shall, upon
reasonable prior notice, also have the right to perform such examinations and
audits or to obtain such material information regarding the Seller's financial
condition and access to the officers described above following any Closing Date.
-14-
The Seller understands and agrees that any information, including but
not limited to financial information, regarding the status of the Seller with
respect to any regulatory body or entity and information as to the loss and
delinquency experience of loans originated or acquired by the Seller, obtained
in the examination and review described in the foregoing paragraph may be
disclosed in an Offering Circular (as defined herein); provided, however, that
neither the Initial Purchaser nor any affiliate thereof assumes any
responsibility with respect to such information.
SECTION 6. Representations, Warranties and Covenants of the Seller. In
-------------------------------------------------------
order to induce the Purchaser to enter into this Agreement, the Seller hereby
represents, warrants and covenants to the Purchaser that as of the date hereof
and as of each Closing Date (or such other date specifically provided herein):
(i) The Seller is a corporation, duly organized, validly existing
and in good standing under the laws of the State of California with full power
and authority to carry on its business as presently conducted by it. The Seller
had the full power and authority and legal right to originate or acquire the
Mortgage Loans sold on such Closing Date. The Seller has the full power and
authority and legal right to own the Mortgage Loans sold on such Closing Date
and to transfer and convey such Mortgage Loans to the Purchaser and has the full
power and authority and legal right to execute and deliver, engage in the
transactions contemplated by, and perform and observe the terms and conditions
of, this Agreement, each Servicing Agreement and the Custody Agreement.
(ii) This Agreement, each Servicing Agreement and the Custody
Agreement have been duly and validly authorized, executed and delivered by the
Seller, all requisite corporate action has been or will have been taken, and
(assuming the due authorization, execution and delivery hereof and thereof by
the other parties hereto and thereto) each constitutes or will constitute the
valid, legal and binding agreement of the Seller, enforceable in accordance with
its terms, except as such enforcement may be limited by (i) laws relating to
bankruptcy, insolvency, reorganization, receivership or moratorium, (ii) other
laws relating to or affecting the rights of creditors generally and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law) or (iii) public policy considerations underlying
the securities laws, to the extent that such public policy considerations limit
the enforceability of the provisions of this Agreement which purport to provide
indemnification from liabilities under applicable securities laws.
(iii) Either (a) no consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or court
is required, under federal or state laws, for the execution, delivery and
performance of or compliance by the Seller with this Agree ment, each Servicing
Agreement or the Custody Agreement, or the consummation by the Seller of any
other transaction contemplated hereby or (b) such consent, approval,
authorization or order has been obtained, or such registration, filing or notice
has been made.
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(iv) Neither the transfer of the Mortgage Loans sold on such Closing
Date to the Purchaser, nor the execution, delivery or performance of this
Agreement, each Servicing Agreement or the Custody Agreement by the Seller,
conflicts or will conflict with, or results or will result in a breach of, or
constitutes or will constitute a default under (a) any term or provision of the
documents governing the Seller's organization, or (b) any term or provision of
any material agreement, contract, instrument or indenture, to which the Seller
is a party or is bound, or (c) any law, rule, regulation, order, judgment, writ,
injunction or decree of any court or governmental authority having jurisdiction
over the Seller, or results or will result in the creation or imposition of any
lien, charge or encumbrance which, in any of the foregoing cases, would have a
material adverse effect upon such Mortgage Loans or any documents or instruments
evidencing or securing such Mortgage Loans.
(v) The Seller has delivered to the Initial Purchaser audited
consolidated financial statements as to its last complete fiscal year (if
applicable) and its unaudited financial statements as of any later quarter ended
more than ninety (90) days prior to the date hereof or such Closing Date, as
applicable. All such financial statements fairly present the pertinent results
of operations and changes in financial position for each of such periods and the
financial position at the end of each such period of the Seller, and have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto.
(vi) Except as have been previously disclosed in writing by the
Seller, there are no actions or proceedings against, or investigations of, the
Seller pending or, to the Seller's knowledge, threatened against the Seller
before any court, administrative agency or other tribunal, which would
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of Certificates as part of any Pass-Through Transfer by the Initial
Purchaser, the execution, delivery or enforceability of this Agreement, the
Servicing Agreement or the Custody Agreement, or have a material adverse effect
on the financial condition of the Seller.
(vii) The information set forth on the Mortgage Loan Schedule related
to each Mortgage Loan sold on such Closing Date is true and correct in all
material respects.
(viii) The Seller represents and warrants that each of the
representations and warranties contained in Exhibit 6 annexed hereto and in the
Assignment and Conveyance related to each Mortgage Loan sold, on such Closing
Date is true and correct and the Seller shall restate such representations on
the closing date of any related Whole Loan Transfer or Pass-Through Transfer by
the Initial Purchaser in accordance with Section 11 hereof.
(ix) The Seller covenants to (a) provide in a timely manner all of
the information regarding itself and the Mortgage Loans sold on such Closing
Date as the Initial Purchaser may reasonably request in connection with the
preparation of any related Offering Circular, (b) fully cooperate with, and
supply all information requested by a Rating Agency to the
-16-
extent practicable, and (c) dedicate adequate personnel and resources as may be
required to comply with all of the terms and conditions of this Agreement.
(x) The Seller covenants with the Initial Purchaser that as of the
date of any Offering Circular and as of the closing date for the related Whole
Loan Transfer or Pass-Through Transfer, the information contained in such
Offering Circular with respect to the Seller's Information (as defined in
Section 12(a)) shall be true and accurate and shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading.
(xi) Other than in connection with solicitations or promotions
directed at the general public, the Seller agrees that it shall not solicit the
Mortgagor with respect to any Mortgage Loan for the purpose of refinancing such
Mortgage Loan after the execution of the Confirmation Letter with respect to the
Mortgage Loan.
(xii) The Seller is, and at all times during the term of this
Agreement shall remain a mortgagee approved by the Secretary of Department of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act, as amended.
XXXXXXX 0. Xxxx, Xxxxxxxxxx and Indemnity Obligations of the Seller.
--------------------------------------------------------
Each of the representations, warranties and covenants contained in or required
to be made pursuant to Section 6 or Section 11 of this Agreement shall survive
the sale of the related Mortgage Loans and shall continue in full force and
effect, notwithstanding any restrictive or qualified endorsement on the related
Mortgage Notes and notwithstanding subsequent termination of this Agreement.
The representations, warranties and covenants contained in or required to be
made pursuant to Section 6 or Section 11 of this Agreement shall not be impaired
by any review or examination of the Mortgage Files or other documents evidencing
or relating to the related Mortgage Loans or any failure on the part of the
Purchaser to review or examine such documents and shall inure to the benefit of
any transferee of such Mortgage Loans from the Purchaser or any affiliate
thereof, including, without limitation, any transferee related to a Whole Loan
Transfer or Pass-Through Transfer.
Upon discovery of any defective document in a Mortgage File relating
to a Mortgage Loan which materially and adversely affects the interests of the
Purchaser, any affiliate thereof, any holder of the Mortgage Loan or any holders
of Certificates representing an interest in the Mortgage Loan, the Purchaser or
its assignee shall notify the Seller of such defect and request that the Seller
cure such defect within 60 days from the date the Seller was notified of such
defect. The Seller hereby covenants and agrees that if any such defect cannot
be corrected or cured within such 60-day period, the Seller shall, not later
than 90 days after its receipt of notice of such defect, repurchase the related
Mortgage Loan at a price equal to the sum of (i) 100% of the outstanding
principal balance thereof, (ii) unpaid accrued interest thereon from the due
date as to which interest was last paid by the Mortgagor to the first day of the
month following the
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month of repurchase at a rate equal to the related Mortgage Rate, (iii) all
amounts advanced by the Servicer or any other person on the Mortgage Loan and
not reimbursed together with unpaid Servicing Fees (as defined in the related
Servicing Agreement) and (iv) all expenses reasonably incurred or to be incurred
by or on behalf of the Purchaser in respect of the breach or defect giving rise
to the repurchase obligation, including any expenses arising out of the
enforcement of the repurchase obligation (the sum of the amounts in clauses (i)
through (iv), the "Repurchase Price").
Within 90 days of the earlier of discovery by the Seller or receipt of
notice by the Seller of a breach of any of the representations, warranties or
covenants of the Seller set forth in or required to be made pursuant to Section
6 or Section 11 of this Agreement which materially and adversely affects the
interests of the Purchaser, any affiliate thereof, any holder of the Mortgage
Loan or the holders of the Certificates representing an interest in the Mortgage
Loan, or to the extent that the Seller cannot restate as of the closing date of
any related Whole Loan Transfer or Pass-Through Transfer by the Initial
Purchaser any of the representations or warranties for any Mortgage Loan as set
forth in Section 6 hereof or required by Section 11 hereof, the Seller shall
either (i) cure such breach in all material respects or (ii) repurchase the
related Mortgage Loan from the Purchaser at the Repurchase Price.
In addition to such cure and repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Seller's representations and warranties contained in Section 6 or Section 11
hereof.
It is understood and agreed that solely with respect to a defective
document or a breach of the Seller's representations and warranties with respect
to a Mortgage Loan which materially and adversely affects the interests of the
Purchaser, any affiliate thereof, any holder of the Mortgage Loan or the holders
of the Certificates representing an interest in the Mortgage Loan, the
obligations of the Seller set forth in this Section 7 to cure or repurchase a
defective Mortgage Loan and to indemnify the Initial Purchaser as provided in
this Section 7 and in Section 12 hereof constitute the sole remedies of the
Purchaser or its assignee; provided that this limitation shall not in any way
limit the Purchaser's rights or remedies upon breach of any other representation
or warranty herein.
The Repurchase Price for any repurchased Mortgage Loan shall be
payable to the Purchaser or its assignee by wire transfer of immediately
available funds to the account designated by the Purchaser, and the Purchaser or
its assignee, upon receipt of such funds, shall release or cause to be released
to the Seller the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as shall
be necessary to vest in the Seller title to any Mortgage Loan released pursuant
hereto.
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SECTION 8. Representations and Warranties of the Purchaser. In order
-----------------------------------------------
to induce the Seller to enter into this Agreement, the Purchaser hereby
represents and warrants to the Seller that as of the date hereof and as of each
Closing Date:
(i) The Purchaser is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware with full power and
authority to carry on its business as presently conducted by it. The Purchaser
has the full power and authority and legal right to execute and deliver, engage
in the transactions contemplated by, and perform and observe the terms and
conditions of, this Agreement.
(ii) This Agreement has been duly and validly authorized, executed
and delivered by the Purchaser, all requisite corporate action has been or will
have been taken, and (assuming the due authorization, execution and delivery
hereof by the other parties hereto) consti tutes or will constitute a valid,
legal and binding agreement of the Purchaser, enforceable in accordance with its
terms, except as such enforcement may be limited by (i) laws relating to
bankruptcy, insolvency, reorganization, receivership or moratorium, (ii) other
laws relating to or affecting the rights of creditors generally and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law) or (iii) public policy consider ations
underlying the securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this Agreement
which purport to provide indemnification from liabilities under applicable
securities laws.
(iii) Either (a) no consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority or court
is required, under federal or state laws, for the execution, delivery and
performance of or compliance by the Purchaser with this Agreement, or the
consummation by the Purchaser of any other transaction contemplated hereby or
(b) such consent, approval, authorization or order has been obtained, or such
registration, filing or notice has been made.
(iv) The execution, delivery or performance of this Agreement by the
Purchaser does not conflict or will not conflict with, or does not result or
will not result in a breach of, or does not constitute or will not constitute a
default under (a) any term or provision of the documents governing the
Purchaser's organization, or (b) any term or provision of any material
agreement, contract, instrument or indenture, to which the Purchaser is a party
or is bound, or (c) any law, rule, regulation, order, judgment, writ, injunction
or decree of any court or governmental authority having jurisdiction over the
Purchaser.
(v) There are no actions or proceedings against, or investigations
of, the Purchaser pending or, to the Purchaser's knowledge, threatened against
the Purchaser before any court, administrative agency or other tribunal, which
would reasonably be expected to adversely affect the transfer of the Mortgage
Loans sold on such Closing Date, the execution, delivery or enforceability of
this Agreement or have a material adverse effect on the financial condition of
the Purchaser.
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SECTION 9. Closing. The closing of the sale of the Mortgage Loans to
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be purchased on each Closing Date shall be held at the offices of Xxxxxxx
Xxxxxxxx & Xxxx, located at Two World Trade Center, New York, New York, at 10:00
A.M., New York time (or such other place and time as the Purchaser and the
Seller shall agree), on such Closing Date, and such closing shall be subject to
each of the following conditions:
(a) All of the representations and warranties of the Seller and the
Purchaser shall be true and correct in all material respects as of such
Closing Date;
(b) All Closing Documents specified in Section 10 of this Agreement,
in such forms as are agreed upon and acceptable to the Purchaser and the
Seller, shall be duly executed and delivered by all signatories as required
pursuant to the respective terms thereof;
(c) The Seller shall have delivered and released to the Purchaser or
its designee all documents required to be delivered pursuant to Section 3
of this Agreement;
(d) The result of the examination and audit performed by the Purchaser
pursuant to Section 5 hereof shall be satisfactory to the Purchaser in its
sole determination;
(e) All other terms and conditions of this Agreement required to be
complied with on or before such Closing Date shall have been complied with
and the Seller and the Purchaser shall have the ability to comply with all
terms and conditions and perform all duties and obligations required to be
complied with or performed after such Closing Date; and
(f) The Purchaser shall have received from the Custodian a Trust
Receipt (as defined in the Custody Agreement) for the Mortgage File related
to each Mortgage Loan to be sold on such Closing Date.
SECTION 10 Closing Documents. The "Closing Documents" for the
-----------------
Mortgage Loans to be sold on any Closing Date shall consist of the following:
(a) If such Closing Date is the initial Closing Date, this Agreement
duly executed by the Purchaser and the Seller;
(b) With respect to each Mortgage Loan Package sold on such Closing
Date, an Assignment and Conveyance from the Seller to the Purchaser or its
designee, substantially in the form of Exhibit 8 annexed hereto, dated such
Closing Date, with a copy of the related Mortgage Loan Schedule attached
thereto;
(c) An Officers' Certificate of the Seller in the form of Exhibit 2
annexed hereto, dated such Closing Date, and attached thereto resolutions
of the board of directors
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of the Seller, in a form substantially similar to Exhibit 3 annexed hereto,
together with copies of the documents governing the Seller's organization
and a certificate of good standing of the Seller;
(d) On the initial Closing Date and on each subsequent Closing Date on
which the Purchaser requests such opinion due to the Purchaser's reasonable
determination that the Seller's condition may have changed prior to the
initial Closing Date, a written opinion of counsel for the Seller
reasonably satisfactory to the Purchaser, substantially in the form of
Exhibit 4 annexed hereto, dated such Closing Date;
(e) With respect to each Mortgage Loan Package sold on such Closing
Date, a cross-receipt dated such Closing Date, substantially in the form of
Exhibit 7 annexed hereto, duly executed by the Seller and the Purchaser;
and
(f) Such other documents as the Purchaser may reasonably request.
SECTION 11. Information to be Provided by the Seller. As an
----------------------------------------
inducement to the Purchaser to purchase the Mortgage Loans to be included in any
Mortgage Loan Package, the Seller agrees to cooperate and use its best efforts
to (i) take such actions as are reasonably required by the Initial Purchaser in
connection with each Whole Loan Transfer and Pass-Through Transfer by the
Initial Purchaser and (ii) assist in the preparation by the Initial Purchaser of
any related prospectus, private placement memorandum or other document
containing information with respect to the Seller or one or more of such
Mortgage Loans (each such document, an "Offering Circular"), including any
document used in connection with the sale of a Mortgage Loan as part of any
Whole Loan Transfer by the Initial Purchaser and any document pursuant to which
the Certificates that are issued as part of any Pass-Through Transfer by the
Initial Purchaser will be offered to investors.
The Seller agrees to provide the Initial Purchaser with any and all
information and appropriate verification of information, whether through letters
of its auditors and counsel or otherwise, and shall provide to the Initial
Purchaser such additional representations, warranties, covenants, opinions of
counsel, including, without limitation, true sale and perfection opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as may reasonably be believed to be necessary by the Initial
Purchaser and reasonably acceptable to the Initial Purchaser in order to effect
(i) the issuance of the Certificates related to any Pass-Through Transfer by the
Initial Purchaser, the class of senior Certificates of which shall bear a rating
no lower than in the highest rating category of one or more nationally
recognized statistical rating agencies, or (ii) any Whole Loan Transfer by the
Initial Purchaser. Without limiting the generality of the Seller's agreements
in the foregoing sentence, such additional representations and warranties shall
be made as of the "cut-off date", as such term is defined in the agreement or
agreements pursuant to which the Mortgage Loans related to any Whole Loan
Transfer or Pass-Through Transfer by the Initial Purchaser are transferred,
except for those representations and warranties which shall be made as of the
closing date relating to any Whole Loan Transfer or Pass-Through
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Transfer by the Initial Purchaser or as of any other date between such "cut-off
date" and such closing date, and shall include for each such Mortgage Loan a
restatement of all representations and warranties made in Section 6 of this
Agreement as of the related "cut-off date" or closing date of the Whole Loan
Transfer or Pass-Through Transfer or any date between such dates, as applicable,
and the Initial Purchaser shall have the right to direct the Seller to make
statistical pool representations and warranties with respect to the information
listed on the Mortgage Loan Schedule, except that the representations and
warranties with respect to mortgage pool statistics (including those on the
Mortgage Loan Schedule) may be modified to accurately reflect the actual
mortgage pool statistics of such Mortgage Loans as of such "cut-off date",
closing date or intervening date to the extent such mortgage pool statistics
change as a result of payments or defaults on such Mortgage Loans or a
repurchase of any such Mortgage Loan by the Seller. As to each Whole Loan
Transfer by the Initial Purchaser, the information to be supplied shall be that
which is customary for similar transactions, and as to each Pass-Through
Transfer by the Initial Purchaser, the information to be supplied shall be that
which is customary for public or private, rated transactions for the issuance of
mortgage pass-through certificates and that which is substantially similar to
information previously provided by the Seller with respect to other issuances of
mortgage pass-through certificates. The Purchaser and Seller acknowledge that
the assignment related to any Whole Loan Transfer by the Initial Purchaser may,
and the issue and sale of the Certificates related to any Pass-Through Transfer
by the Initial Purchaser will, require the disclosure of the Seller's
underwriting criteria, loss and delinquency experience and the characteristics
of the related Mortgage Loans as all or a portion of a pool of such Mortgage
Loans by the Seller as part of one or more Offering Circulars or similar
disclosure documents.
The Purchaser and the Seller each agree to execute and deliver to the
other such additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Agreement and in connection
with any Whole Loan Transfer or Pass-Through Transfer by the Initial Purchaser.
SECTION 12. Indemnification. (a) The Seller agrees to indemnify and
---------------
hold harmless the Initial Purchaser, DLJ Mortgage Acceptance Corp. (the
"Depositor") and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation ("DLJSC"),
their respective officers and directors, and each person, if any, who controls
the Initial Purchaser, the Depositor or DLJSC within the meaning of either
Section 15 of the Securities Act of 1933, as amended (the "1933 Act"), or
Section 20 of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the 1933 Act, the 1934 Act or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based in whole or in part upon any untrue statement
or alleged untrue statement of a material fact contained in any Offering
Circular, or any omission or alleged omission to state in any Offering Circular
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, or any such untrue statement or omission or alleged untrue statement
or alleged omission made in any amendment of or supplement to any Offering
Circular, or elsewhere
-22-
in reliance upon any information furnished to the Initial Purchaser by the
Seller or approved by the Seller, or upon a defective document or a breach or
alleged breach of the representations, warranties, covenants or agreements of
the Seller as set forth in this Agreement, in any exhibit hereto or in any
Assignment and Conveyance or as set forth in any documents, instruments or
agreements of the Seller required to be delivered in connection with any Whole
Loan Transfer or Pass-Through Transfer by the Initial Purchaser as described in
Section 11 of this Agreement (collectively, the "Seller's Information"), it
being acknowledged that all statements set forth in any Offering Circular under
the captions "Description of the Mortgage Pool" and "The Seller" or elsewhere in
such Offering Circular with respect to the subjects discussed under such
captions will be made in reliance upon information furnished or approved by the
Seller and it being further acknowledged that the "Seller's Information" shall
not include the information set forth in any Offering Circular under the
captions "The Seller--Loan Delinquency, Forbearance, Foreclosure, Bankruptcy and
REO Property Status" and "REO Property Liquidation Experience" (or, if any such
captions do not appear in an Offering Circular, under captions containing
information of like character to information contained under similar captions in
other offering circulars relating to mortgage loans originated or acquired by
the Seller) or elsewhere in such Offering Circular with respect to the subjects
discussed under such captions. Coincident with the printing of any Offering
Circular, the Seller shall deliver to the Initial Purchaser or an affiliate
thereof a letter signed by an authorized officer of the Seller stating that the
Seller has approved such Seller's Information. The Seller acknowledges that the
Initial Purchaser, the Depositor and DLJSC will enter into one or more mortgage
loan purchase agreements, underwriting agreements or placement agreements in
reliance upon this indemnity agreement of the Seller. This indemnity agreement
shall be in addition to any liability which the Seller may otherwise have.
(b) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 12(a) above, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the reasonable fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or
(ii) the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties. The
indemnifying party may, at its option, at any time upon written notice to the
indemnified party, assume the defense of any proceeding and may designate
counsel satisfactory to the indemnified party in connection therewith provided
that the counsel so designated would have no
-23-
actual or potential conflict of interest in connection with such representation.
Unless it shall assume the defense of any proceeding, the indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If the indemnifying party assumes the defense of any
proceeding, it shall be entitled to settle such proceeding with the consent of
the indemnified party or, if such settlement provides for release of the
indemnified party in connection with all matters relating to the proceeding
which have been asserted against the indemnified party in such proceeding by the
other parties to such settlement, without the consent of the indemnified party.
(c) If the indemnification provided for in this Section 12 is
unavailable to an indemnified party under Section 12(a) hereof or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities, in such proportion as is
appropriate to reflect the relative fault of the indemnified and indemnifying
parties in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified and indemnifying parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by such parties.
(d) The Purchaser and the Seller agree that it would not be just and
equitable if contribution pursuant to Section 12(c) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the considerations referred to in Section 12(c) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in this Section 12 shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim, except where the indemnified party is required to bear
such expenses pursuant to this Section 12, which expenses the indemnifying party
shall pay as and when incurred, at the request of the indemnified party, to the
extent that the indemnifying party will be ultimately obligated to pay such
expenses. In the event that any expenses so paid by the indemnifying party are
subsequently determined to not be required to be borne by the indemnifying party
hereunder, the party which received such payment shall promptly refund the
amount so paid to the party which made such payment. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in this
Section 12 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by the Initial
Purchaser, the Depositor or DLJSC or any
-24-
person controlling the Initial Purchaser, the Depositor or DLJSC or by or on
behalf of the Seller and their respective directors or officers or any person
controlling the Seller, and (iii) acceptance of and payment for any of the
Mortgage Loans or the Certificates as part of or in connection with any Whole
Loan Transfer or Pass-Through Transfer by the Initial Purchaser.
SECTION 13. Costs. The Seller shall pay directly all of its own
-----
expenses, including out-of-pocket expenses, the expenses of the preparation and
recording of assignments of Mortgage pursuant to Section 3 hereof and the
delivery of documents required pursuant to Section 3 hereof to the Custodian or
its designee, fees for title policy endorsements and continuations, and its
attorney fees.
SECTION 14. Servicing. Each of the Mortgage Loans included in any
---------
Mortgage Loan Package shall be serviced by a servicer acceptable to the
Purchaser (the "Servicer") pursuant to a Servicing Agreement identified in the
related Assignment and Conveyance, the "Servicing Agreement"), among the related
Servicer, the Purchaser, the Seller and the Custodian thereunder, if applicable,
until the Servicing Agreement is terminated as to such Mortgage Loan. The
Seller hereby represents to the Purchaser as of each Closing Date that the
Mortgage Loans sold on such Closing Date are serviced by the related Servicer
pursuant to the related Servicing Agreement and are not subject to servicing
agreements with third parties, and it is understood and agreed between the
Seller and the Purchaser that such Mortgage Loans are to be delivered free and
clear of any servicing agreements with third party servicers.
SECTION 15. Notices. All demands, notices and communications
-------
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or mailed by registered mail, postage prepaid, return
receipt requested, to the following addresses: if to the Purchaser, addressed to
the Purchaser at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
Xxxxxxxx, or to such other address as the Purchaser may designate in writing to
the Seller; or if to the Seller, addressed to the Seller at 0000 XxXxx Xxxxxx,
Xxxxxx, Xxxxxxxxxx, 00000-0000, Attention: President, or to such other addresses
as the Seller may designate in writing to the Purchaser.
SECTION 16. Severability of Provisions. Any part, provision,
--------------------------
representation, warranty or covenant of this Agreement that is prohibited or
that 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 that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unen forceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
-25-
SECTION 17. Survival; Third Party Beneficiary. The Seller and the
---------------------------------
Purchaser agree that the representations, warranties and agreements made herein
and in any certificate or other instrument delivered pursuant hereto shall be
deemed to be relied upon by the other party, notwithstanding any investigation
heretofore or hereafter made by such party or on such party's behalf, and that
the representations, warranties and agreements made by the Seller and the
Purchaser herein or in any such certificate or other instrument shall survive
the delivery of and payment for the Mortgage Loans. The parties hereto agree
that the Depositor and DLJSC are intended third party beneficiaries of Section
12 hereof, and that the Depositor and DLJSC may enforce such provision to the
same extent as if the Depositor and DLJSC were parties to this Agreement.
SECTION 18. Governing Law. This Agreement is to be governed by, and
-------------
construed in accordance with, the laws of the State of California.
SECTION 19. Successors and Assigns. The rights and obligations of
----------------------
the Seller under this Agreement shall not be assigned by the Seller without the
prior written consent of the Purchaser. The Purchaser has the right to assign
its interest under this Agreement (except, in the case of any such transfer by
the Initial Purchaser to an unaffiliated party, its rights under Section 11 and
its rights to indemnification and notice) with respect to any Mortgage Loan, in
whole or in part, to any person as may be required to effect any Whole Loan
Transfer or Pass-Through Transfer, by written notice to the Seller, without the
consent of Seller, and the related assignee shall thereupon succeed to the
rights and obligations hereunder of the Purchaser. Subject to the foregoing,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. This Agreement supersedes
all prior agreements and understandings relating to the subject matter hereof.
SECTION 20. Waivers. Neither this Agreement nor any term hereof may
-------
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
SECTION 21. Headings. The headings in this Agreement are for
--------
purposes of reference only and shall not limit or otherwise affect the meaning
hereof.
SECTION 22. Intention of the Parties. It is the express intent of
------------------------
the parties hereto that the conveyance of the Mortgage Loans sold by the Seller
to the Purchaser as provided in Section 3 hereof be, and be construed as, a sale
of such Mortgage Loans by the Seller to the Purchaser and not as a pledge of
such Mortgage Loans by the Seller to the Purchaser to secure a debt or other
obligation of the Seller. However, in the event that, notwithstanding the
aforementioned intent of the parties, any such Mortgage Loans are held to be
property of the Seller, then (a) it is the express intent of the parties that
such conveyance be deemed a pledge of such Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller and (b) (1) this
Agreement shall also be deemed to be a security agreement within the
-26-
meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (2) the
conveyance provided for in Section 3 of this Agreement shall be deemed to be a
grant by the Seller to the Purchaser of a security interest in or lien on all of
the Seller's right, title and interest in and to such Mortgage Loans and all
amounts payable to the holders of such Mortgage Loans in accordance with the
terms thereof and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of mortgage notes, the related
mortgages and such other items of property as constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 of the applicable Uniform Commercial Code; and (4) notifications
to persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgment, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest or lien under applicable law. Any assignment of the
interest of the Purchaser pursuant to Section 2 hereof shall also be deemed to
be an assignment of any security interest created hereby. The Seller and the
Purchaser shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed to create a
security interest in or lien on any of the Mortgage Loans sold to the Purchaser,
such security interest or lien would be deemed to be a perfected security
interest or lien of first priority under applicable law and will be maintained
as such throughout the term of the Agreement.
SECTION 23. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall constitute an original but all of
which, when taken together, shall constitute but one legal instrument. It shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
SECTION 24. Further Assurances. The Seller and the Purchaser each
------------------
agree to execute and deliver such instruments and take such actions as the other
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed by their respective officers thereunto duly authorized as of
the date first above written.
DLJ MORTGAGE CAPITAL, INC.
By: ____________________________________
Name:
Title:
BNC MORTGAGE, INC.
By: ____________________________________
Name:
Title:
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
EXHIBIT 2
OFFICERS' CERTIFICATE
I, __________________, hereby certify that I am a duly elected
________________ of BNC Mortgage, Inc. (the "Seller"), a corporation organized
under the laws of the State of ___________, that I have made such reasonable
investigation as I have deemed necessary to deliver this Officers' Certificate,
including discussions with responsible officers of the Seller and further
certify to the best of my knowledge as follows:
1. Attached hereto is a true and correct copy of the Articles of
Incorporation and By-laws of the Seller, all of which are in full force and
effect on the date hereof. Attached hereto is a Certificate of Good
Standing, dated _______________________, 199___. No event has occurred
since _________________, 199___ which has affected the good standing of the
Seller under the laws of the State of _________.
2. Except as have been previously discussed in writing by the Seller,
there are no actions, suits or proceedings pending or threatened against or
affecting the Seller which if adversely determined, individually or in the
aggregate, would materially adversely affect the Seller's obligations under
(a) the Master Mortgage Loan Purchase Agreement (the "Master Mortgage Loan
Purchase Agreement") dated as of March __, 1998 between the Seller and DLJ
Mortgage Capital, Inc. ("DLJMC"), (b) the Confirmation Letter[s] dated
____________, 199__ (the "Confirmation Letter[s]") between the Seller and
DLJMC, (c) the Servicing Agreement dated as of ___________
_______________________________ (as amended, the "Servicing Agreement")
among the Seller, DLJMC, _________________ and Bankers Trust Company (the
"Custodian"), (d) the Custody Agreement dated as of ________ ___, 199__ (as
amended, the "Custody Agreement") among the Seller, DLJMC and the
Custodian, and (e) the Assignment and Conveyance, dated ______________,
199_. The Master Mortgage Loan Purchase Agreement, the Confirmation
Letter[s], the Servicing Agreement, the Custody Agreement and the
Assignment and Conveyance are collectively referred to herein as the
"Agreements."
3. Each person who, as an officer or representative of the Seller,
signed any of the Agreements or any other document delivered prior hereto
or on the date hereof in connection with the transactions described in the
Agreements was, at the respective times of such signing and delivery, and
is now, duly elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents are their genuine signatures.
4. Each of the Mortgage Loans to be sold on the date hereof was
originated or acquired (1) by the Seller either directly or indirectly
through loan brokers or a correspondent lender specifically approved by the
Seller and DLJMC, such that (a) the Mortgage Loan was originated in
conformity with the Seller's underwriting guidelines, (b) DLJMC approved
the Mortgage Loan either prior to or after the funding thereof, and (c) the
Seller funded the Mortgage Loan on the date of origination thereof with its
own funds or with funds obtained by it or, in the case of a Mortgage Loan
originated by a
-2-
correspondent lender approved by the Seller and DLJMC, the Mortgage Loan
was approved by the Seller prior to origination and was purchased by the
Seller from such correspondent lender within 30 days of the date of
origination pursuant to a mandatory purchase commitment in effect at
origination, (2) by a savings and loan association, savings bank,
commercial bank, credit union, insurance company or similar institution
that is supervised and examined by a federal or state authority or (3) by a
mortgagee approved by the Secretary of the Department of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act,
as amended.
5. All of the Seller's representations and warranties contained in
the Agreements are true and correct in all material respects as of the
respective dates thereof and are true and correct in all material respects
as of the date hereof (except with respect to the representations and
warranties in the Master Mortgage Loan Purchase Agreement related to the
Mortgage Loans sold on any Closing Date prior to the date hereof, as to
which no representation or warranty is made as of the date hereof), and no
event of default in the performance of any of the Seller's covenants or
agreements under the Agreements has occurred and is continuing, nor has an
event occurred which with the passage of time or notice or both would
become such event of default.
6. With respect to its transfer of the Mortgage Loans to be sold on
the date hereof and the transactions contemplated by the Agreements, the
Seller has complied in all material respects with all the agreements by
which it is bound and has satisfied in all material respects all the
conditions on its part to be performed or satisfied prior to the date
hereof other than those which have been waived pursuant to the terms of the
Agreements.
7. Attached hereto is a certified true copy of the resolutions of the
Board of Directors of the Seller which authorize the sale of the Mortgage
Loans to be sold on the date hereof, and the same are in full force and
effect and have not been revoked, repealed or amended.
8. The representations and warranties contained in Exhibit 6 to the
Master Mortgage Loan Purchase Agreement and in each Assignment and
Conveyance dated the date hereof are true and correct with respect to the
Mortgage Loans to be sold on the date hereof.
9. Any necessary consents, approvals, authorizations or orders of any
court or governmental agency or body, which are required for the execution,
delivery and performance by the Seller of or compliance by the Seller with
the Agreements, the sale of the Mortgage Loans to be sold on the date
hereof as evidenced by the Agreements, or the consummation of the
transactions contemplated by the Agreements, have been obtained. The
Agreements and all related agreements have been authorized by the Board of
Directors of the Seller, such authorization being reflected in the minutes
of that Board and shall be maintained from the date of their execution as
records of the Seller. The Agreements and
-3-
all related agreements are and shall be from the time of their execution
official records of the Seller.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings specified in the Master Mortgage Loan Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Seller.
Dated: ____________, 199__
BNC MORTGAGE, INC.
I, ________________________, [Assistant] Secretary of BNC Mortgage, Inc.,
hereby certify that _________________ is a duly elected, qualified and acting
____________ of the Seller and that the signature appearing above is such
person's genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: ____________, 199__
________________________
BNC MORTGAGE, INC.
EXHIBIT 3
FORM OF RESOLUTIONS
[To be supplied by _________________________]
EXHIBIT 4
FORM OF OPINION LETTER OF COUNSEL TO THE SELLER
[To be supplied by ___________]
EXHIBIT 5
FORM OF CONFIRMATION LETTER
[Letterhead of the Purchaser]
____________, 199__
_________________________
_________________________
_________________________
Re: Master Mortgage Loan Purchase Agreement between
DLJ Mortgage Capital, Inc. and BNC Mortgage, Inc.
Ladies and Gentlemen:
Reference is made to the Master Mortgage Loan Purchase Agreement dated
as of March __, 1998 (the "Agreement") between DLJ Mortgage Capital, Inc. (the
"Purchaser") and BNC Mortgage, Inc. (the "Seller"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings specified in the
Agreement.
The Purchaser hereby confirms its agreement to purchase, and the
Seller hereby acknowledges its agreement to sell, pursuant to the Agreement,
[Fixed Rate Mortgage Loans having an original term to maturity from the due date
of the first monthly payment of [15/30] years] [Adjustable Rate Mortgage Loans
that have __________________ as the Index, that have a fixed initial interest
rate period equal to approximately [___ year[s]/six months]] and that are [not]
subject to negative amortization. The Mortgage Loans shall be sold on an
[actual/actual][scheduled/scheduled/scheduled] basis. The [Seller][Purchaser]
shall be entitled to retain any late payment charges and prepayment charges on
the Mortgage Loans. The Cut-off Date for such Mortgage Loans shall be
____________, 199__ and the Closing Date for such Mortgage Loans shall be
____________, 199__. The aggregate outstanding principal balance of such
Mortgage Loans, as of the close of business on the related Cut-off Date, shall
be $_________. The purchase price for such Mortgage Loans shall be equal to
_____% of such principal balance, together with interest accrued on such
principal balance at a per annum rate equal to _____% from the related [Cut-off
Date] [paid through date] to but not including the related Closing Date[;
provided that, the Purchaser shall not pay more than 60 days accrued interest
with respect to any Mortgage Loan].
-2-
If the foregoing accurately reflects our agreement with respect to the
matters specified above, please have a copy of this letter signed by an
authorized representative and return such copy to the Purchaser at the address
for notices provided in the Agreement.
DLJ MORTGAGE CAPITAL, INC.
By: _______________________________
Name:
Title:
Acknowledged and agreed:
BNC MORTGAGE, INC.
By: ____________________________
Name:
Title:
EXHIBIT 6
SELLER REPRESENTATIONS AND WARRANTIES
Representations and Warranties. Pursuant to Section 6 and Section 11 of
------------------------------
the Master Mortgage Loan Purchase Agreement, the Seller has made or will make
certain representations and warranties to the Purchaser. The Seller shall
confirm such representations and warranties and in connection therewith shall
deliver an Officers' Certificate on each Closing Date and, pursuant to Section
11 of the Master Mortgage Loan Purchase Agreement, on the closing date of each
Whole Loan Transfer and Pass-Through Transfer by the Initial Purchaser,
reaffirming such representations and warranties as of such dates. The following
representations and the representations required pursuant to Section 11 of the
Master Mortgage Loan Purchase Agreement also may be, as part of any Whole Loan
Transfer or Pass-Through Transfer, assigned by the Purchaser, together with the
related repurchase rights specified in the Master Mortgage Loan Purchase
Agreement. All capitalized terms used herein and not otherwise defined in the
Master Mortgage Loan Purchase Agreement shall have the meanings assigned in the
Finance Facility.
The Seller hereby represents and warrants to the Purchaser, as to each
Mortgage Loan, that as of the related Closing Date or as of such other date
specifically provided herein:
(i) The information set forth on the related Mortgage Loan Schedule
with respect to each Mortgage Loan is true and correct in all material respects
as of the related Closing Date, and each of the representations and warranties
contained in the Assignment and Conveyance related to such Mortgage Loan
Schedule is true and correct in all material respects with respect to the
Mortgage Loans identified therein;
(ii) Each Mortgage is a valid and enforceable first lien on the
Mortgaged Property subject only to (1) the lien of nondelinquent current real
property taxes and assessments, (2) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as of the date of
recording of such Mortgage, such exceptions appearing of record being acceptable
to mortgage lending institutions generally or specifically reflected in the
appraisal made in connection with the origination of the related Mortgage Loan,
and (3) other matters to which like properties are commonly subject that do not
materially interfere with the benefits of the security intended to be provided
by such Mortgage;
(iii) Immediately prior to the delivery of the Mortgage Loan to the
Purchaser, the Seller had good title to, and was the sole owner of, such
Mortgage Loan free and clear of any mortgage, pledge, lien, security interest,
charge or other encumbrance (other than any junior lien on the Mortgaged
Property encumbered by the related Mortgage) and has full right and authority,
subject to no interest or participation of, or agreement with, any other party,
to sell and assign the Mortgage Loan pursuant to this Agreement;
(iv) There was no delinquent tax or assessment lien against any
Mortgaged Property at the time of the origination of the related Mortgage Loan;
-2-
(v) There is no valid offset, defense or counterclaim to any
Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay the
unpaid principal of or interest on such Mortgage Note, and any applicable right
of rescission has expired as of the related Closing Date;
(vi) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property that are or may be a lien prior to, or
equal with, the lien of such Mortgage, except those that are insured against by
the title insurance policy referred to in clause (x) below;
(vii) Each Mortgaged Property is free of material damage and is in at
least adequate repair;
(viii) Each Mortgage Loan at origination complied in all respects with
applicable state and federal laws, including, without limitation, usury, equal
credit opportunity, real estate settlement procedures, truth-in-lending and
disclosure laws, and consummation of the transactions contemplated hereby will
not involve the violation of any such laws;
(ix) At the related Closing Date, neither the Seller nor any prior
holder of any Mortgage has, except as the Mortgage File may reflect, (1)
modified the Mortgage in any material respect, (2) satisfied, canceled or
subordinated such Mortgage in whole or in part, (3) released the related
Mortgaged Property in whole or in part from the lien of such Mortgage or (4)
executed any instrument of release, cancellation, modification or satisfaction
with respect thereto;
(x) A lender's policy of title insurance or a commitment (binder)
to issue the same was effective on the date of the origination of each Mortgage
Loan, each such policy is valid and remains in full force and effect and each
such policy was issued by a title insurer acceptable to the Federal National
Mortgage Association ("FNMA") or the Federal Home Loan Mortgage Corporation
("FHLMC") and in a form acceptable to FNMA or FHLMC;
(xi) Each Mortgage Loan was originated or acquired (1) by the Seller
either directly or indirectly through loan brokers or a correspondent lender
specifically approved by the Seller and the Purchaser, such that (a) the
Mortgage Loan was originated in conformity with the Seller's underwriting
guidelines, (b) the Purchaser approved the Mortgage Loan either prior to or
after the funding thereof and (c) the Seller funded the Mortgage Loan on the
date of origination thereof with its own funds or with funds obtained by it or,
in the case of a Mortgage Loan originated by a correspondent lender approved by
the Seller and the Purchaser, the Mortgage Loan was approved by the Seller prior
to origination and was purchased by the Seller from such correspondent lender
within 30 days of the date of origination pursuant to a mandatory purchase
commitment in effect at origination, (2) by a savings and loan association,
savings bank, commercial bank, credit union, insurance company or similar
institution that is supervised and examined by a federal or state authority or
(3) by a mortgagee approved by the Secretary of
-3-
Department of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act, as amended;
(xii) All of the improvements that were included for the purpose of
determining the appraised value of the Mortgaged Property are insured to lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property, unless, in either case, an agreement permitting such encroachment is
recorded in the applicable real property records and such agreement was taken
into account in conducting the appraisal of the Mortgaged Property;
(xiii) No portion of any improvement considered in determining the
related appraised value located on or being part of the Mortgaged Property is in
violation of any applicable zoning law or regulation. All inspections, licenses
and certificates required to be made or issued with respect to the use and
occupancy of the Mortgaged Property, including but not limited to certificates
of occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities and the Mortgaged Property is lawfully occupied
under applicable law;
(xiv) All parties that have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are, or, during the period in
which they held and disposed of such interest, were (1) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (2)(a) organized under the laws of such
state, (b) qualified to do business in such state, (c) federal savings
associations or national banks having principal offices in such state or (d) not
doing business in such state;
(xv) The Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms. All parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note and the Mortgage
and each Mortgage Note and Mortgage has been duly and properly executed and
delivered by such parties;
(xvi) The proceeds of the Mortgage Loan have been fully disbursed by
the Seller, there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor (including any escrow funds held
to make monthly payments pending completion of such improvements) have been
complied with. All costs, fees and expenses incurred in making, closing or
recording the Mortgage Loans were paid;
(xvii) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof adequate
for the realization against the Mortgaged Property of the benefits of the
security, including (1) in the case of a Mortgage designated as a deed of trust,
by trustee's sale, and (2) otherwise by judicial foreclosure. There
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is no homestead or other exemption available to the Mortgagor that would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage;
(xviii) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the holder of the Mortgage Loan to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(xix) Each Mortgaged Property is suitable for year-round occupancy;
(xx) There exist no deficiencies with respect to escrow deposits
and payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due with respect to the Mortgage Loan (other than
origination points and fees) have been capitalized under the Mortgage or the
related Mortgage Note;
(xxi) The origination practices used by the Seller with respect to
each Mortgage Loan have been in all respects legal, proper, prudent and
customary in the mortgage origination business;
(xxii) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations;
(xxiii) No Mortgage Loan has a shared appreciation feature or other
contingent interest feature;
(xxiv) No Mortgage Loan is subject to any temporary buydown
provisions;
(xxv) With respect to each Mortgage Loan in which the Mortgagor has
a leasehold interest in the related Mortgaged Property:
(a) The leasehold was created by direct lease of the freehold
estate, and the ground lease or memorandum thereof has been
recorded and by its terms permits the leasehold estate to be
mortgaged. The ground lease grants any leasehold mortgagee
standard protection necessary to protect the security of a
leasehold mortgagee, including the right of the leasehold
mortgagee to receive notice of the lessee's default under the
ground lease, the right of the leasehold mortgagee, with adequate
time, to cure such default, and, in the case of incurable defaults
of the lessee, the right of the leasehold mortgagee to enter into
a new ground lease with the lessor on terms financially identical
and otherwise substantially identical to the existing ground
lease;
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(b) The ground lease was at the origination of the Mortgage
Loan and, to the best of the Seller's knowledge is, in full force
and effect without any outstanding defaults, and was at the
origination of the Mortgage Loan and, to the best of Seller's
knowledge is, not subject to liens and encumbrances;
(c) The ground lease shall be automatically renewable for at
least thirty (30) years or at least ten (10) years beyond the
scheduled date for the final payment on the Mortgage Loan; and
(d) The fee estate of the lessor under the ground lease is
encumbered by the ground lease, and any lien of any present or
future fee mortgagee is and will be subject to and subordinate to
the ground lease. The foreclosure of the fee mortgage will not
terminate the leasehold estate or the rights of the sub-tenants,
and the fee mortgage is subject to the ground lease;
(xxvi) Pursuant to the terms of the related Mortgage, all buildings
or other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the Mortgaged Property is
located pursuant to insurance policies conforming to the requirements of FNMA
and FHLMC. If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance
policy is in effect which policy conforms to the requirements of FNMA and FHLMC;
(xxvii) An appraisal of each Mortgaged Property is on a form approved
by FNMA or FHLMC with such riders as have been approved by FNMA or FHLMC, as the
case may be, and each appraiser meets the minimum qualifications of FNMA or
FHLMC for appraisers;
(xxviii) The Seller has not provided financing on any Mortgaged
Property that is subordinate to the lien of the related Mortgage Loan;
(xxix) Each Mortgage Loan contains a customary "due-on-sale" clause;
(xxx) Except for the criteria for eligible Mortgagors set forth in
the Seller's underwriting guidelines, the Seller knows of nothing involving any
Mortgage File, Mortgaged Property or Mortgagor's credit standing that could
reasonably be expected (1) to cause private institutional investors to regard
the Mortgage Loan as an unacceptable investment, (2) to cause the Mortgage Loan
to become delinquent or (3) to affect adversely the value or marketability of
the Mortgage Loan;
(xxxi) There are no condemnation proceedings pending with respect to
any Mortgaged Property, and no Mortgaged Property has been condemned either in
whole or in part;
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(xxxii) Except as identified on the Assignment and Conveyance, none
of such Mortgage Loans will have been thirty or more days delinquent more than
once during the twelve months preceding the date hereof;
(xxxiii) All of the Mortgage Loans were originated or acquired under
the Seller's "regular lending program"; and
(xxxiv) The Mortgage Loans identified on the Mortgage Loan Schedule
attached hereto were not selected for inclusion therein from the Seller's
portfolio of mortgage loans originated under its "regular lending program" on
any basis which would have a material adverse affect on the Purchaser.
EXHIBIT 7
FORM OF CROSS-RECEIPT
____________, 199__
Reference is made to the Master Mortgage Loan Purchase Agreement dated
_________, 199_ (the "Master Mortgage Loan Purchase Agreement") between DLJ
Mortgage Capital, Inc. (the "Company") and BNC Mortgage, Inc. (the "Seller") and
the Confirmation Letter dated ____________, 199__ (the "Confirmation Letter")
between the Seller and the Company, relating to the purchase and sale of the
Mortgage Loans identified on the related Mortgage Loan Schedule. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
specified in the Master Mortgage Loan Purchase Agreement.
(i) The Company hereby acknowledges receipt of the Mortgage Loans
identified on such Mortgage Loan Schedule.
DLJ MORTGAGE CAPITAL, INC.
By: _______________________________________
Name:
Title:
(ii) BNC Mortgage, Inc. hereby acknowledges receipt from the Company
of funds in the amount specified in the Confirmation Letter.
BNC MORTGAGE, INC.
By: _______________________________________
Name:
Title:
EXHIBIT 8
FORM OF ASSIGNMENT AND CONVEYANCE
On this ___ day of _________, 199__, BNC Mortgage, Inc. (the "Seller"), as
the seller under that certain Master Mortgage Loan Purchase Agreement dated
___________, 199_ (the "Agreement"), between the Seller and DLJ Mortgage
Capital, Inc. (the "Purchaser"), does hereby sell, transfer, assign, set over
and convey to Purchaser, as the purchaser under the Agreement, without recourse,
but subject to the terms of the Agreement, all the right, title and interest of
the Seller in and to the Mortgage Loans identified on the Mortgage Loan Schedule
attached hereto, together with the related Mortgage Files and all rights and
obligations arising under the documents contained therein. The Seller has
delivered the documents for each such Mortgage Loan in accordance with Section 3
of the Agreement. The ownership of the Mortgage Note and Mortgage related to
each such Mortgage Loan, and the contents of the related Mortgage File, shall be
vested in the Purchaser and the ownership of all records and documents with
respect to each such Mortgage Loan prepared by or which come into the possession
of the Seller shall immediately vest in the Purchaser and, to the extent
retained by the Seller, shall be retained and maintained, in trust, by the
Seller at the will of the Purchaser in a custodial capacity only.
The Seller confirms to the Purchaser that the representations and
warranties set forth in Section 6 and Section 11 of the Agreement and in Exhibit
6 to the Agreement are true and correct in all respects as of the date hereof
with respect to the Seller and the Mortgage Loans identified on the Mortgage
Loan Schedule attached hereto, and that all statements made in the Officers'
Certificate of the Seller dated the date hereof and all attachments thereto are
true and correct in all respects as of the date hereof, and the Seller makes the
following additional representations and warranties to the Purchaser:
(a) The Mortgage Loans are serviced by _________ and __________,
pursuant to Servicing Agreement, dated as of __________ (as amended, the
"Servicing Agreement"), among the Seller, the Initial Purchaser,
______________ and ________________________.
(b) [Identify loan characteristics regarding fixed vs. adjustable
rate loans, graduated payment and negative amortization characteristics,
index and margin for adjustable rate loans, amortization schedule for
mortgage loans].
(c) The Mortgage Loans shall be sold on an [actual/actual]
[scheduled/scheduled] basis.
(d) The [Seller][Purchaser] shall be entitled to retain any late
payment charges and prepayment charges on the Mortgage Loans.
[(e) When measured by unpaid principal balance, no more than __% of
the Mortgage Loans [, which are [specify Mortgage Loan type and
underwriting program if different from balance of Mortgage Loan Package]]
have been thirty or more days delinquent more than once during the
preceding twelve months.]
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(f) No more than approximately ___% of the Mortgage Loans identified
on the Mortgage Loan Schedule attached hereto, by outstanding principal
balance as of the related Cut-off Date, have Mortgaged Properties that are
located in any one zip code area, and no more than approximately ___% of
such Mortgage Loans, by outstanding principal balance as of such Cut-off
Date, have Mortgaged Properties that are located in any one zip code area
in the State of California.
(g) No Mortgage Loan had a Loan-to-Value Ratio at origination in
excess of __%. No Mortgage Loan had a combined Loan-to-Value Ratio at
origination, including any second deed of trust subordinated to the lien of
the Mortgage, in excess of 90%.
The Seller shall confirm the foregoing representations and warranties,
pursuant to Section 11 of the Agreement, on the closing date of each Whole Loan
Transfer and Pass-Through Transfer of any of the related Mortgage Loans by the
Initial Purchaser and, in connection therewith, shall deliver an Officers'
Certificate on such date, reaffirming the foregoing representations and
warranties as of such date with respect to such Mortgage Loans (with such
modifications as are permitted by such section) and providing the repurchase
rights specified in the Agreement in respect of the representations and
warranties made as of such date. The foregoing representations and warranties
and the representations and warranties required pursuant to Section 11 of the
Agreement may be, as part of any Whole Loan Transfer or Pass-Through Transfer,
assigned by the Purchaser together with the related repurchase rights specified
in the Agreement and such Officers' Certificate.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
IN WITNESS WHEREOF, the Seller has caused this instrument to be signed by
its officer thereunto duly authorized as of the date first above written.
BNC MORTGAGE, INC.
By: _________________________________
Name:
Title: