Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - UNITED COMMUNITY BANKS INC | t67624_8k.htm |
| EX-4.2 - EXHIBIT 4.2 - UNITED COMMUNITY BANKS INC | ex4-2.htm |
| EX-1.3 - EXHIBIT 1.3 - UNITED COMMUNITY BANKS INC | ex1-3.htm |
| EX-1.2 - EXHIBIT 1.2 - UNITED COMMUNITY BANKS INC | ex1-2.htm |
| EX-4.1 - EXHIBIT 4.1 - UNITED COMMUNITY BANKS INC | ex4-1.htm |
| EX-99.1 - EXHIBIT 99.1 - UNITED COMMUNITY BANKS INC | ex99-1.htm |
Exhibit
1.1
EXECUTION
COPY
ASSET PURCHASE AND SALE AGREEMENT
________________________________________
UNITED
COMMUNITY BANK,
a
bank organized under the laws of the State of Georgia,
FLETCHER
INTERNATIONAL, INC.,
a
Delaware corporation,
and
each
affiliate of Fletcher International, Inc. that becomes a party
to
this Agreement by entering into a Joinder Agreement
________________________________________
Dated
as of April 1, 2010
TABLE
OF CONTENTS
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Exhibit
A
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List
of Offered Assets
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Exhibit
B-1
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The
Loan File
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Exhibit
B-2
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The
Property File
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Exhibit
C-1
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Representations
and Warranties of the Seller regarding Assets that are Commercial Mortgage
Loans
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Exhibit
C-2
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Representations
and Warranties of the Seller regarding Assets that are Residential
Loans
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Exhibit
C-3
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Representations
and Warranties of the Seller regarding Assets that are REO
Properties
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Exhibit
D
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Form
of Bill of Sale
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Exhibit
E
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Form
of Joinder
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Exhibit
F
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Form
of Disclosure of information on lead-based paint and lead based paint
hazard.
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Exhibit
G
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Form
of Administration and Servicing Agreement
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●
Schedule A, Reported Information
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Exhibit
H
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Form
of Certificate of the Seller
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Exhibit
I
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Form
of Opinion of Seller
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Exhibit
J
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Form
of Loan Agreement
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ii
ASSET
PURCHASE AND SALE AGREEMENT
This
ASSET PURCHASE AND SALE AGREEMENT (as amended, restated, or otherwise modified
and in effect from time to time, this “Purchase Agreement”),
is dated as of April 1, 2010 (the “Commitment Date”),
among UNITED COMMUNITY BANK, a bank organized under the laws of the
State of Georgia, as Seller, Fletcher International, Inc., a Delaware
corporation (“Fletcher”), and each
affiliate of Fletcher that becomes a party to this Purchase Agreement as a
purchaser (each, a “Purchaser”) by
entering into a Joinder (as defined herein) to this Purchase
Agreement.
BACKGROUND
Concurrently
with the execution of this Purchase Agreement, Fletcher International, Ltd., a
company domiciled in Bermuda, and United Community Banks, Inc., a corporation
organized under the laws of the State of Georgia (“UCBI”), will enter
into the Securities Purchase Agreement, dated as of the date hereof, pursuant to
which (a) Fletcher International, Ltd. will agree to purchase from
UCBI, and UCBI will agree to issue and sell to Fletcher International, Ltd.,
from time to time, in whole or in part, sixty-five thousand shares of UCBI’s
Series C convertible preferred stock, par value one dollar ($1.00) per share and
(b) upon receipt of the Deposit (as defined herein), UCBI will issue a warrant
to Fletcher International, Ltd. evidencing rights to purchase from UCBI, subject
to certain terms and conditions, securities issued by UCBI.
The
Seller, an affiliate of UCBI, wishes to sell, and Fletcher, through one or more
of its affiliates, wishes to purchase, subject to the terms and conditions set
forth in this Purchase Agreement, certain non-performing commercial and
residential mortgage loans, REO properties and related property. Each
such purchase of assets will be funded in part (80%) by funds loaned
to the applicable Purchaser by United Community Bank as lender pursuant to a
loan agreement to be entered into with such Purchaser.
Each
Purchaser will initially appoint United Community Bank as its administrator and
servicer pursuant to a servicing agreement between United Community
Bank and such Purchaser to service, manage, restructure and sell the assets at
the direction of the Purchaser.
Now,
therefore, in consideration of the premises and the mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties agree as follows:
SECTION 1. Usages and
Definitions.
Capitalized
terms used but not otherwise defined in this Purchase Agreement are defined
herein and in Appendix
A. Appendix
A also contains rules as to usage applicable to this Purchase Agreement.
Appendix A is
incorporated by reference into this Purchase Agreement.
SECTION 2. Commitment; Selection and
Purchases of Assets; Optional Exchange and Pre-Closing
Substitutions.
(a) Subject
to the terms and provisions of this Purchase Agreement and the satisfaction of
the conditions described herein, the Seller hereby agrees to sell, transfer,
assign, set over and otherwise convey to one or more Purchasers, and Fletcher
agrees to cause one or more of its affiliates, each as a Purchaser, to purchase,
between $99,500,000 and $100,500,000 by Carrying Value of Offered Assets (or
such other amount as may be agreed upon in writing by the Seller and Fletcher)
in one or more Closings. After the Commitment Date and throughout the
Substitution Period, the Seller shall update the information regarding the
Offered Assets set forth in Exhibit A and shall
promptly, and in any event prior to any purchase of an Offered Asset, notify
each applicable Purchaser of any change in such information. Fletcher
will select or to cause one or more of the Purchasers to select the Offered
Assets which are to be purchased by sending written notice to the Seller by
April 12, 2010. To the extent Fletcher and the Purchasers have not
selected Offered Assets for purchase that have a total Carrying Value of at
least $99,500,000 on or prior to April 12, 2010, the Seller may, in its sole
discretion, by written notice to Fletcher not later than April 14, 2010, select
the remaining Offered Assets to be purchased such that the total Carrying Value
of the Offered Assets to be purchased is between $99,500,000 and $100,500,000.
Each of the Seller and each applicable Purchaser shall use commercially
reasonable efforts to complete the purchase of all Offered Assets
selected for purchase on April 30, 2010 or as soon as reasonably practicable
thereafter, and in any event, by May 31, 2010.
(b) A
Purchaser may exchange any Offered Asset selected for purchase for one or more
Offered Assets by written notice to the Seller at any time on or prior to April
23, 2010 (an “Optional
Exchange”). If a Purchaser elects to make an
Optional Exchange, the Purchaser shall use commercially reasonable efforts to
complete its due diligence of additional Offered Assets prior to the intended
Closing Date so that such additional Offered Assets may be purchased on such
Closing Date, and, if such additional Offered Assets are not
purchased on such Closing Date, the Seller and the Purchaser shall use
commercially reasonable efforts to effect the Closing with respect to any such
additional Offered Asset as soon as reasonably practicable, and in any event by
May 31, 2010.
(c) The
Seller shall notify Fletcher and the applicable Purchaser if it obtains
knowledge that any Asset or Offered Asset is a Breaching Asset. From
April 23, 2010 until May 31, 2010, if a Purchaser obtains knowledge that an
Asset or an Offered Asset is a Breaching Asset, the Purchaser may exchange
such Breaching Asset for one or more Offered Assets (a “Pre-Closing
Substitution”). If a Purchaser elects to make a Pre-Closing
Substitution, the Purchaser shall use commercially reasonable efforts to
complete its due diligence of additional Offered Assets prior to the intended
Closing Date so that such additional Offered Assets may be purchased on such
Closing Date, and, if such Offered Assets are not purchased on such Closing
Date, the Seller and the Purchaser shall use commercially reasonable efforts to
effect the Closing with respect to any such additional Offered Assets as soon as
reasonably practicable, and in any event by May 31, 2010.
2
(d) If an
Offered Asset exchanged for a Breaching Asset pursuant to the terms of clause (c) above is
determined by a Purchaser to be a Breaching Asset prior to its purchase,
the procedures set forth in clause (c) above
shall be repeated.
(e) The
Assets sold in a particular Closing will be identified in the Asset List
attached as Schedule A to the applicable Bill of Sale to be executed between the
Seller and the related Purchaser. Subject to the terms and provisions
of this Purchase Agreement and the applicable Bill of Sale, the Seller will
sell, transfer, set over and otherwise convey the Assets identified in Schedule
A to such Bill of Sale to the related Purchaser, including (1) all interest and
principal received with respect to such Assets after the related Cut-off Date or
received on or before the related Cut-off Date but not posted until after the
related Cut-off Date; (2) any funds held in escrow, reserve or other accounts by
the Seller with respect to such Assets; (3) all related title, hazard, or other
insurance policies of any nature pertaining to such Assets, (4) all documents
related to the Mortgage Asset, including the Loan Files, the Property Files and
the Servicing Files, (5) the servicing rights appurtenant to such Assets and (6)
all proceeds derived in any way from any of the foregoing, all on the terms set
forth in this Purchase Agreement and the applicable Bill of Sale, and agrees
that it will from time to time execute and deliver to the related Purchaser or
its designee such instruments of further assurance and other instruments and
will take such other action as the related Purchaser may reasonably request in
order to evidence the purchase evidenced by such Bill of Sale. On the
related Closing Date, the related Purchaser shall pay the applicable Purchase
Price for such Assets to the Seller in accordance with Section
8(c).
(f)
In
connection with each of the Seller’s assignments of Assets pursuant to subsection (e) above,
the Seller will release the Loan File for each Mortgage Loan and the Property
File for each REO Property to the applicable Purchaser. Upon the sale
of any Assets to a Purchaser, the ownership of all related Mortgage Notes, all
related Mortgages, all related Loan Files and all related Property Files, as
applicable, shall vest immediately in the Purchaser, and the ownership of all
records and documents with respect to the Assets prepared by or which come into
possession of the Seller or the Servicer shall vest immediately in the
Purchaser, and shall be retained and maintained by the Lender as bailee pursuant
to the terms of the Loan Agreement. Notwithstanding the foregoing, a
Purchaser may, at its own expense, appoint a custodian to take possession of the
Loan Files and Property Files relating to its Assets; provided that such
Purchaser, the Lender and the custodian enter into a custodial agreement
reasonably acceptable to such parties.
3
(g) It is
acknowledged and agreed by the Seller that the Purchaser or its agents
may perform a due diligence review of the Loan Files and Property
Files to enable the Purchaser or its agents to confirm on or before the 60th day
following the related Closing Date that each of the documents and instruments
set forth in Exhibits B-1 and
B-2, as
applicable, has been delivered by the Seller with respect to each such Loan File
or Property File. In the event Seller fails to so deliver each such Loan File or
Property File to the Purchaser, the Purchaser and its successors and assigns
shall be entitled to pursue rights and remedies, including the rights or
remedies in respect of such failure provided in Section 7 hereof. If
the Seller cannot deliver, or cause to be delivered, as to each Mortgage
File, the original or a copy of any of the documents or instruments
referred to in clauses (b), (c), (f) or
(g) of Exhibit B-1, or
in clause (d)
of Exhibit B-2,
as applicable, with evidence of recording thereon, solely because of a delay
caused by the public recording or filing office where such document or
instrument has been delivered for recordation or filing, or because such
original recorded document has been lost or returned from the recording or
filing office and subsequently lost, as the case may be, the delivery
requirements of Section 2(f) shall be
deemed to have been satisfied as to such missing item, and such missing item
shall be deemed to have been included in the related Loan File or Property File,
as applicable, provided that a copy
of such document or instrument (without evidence of recording or filing
thereon, but certified (which certificate may relate to multiple documents
and/or instruments) by the Seller to be a true and complete copy of the
original thereof submitted for recording or filing, as the case may be) has been
delivered to or at the direction of the Purchaser, and either the original of
such missing document or instrument, or a copy thereof, with evidence of
recording or filing, as the case may be, thereon, is delivered to or at the
direction of the Purchaser (or any subsequent owner of the affected Assets)
within 180 days of the Closing Date (or within such longer period after the
Closing Date as the related Purchaser (or such subsequent owner) may consent to,
which consent shall not be unreasonably withheld so long as the Seller has
provided the related Purchaser (or such subsequent owner) with evidence of such
recording or filing, as the case may be, or has certified to the related
Purchaser (or such subsequent owner) as to the occurrence of such recording or
filling, as the case may be, and is, as certified to the related Purchaser (or
such subsequent owner) no less often than quarterly, in good faith attempting to
obtain from the appropriate county recorder’s or filing office such original or
copy). If the Seller cannot deliver, or cause to be delivered, as to the Assets,
the original or a copy of the related lender’s Title Insurance Policy referred
to in clause
(e) of
Exhibit B-1 or clause (h) of Exhibit B-2 solely
because such policy has not yet been issued, the delivery requirements of
Section 2(f)
shall be deemed to be satisfied as to such missing item, and such missing item
shall be deemed to have been included in the related Loan File or Property File,
as applicable, provided that the
Seller has delivered to the Purchaser a commitment for title insurance
“marked-up” at the Closing, and the Seller shall deliver to or at the direction
of the Purchaser (or any subsequent owner of the affected Asset), promptly
following the receipt thereof, such Title Insurance Policy.
4
(h) As to the
Assets, the Seller shall be responsible for all costs associated with the
recording or filing, as the case may be, of each assignment referred to in clauses (b), (c) and (f) of
Exhibit B-1 and
each UCC financing statement, if any, referred to in clause (g) of Exhibit B-1;
provided that
the Seller shall not be responsible for actually recording or filing any such
document or instrument. If any such document or instrument is lost or returned
unrecorded or unfiled, as the case may be, because of a defect therein, the
Seller shall promptly prepare or cause the preparation of a substitute therefor
or cure or cause the curing of such defect as the case may be, and shall
thereafter deliver the substitute or corrected document to or at the direction
of the Purchaser (or any subsequent owner of the affected Assets) for recording
or filing, as appropriate at the Seller’s expense.
(i)
All
documents and records in the Seller’s possession (or under its control)
relating to Assets that are not required to be a part of a Loan File in
accordance with Exhibit B-1 or
part of a Property File in accordance with Exhibit B-2 or are
reasonably required to service the Assets (all such other documents and records,
the
“Servicing File”),
together with all escrow payments, reserve funds and other comparable funds in
the possession of the Seller (or under its control) with respect to the Assets,
if any, shall be delivered by the Seller to the Servicer on the related Closing
Date.
(j)
Through
the related Closing Date, the Seller shall assume all risk of loss to the
Mortgaged Properties and REO Properties. From and after the related
Closing Date, the applicable Purchaser will assume all risk of loss to the
Mortgaged Properties and REO Properties.
(k) The
Seller’s records will reflect the transfer of Assets to a Purchaser as a
sale.
(l)
All
Collections received by the Seller shall be held by the Servicer without set off
or counterclaim and shall be reported to the Purchaser and deposited to the
Purchaser’s Collection Account within two Business Days of receipt
thereof
(m) It is
intended that the conveyance of the Seller’s right, title and interest in and to
the Assets pursuant to this Purchase Agreement and the related Bill of Sale
shall constitute, and shall be construed as, a purchase and sale and not a
secured borrowing. However, if such conveyance is deemed to be a secured
borrowing, it is intended that the rights and obligations of the parties to such
loan shall be established pursuant to the terms of this Purchase Agreement and
the related Bill of Sale, and the Seller hereby grants to the related Purchaser
a first priority security interest in all of the Seller’s right, title and
interest in and to the Assets specified in the related Bill of Sale, whether now
existing or hereafter acquired.
5
(n) No more
than five Persons may become a party to this Purchase Agreement as a
Purchaser. Each Purchaser will, to the extent reasonably practicable,
(i) purchase a substantially equivalent percentage of the total Carrying Value
of the Offered Assets selected for purchase and (ii) purchase a substantially
equivalent mix of Mortgage Loans and REO Properties.
SECTION 3. Interim Period
Activities.
(a) During
the Interim Period, the Seller shall service the Offered Assets in accordance
with Accepted Servicing Practices and all applicable federal, state and local
laws, including without limitation, maintaining in full force and effect the
hazard insurance policies, except that, with respect to Offered Assets that are
REO Properties, the Seller shall only make repairs for noticed code violations,
weather preservation, property security and demolition orders consistent with a
reasonably prudent course of business, and the Seller shall not list any such
REO Properties with a listing agent, and shall not otherwise engage a broker for
any such REO Property or enter into any brokerage agreements except as may be
agreed to in writing by the applicable Purchaser. To the extent that
the Seller has taken any such action with respect to Offered Assets that are REO
Properties in violation of the preceding sentence during the Interim Period, the
Seller shall notify the related Purchaser in writing prior to the related
Closing Date and the related Purchaser in its sole discretion may purchase such
Offered Asset, exchange such Offered Asset in an Optional Exchange or designate
such Offered Asset as a Breaching Asset.
(b) During
the Interim Period, with respect to any mortgage loan that is an Offered Asset,
the Seller shall not, without the prior written consent of the applicable
Purchaser (i) modify such mortgage loan (including, without limitation, a
release of any collateral or any party from liability on or with respect to such
mortgage loan), (ii) forgive principal in respect of such mortgage loan, (iii)
accept a deed-in-lieu of foreclosure with respect to such mortgage loan, (iv)
conduct any short sale in respect of the Mortgaged Property, (v) commence any
foreclosure with respect to such mortgage loan or bankruptcy proceeding against
the related Mortgagor, (vi) settle or compromise any condemnation or insurance
claim or proceeding in respect of such mortgage loan, (vii) settle or
compromise, or make any offers to settle or compromise, any existing litigation
or other proceedings in respect of such mortgage loan, or (viii) take any action
to materially impair any interest of a Purchaser in such mortgage loan or any
interest therein. To the extent that the Seller has taken any action
described in clauses
(i) through (viii) of the
preceding sentence in respect of any mortgage loan that is an Offered Asset
during the Interim Period, the Seller shall notify the related Purchaser in
writing prior to the related Closing Date and the related Purchaser in its sole
discretion may purchase such Offered Asset, exchange such Offered Asset in an
Optional Exchange or designate such Offered Asset as a Breaching
Asset.
6
(c) During
the Interim Period, with respect to any REO Property that is an Offered Asset,
the Seller shall not, without the prior written consent of the applicable
Purchaser (i) settle or compromise any condemnation or insurance claim or
proceeding in respect of such REO Property, (ii) settle or compromise, or make
any offers to settle or compromise, any existing litigation or other proceedings
in respect of such REO Property, or (iii) take any action to materially impair
any interest of a Purchaser in such REO Property. To the extent that
the Seller has taken any action described in clauses (i) through
(iii) of the
preceding sentence in respect of any REO Property that is an Offered Asset
during the Interim Period, the Seller shall notify the related Purchaser in
writing prior to the related Closing Date and the related Purchaser in its sole
discretion may purchase such Offered Asset, exchange such Offered Asset in an
Optional Exchange or designate such Offered Asset as a Breaching
Asset.
(d) The
Seller shall use commercially reasonable efforts to notify foreclosure and
bankruptcy attorneys retained with respect to any mortgage loan that has been
designated as an Asset to be purchased to stay, adjourn or otherwise postpone or
extend the deadline to perform all actions enforcing any of the Seller’s rights
and remedies under any of the related Mortgage Loan Documents; provided, that if any
such action will impair or irrevocably waive any rights of the Seller or
discharge or release any Mortgagor, then such action shall not be taken without
the prior written consent of the applicable Purchaser which may be withheld in
its sole and absolute discretion. In addition, each such attorney
shall be instructed to bill the Seller for fees, expenses and disbursement
incurred up until the related Closing Date.
(e) If the
Seller receives title to a Mortgaged Property during the Interim Period as a
result of foreclosure, deed-in-lieu of foreclosure, power of sale or otherwise,
such Mortgaged Property shall be an REO Property and shall be sold to a
Purchaser pursuant to the representations and warranties contained in Section 5 and such
other provisions as relate to the sale of REO Property. The Seller
shall be responsible for delivering to the related Purchaser an unrecorded Deed,
where applicable, with respect to such REO Property, together with the other
documents in the Property File on the Closing Date.
SECTION 4. Examination of Loan
Files and Due Diligence Review.
The
Seller shall reasonably cooperate with any examination of the Loan Files,
Property Files and Servicing Files that may be undertaken by or on behalf of any
Purchaser either before or after the related Closing Date. The fact that a
Purchaser has conducted or has failed to conduct any partial or complete
examination of the Loan Files, Property Files and/or Servicing Files shall not
affect the Purchaser’s right to pursue any right or remedy, including the rights
and remedies provided in Section 7 for a
breach of the Seller’s representations, warranties and covenants set forth in or
contemplated by Section
5.
7
SECTION 5. Representations, Warranties
and Covenants of the Seller.
(a) The
Seller hereby makes, as of the Commitment Date and each applicable Closing Date
(or as of such other date specifically provided in the particular representation
or warranty), to and for the benefit of Fletcher and the related Purchaser, and
their successors and assigns, each of the representations and warranties set
forth in Exhibits C-1,
C-2 and C-3, as applicable, and
indicated on Exhibit A.
(b) In
addition, the Seller, as of the Commitment Date and each Closing Date, hereby
represents and warrants to, and covenants with, Fletcher and each Purchaser
that:
(i)
The
Seller is duly incorporated and is validly existing in good standing as a state
chartered bank under the laws of the State of Georgia. The Seller is
in compliance with the laws of each State in which any Assets are located to the
extent necessary to perform its obligations under this Purchase
Agreement.
(ii) The
execution and delivery by the Seller of this Purchase Agreement and the
performance by Seller of all of its obligations hereunder have been duly
authorized by all requisite corporate action and no further consent or
authorization of the Seller, its Board of Directors or sole stockholder is
required.
(iii) The
Seller has full banking power and authority to (A) own and operate its
properties and assets and execute and deliver this Purchase Agreement and each
Bill of Sale, (B) perform its obligations hereunder and (C) carry on its
business as presently conducted and as presently proposed to be
conducted. The Seller and its subsidiaries are duly licensed,
qualified and authorized to do business and are in good standing in all
jurisdictions in which the nature of their activities and of their properties
(both owned and leased) makes such licensing, qualification or authorization
necessary, except where the failure to do would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse
Effect.
(iv) This
Purchase Agreement has been duly executed and delivered by the Seller, and when
this Purchase Agreement is duly authorized, executed and delivered by the
Purchaser, will be a valid and binding agreement enforceable against the Seller
in accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights generally and to general principles of equity.
8
(v)
Neither
the execution and delivery by the Seller of this Purchase Agreement nor the
performance by the Seller of any of its obligations hereunder violates,
conflicts with, results in a breach of, or constitutes a default (or an event
which with the giving of notice or the lapse of time or both would be reasonably
likely to constitute a default) or creates any rights in respect of any Person
under (A) the articles of incorporation or by-laws (or other comparable
documents) of the Seller or any of its Affiliates, (B) any decree, judgment,
order, law, treaty, rule, regulation or determination of any court, governmental
agency or body, or arbitrator having jurisdiction over the Seller or any of its
Affiliates or any of their respective properties or assets, or (C) the terms of
any bond, debenture, indenture, credit agreement, note or any other evidence of
indebtedness, or any agreement, stock option or other similar plan, lease,
mortgage, deed of trust or other instrument to which the Seller or any of its
Affiliates is a party, by which the Seller or any of its Affiliates is bound, or
to which any of the properties or assets of the Seller or any of its Affiliates
is subject.
(vi) There is
no pending or, to the best knowledge of the Seller, threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Seller or any of its Affiliates that
would affect the execution by the Seller of, or the performance by the Seller of
any of its obligations under, this Purchase Agreement.
(vii) The
Seller has not incurred debt, and does not intend to incur debt, beyond its
ability to pay such debt as it matures. For purposes of this
paragraph, “debt” means any liability on a claim, and “claim” means (x) a right
to payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, or (y) a right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured. With
respect to any such contingent liabilities, such liabilities are computed at the
amount which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.
(viii) The
Seller is receiving fair consideration from the Purchaser or its Affiliates for
the Assets sold and the agreements, covenants, representations and warranties
made by the Seller to the Purchaser. The Seller is not transferring
any Asset with any intent to hinder, delay or fraud any of its
creditors. The Seller has obtained the consents to the sale of the
Assets from all of its required secured lenders.
(ix)
The
Seller possesses all material certificates, authorizations and permits issued by
the appropriate federal, state or foreign regulatory authorities necessary to
conduct its business. The Seller is not in violation of any material
judgment, decree or order or any statute, ordinance, rule or regulation
applicable to it.
9
(x)
The
Seller is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses in which the Seller is engaged.
(xi)
The
Seller is not, and is not an affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.
(xii) The
Seller has not dealt with any broker, investment banker, agent or other person,
other than the Purchaser and its affiliates, that may be entitled to any
commission or compensation in connection with the sale of the Assets or the
consummation of any of the other transactions contemplated hereby.
(xiii)
No
consent, approval, authorization or order of any court, governmental agency or
other body is required for execution and delivery by the Seller of this Purchase
Agreement or any Bill of Sale or the performance by the Seller of any of its
obligations hereunder. No registration or filing with, or notice to,
any governmental authority or court is required, under federal or state law
(including, with respect to any bulk sale laws), for the execution delivery and
performance of or compliance by the Seller with this Purchase Agreement or the
consummation by the Seller of any transaction contemplated hereby, other
than (1) the filing or recording of financing statements, instruments of
assignment and other similar documents necessary in connection with the
Seller’s sale of the Assets to the Purchasers and (2) such consents, approvals,
authorizations, qualifications, registrations, filings or notices as have been
obtained or made.
(xiv)
If a
third party, including a potential purchaser of the Assets, inquires, the Seller
will promptly indicate that the Assets have been sold to a Purchaser
and the Seller will not claim any ownership interest in the
Assets.
(xv)
The
Seller’s records (including for purposes of GAAP) will reflect the transfer of
the Assets to the Purchaser as a sale.
(xvi) Each
obligor of an Asset (if any) will be notified of the sale of such Asset
contemplated hereby.
(c)
Upon
discovery by any of the parties hereto of a breach or defect of any of the
representations and warranties made pursuant to and set forth in subsection
(b) above or a breach or defect of any of the representations and warranties
made pursuant to subsection (a) above and set forth in Exhibits C-1, C-2 and C-3, as applicable,
which has a material adverse effect on the Seller’s ability to perform its
obligations hereunder or the value of any Asset, the party discovering such
breach or defect shall give prompt written notice to the other party hereto and
its assigns.
10
SECTION 6. Representations, Warranties
and Covenants of Fletcher.
Fletcher,
as of the Commitment Date and each applicable Closing Date, hereby represents
and warrants to the Seller that:
(a)
Fletcher
has been duly incorporated and is validly existing and in good standing under
the laws of the State of Delaware.
(b)
The
execution, delivery and performance of this Purchase Agreement by Fletcher have
been duly authorized by all requisite corporate action and no further consent or
authorization of Fletcher, its Board of Directors or its stockholders is
required. This Purchase Agreement has been duly executed and
delivered by Fletcher and, when duly authorized, executed and delivered by the
Seller, will be a valid and binding agreement enforceable against Fletcher in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights generally and to general principles of equity.
SECTION 7. Post-Closing Substitution of
Assets.
(a)
Within 90
days of receipt of written notice or knowledge by the Seller of a breach or
defect of any representation or warranty made pursuant to Section 5(a) and set
forth in Exhibits C-1, C-2 and C-3 that causes an
Asset to be a Breaching Asset, the Seller shall use commercially reasonable
efforts to cure such defect or breach, as the case may be, in all material
respects. For any such breach or defect for which the Seller has
received written notice or has knowledge thereof during the three-year period
following the affected Asset’s Closing Date (the “Substitution
Period”), if the Seller fails to cure such defect or breach within such
90-day period in all material respects, the related Purchaser
may exchange such Breaching Asset for one or more Offered Assets that
have an aggregate Carrying Value that is equal to or greater than the
then-current Carrying Value of the Breaching Asset that is being exchanged by
written notice to the Seller (a “Post-Closing
Substitution”); provided, that if the
aggregate Carrying Value of all Offered Assets exchanged in Post-Closing
Substitutions by all Purchasers after May 31, 2010 exceeds $15 million, or if
written notice of such exchange is delivered to the Seller after September 30,
2010, a Purchaser may only exchange Breaching Assets for which the applicable
breaches would have a material adverse effect to the Purchaser. The
Seller and the related Purchaser shall execute and deliver any and all such
additional assignments, deeds, instruments of transfer and other documents as
may be reasonably required in order to complete the exchange
transactions. The Seller shall be responsible for, and shall pay when
due and payable, all transfer, filing and recording fees and taxes, costs and
expenses, and any state or county documentary taxes, if any, with respect to the
filing or recording of any document or instrument contemplated hereby in
connection with such substitution, and shall be responsible for recording any
documents evidencing the transfers. In connection with any exchange
of assets contemplated by this Section 7, the Seller
and the related Purchaser shall tender promptly or cause to be tendered promptly
to the other party, the related Loan File, Property File and Servicing File, as
applicable.
11
(b) If the
Seller defaults on its obligations to substitute any Breaching Asset in
accordance with Section 7(a) or
disputes its obligation to cure or to exchange the affected Assets in accordance
with such subsection, the Purchaser or its successors and assigns may take such
action as is appropriate to enforce such payment or performance, including,
without limitation, the institution and prosecution of appropriate
proceedings. To the extent the Purchaser or its successors and
assigns prevail in such proceeding, the Seller shall reimburse the Purchaser or
its successors and assigns, as applicable, for all necessary and reasonable
costs and expenses incurred in connection with the enforcement of such
obligation of the Seller to cure or substitute the Breaching Asset in accordance
with this Section
7.
(c) At all
times during the Substitution Period, the Seller shall maintain a list of at
least $25,000,000 in Carrying Value of Offered Assets, excluding Breaching
Assets, by updating the list of Offered Assets in Exhibit
A. Initially, such list will consist of the Offered Assets not
purchased by the Purchasers, excluding Breaching Assets.
SECTION 8. Initial Deposit; Payment of
Purchase Price; UCB Breaches; Liquidated Damages.
(a) On
or about April 1,
2010 (but in no event later than April 5, 2010), Fletcher, on behalf of itself
and the Purchasers, shall remit $10 million (the “Deposit”) to the
Seller by wire transfer of immediately available funds to an interest-bearing
savings account specified in writing by the Seller (the “Deposit Account”),
which funds shall be held by the Seller in trust in accordance with the terms
and conditions of this Section
8.
(b)
Interest
earned on the Deposit shall be for the account of Fletcher and the Purchasers
and shall be distributed at the direction of Fletcher.
(c)
On each
Closing Date, to the extent of funds on deposit in the Deposit Account, the
Seller shall apply 10% of the aggregate Purchase Price of the Assets
purchased on such Closing Date from the Deposit Account toward the aggregate
Purchase Price payable to the Seller on such Closing Date. The
remainder of the aggregate Purchase Price payable by a Purchaser on such Closing
Date shall be funded (i) using funds to be advanced to such Purchaser pursuant
to (and subject to the fulfillment of the conditions precedent to such funding
specified in Article IV of) the Loan Agreement entered into by such Purchaser
and the Lender in an amount equal to 80% of the aggregate Purchase Price, and
(ii) after giving effect to the credit of funds in the Deposit Account (if any)
described above and the funds to be advanced to such Purchaser pursuant to the
Loan Agreement as described in clause (i), using
funds available to the Purchaser from other sources other than amounts on
deposit in such Purchaser’s Carry Account; provided, however, that with
respect to a Substitution pursuant to Section 7, the
Purchase Price shall be deemed paid by the substitution of the Breaching Asset
with the exchanged Offered Asset. Upon the occurrence of any of the
following events (each, a “UCB
Breach”):
12
(i)
any
Closing contemplated by this Purchase Agreement cannot be completed due to (A) a
material failure by United Community Bank in the performance of its
obligations as Seller under this Purchase Agreement which is not cured within 10
days, (B) a failure by United Community Bank to execute a Loan Agreement in
substantially the form attached to this Purchase Agreement as Exhibit J or such
other form as may be reasonably acceptable to United Community Bank and the
related Purchaser, (C) a material failure of United Community Bank in the
performance of its obligations under any Loan Agreement (assuming the applicable
Purchaser has fulfilled all of its obligations precedent to such performance
under such Loan Agreement), (D) the failure of United Community Bank to enter
into a Servicing Agreement in substantially the form attached to this Purchase
Agreement as Exhibit
G or such other form as may be reasonably acceptable to United Community
Bank and the related Purchaser or (E) a directive issued by the FDIC or any
other regulatory authority;
(ii)
the
appointment of, or the consent by United Community Bank to the appointment of, a
receiver with respect to it or with respect to any substantial part of its
property;
(iii) a final
adjudication of an act by United Community Bank that constitutes fraud or
criminal activity in the performance of its activities with respect to this
Purchase Agreement;
or if any
Closing does not occur before the termination of this Purchase Agreement
pursuant to Section
9(d) for any reason other than a failure on the part of the Purchaser to
fulfill its purchase obligation under this Purchase Agreement and the related
Bill of Sale by such date, all amounts remaining on deposit in the Deposit
Account shall immediately be released to the Purchasers at the direction of
Fletcher, and the Purchasers shall have no further obligations to complete any
further Closings. In the absence of any such events, the Seller shall
be, and hereby is, authorized to retain any funds remaining on deposit in the
Deposit Account after termination of this Purchase Agreement pursuant to Section
9(d). The parties expressly acknowledge that it would be
impractical and extremely difficult to estimate the actual damages the Seller
would suffer if the Purchasers failed to satisfy their purchase obligations and
that the retention of the remaining Deposit is intended not as a penalty, but as
the sole and exclusive remedy (whether at law or in equity) for the Seller’s
lost opportunities and other costs, expenses and damages in connection with this
Purchase Agreement.
13
SECTION 9. Closing; Conditions
Precedent; Termination.
(a)
Each
Closing shall be held at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, Four Times Square, New York, New York 10036 at 10:00 a.m., New York City
time, on April 30, 2010, or, with respect to any Offered Assets selected for
purchase pursuant to Section 2(a) that are
not purchased on such date for any reason, on such later date that is three
Business Days following the satisfaction of the conditions set forth in clause (b) or (c) below (other than
conditions that by their nature are to be satisfied at Closing), or on such
other date or in such other manner as shall be mutually agreed upon in writing
by the Seller and the related Purchaser; provided, however, that Closings may be
delayed in the circumstances contemplated in Section 2 and Substitutions may be effected as contemplated by
Sections 2 and 8. On the related Closing Date, the Seller and
the related Purchaser shall execute and deliver to each party a Bill of Sale for
the related Closing.
(b)
The
obligation of the applicable Purchaser to consummate each Closing shall be
subject to, with respect to the Offered Assets to be purchased at such Closing,
each of the following conditions precedent except to the extent such conditions
are waived in writing by the applicable Purchaser in its sole
discretion:
(i)
All of
the representations and warranties of the Seller specified in this Purchase
Agreement shall be true and correct in all material respects as of the related
Closing Date;
(ii)
All
documents and opinions specified in Section 10 (the
Closing Documents) to be delivered by the Seller on the related Closing
Date shall be duly executed and delivered by all signatories as required
pursuant to the respective terms thereof;
(iii) With
respect to any REO Property which is a residential property to be sold in such
Closing, the Seller and the related Purchaser shall have executed a Disclosure
of Information on Lead-Based Paint and Lead Hazards for REO Properties, in the
form of Exhibit
F attached hereto;
(iv) No UCB
Breach shall have occurred;
(v)
The
Seller shall have delivered and released to the Purchaser or the Purchaser’s
designee, as the case may be, all documents required to be so delivered pursuant
to Section 2 on
the related Closing Date;
14
(vi) All other
terms and conditions of this Purchase Agreement and the related Bill of Sale
required to be complied with by the Seller on or before the related Closing Date
shall have been complied with, and the Seller 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 the related Closing Date; and
(vii) The
Purchaser shall be satisfied that all of the conditions precedent described
above have been satisfied.
(c)
The
obligation of the Seller to consummate each Closing shall be subject to, with
respect to the Offered Assets to be purchased at such Closing, each of the
following conditions precedent except to the extent such conditions precedent
are waived in writing by the Seller in its sole discretion:
(i)
All of
the representations and warranties of Fletcher and the applicable Purchaser
specified in this Purchase Agreement or in the related Joinder shall be true and
correct in all material respects as of the related Closing Date;
(ii) All
documents specified in Section 10 (the
Closing Documents) to be delivered by the applicable Purchaser on the
related Closing Date shall be duly executed and delivered by all signatories as
required pursuant to the respective terms thereof;
(iii) All other
terms and conditions of this Purchase Agreement and the related Bill of Sale
required to be complied with by the applicable Purchaser on or before the
related Closing Date shall have been complied with, and the applicable 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 the
related Closing Date;
(iv) The
payment (or deemed payment) of the aggregate Purchase Price in accordance with
Section 8(c) of
this Purchase Agreement shall have been received (or deemed received) (including
the payment by the applicable Purchaser of 10% of such Purchase Price that is
not credited from the Deposit or funded by a loan under a Loan Agreement);
and
(v)
The
Seller shall be satisfied that all of the conditions precedent described above
have been satisfied.
15
(d)
This
Purchase Agreement may be terminated at any time prior to the consummation of
all Closings with respect to any future Closings by either Fletcher or the
Seller upon written notice to the other at any time after May 31, 2010;
provided, however, that such right to terminate shall not be available to such
party if the failure of any Closing to occur by such date is the result of one
or more breaches or violations of, or inaccuracy in any covenant, agreement,
representation or warranty of this Purchase Agreement by such party (other than,
with respect to any Offered Asset, a breach of any representation or warranty
set forth in Exhibits
C-1, C-2
or C-3, as
applicable). Notwithstanding the foregoing, all representations,
warranties, covenants and agreements in this Purchase Agreement and any Bill of
Sale as they may relate to any consummated Closing shall survive the termination
of this Purchase Agreement except to the extent expressly provided otherwise
herein.
SECTION 10. Closing
Documents.
The
“Closing
Documents” to be delivered on each Closing Date shall consist of the
following:
(a)
This
Purchase Agreement duly executed and delivered by the Seller and Fletcher, with
a Joinder to the Purchase Agreement duly executed and delivered by the related
Purchaser;
(b)
A
Servicing Agreement, duly executed and delivered by the related Purchaser and
the Servicer;
(c)
A Loan
Agreement, together with any other Loan Documents (as such term in defined in
the Loan Agreement) specified in Section 4.01 of such Loan Agreement, duly
executed and delivered by the Lender and the related Purchaser, as
applicable;
(d)
A
certificate of good standing from the Secretary of State of the State of Georgia
with respect to the Seller;
(e)
All
Assignments of Leases, Rents and Profits, if any, together with an assignment
thereof duly executed by the Seller, assigning to Purchaser all of the Seller’s
right, title and interest therein;
(f)
A
certificate of the Seller substantially in the form of Exhibit H
hereto, executed by an executive officer or authorized signatory of the Seller
and dated the Closing Date, and upon which the Purchaser may rely;
(g)
A written
opinion of counsel for the Seller, opining on issues described
in Exhibit
I and subject to such reasonable assumptions and qualifications as may be
requested by counsel for the Seller and acceptable to counsel for the Purchaser,
dated the applicable Closing Date and addressed to the Purchaser and to
Fletcher;
(h)
With
respect to any REO Properties, the final settlement statement agreed upon in
writing pursuant to Section 12(f);
and
16
(i)
Such
other certificates and documents as the Purchaser may reasonably
request.
SECTION 11. Post-Closing
Activities.
(a)
As soon
as reasonably practicable after the Closing Date:
(i)
Each
related Purchaser and the Seller shall (A) with respect to Assets in litigation
(including foreclosure), to the extent necessary or advisable, file appropriate
pleadings with the court that will substitute Purchaser’s attorney for Seller’s
attorney, and remove Seller as a party to the litigation and substitute
Purchaser as the real party in interest; and (B) with respect to Mortgage Loans
with respect to which the related mortgagor is in bankruptcy, mail to each of
the Seller’s bankruptcy attorney, the Seller’s foreclosure attorney, the
mortgagor’s attorney and the bankruptcy trustee a letter advising such attorney
that the Seller has sold the Mortgage Loan on the related Closing Date to the
related Purchaser.
(ii)
Each
related Purchaser and the Seller shall file or cause to be filed, as and when
required by law, all IRS forms 1099, 1099A, 1098 or 1041 and K-1 in relation to
the ownership of the Mortgage Loans for the portion of such year the Mortgage
Loans were owned by the Seller.
(b)
Not later
than the first anniversary of the Closing Date, the Seller shall deliver to the
related Purchaser a statement setting forth any corrections to the amounts
payable by the Seller or the related Purchaser with respect to the Assets but
not included in the amounts referred to in Section 12, together
with the documentation relating to such corrections.
(c)
At any
time, and from time to time after the related Closing Date, upon the reasonable
request of a party hereto, and at the expense of such party, the other party
shall do, execute, acknowledge and deliver, and shall cause to be done,
executed, acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may be reasonably
required in order to better assign, transfer, grant, convey, assure and confirm
to Purchaser, and to collect any or all of the Mortgage Loans, manage the REO
Properties or document its ownership to each of the REO Properties as provided
for herein or to effectuate the purpose and carry out the terms of this Purchase
Agreement.
SECTION 12. Other
Expenses.
(a)
Each
party will pay its own expenses (including the fees and expenses of its
attorneys) in connection with the negotiations for, documenting of and closing
of the transactions contemplated by this Purchase Agreement.
17
(b)
In
connection with the transfer of any Mortgage Loan registered with MERS, the
Seller shall, at its own expense, cause the MERS System to indicate that such
Mortgage Loan has been assigned to Purchaser.
(c)
With
respect to each REO Property, the Seller shall pay all real estate transfer
taxes, sales taxes or similar taxes, license and permit assignment fees,
assessments, levies, deductions, fees, withholdings or charges of whatever
nature in connection with the transfer of the REO Property to the
Purchaser.
(d)
The
Seller acknowledges its liability for all real estate taxes, ad valorem taxes,
street vault taxes, personal property taxes and other taxes, assessments and
charges, other municipal and state charges, license and permit fees, water and
sewer rents and all other charges affecting the REO Properties, and any interest
and penalties due thereon (collectively, the “Taxes”) through the
related Closing Date only, whether or not such Taxes are (i) due and payable as
of the related Closing Date, (ii) delinquent as of the related Closing Date or
(iii) billed as of the related Closing Date. The Purchaser shall be
liable for all Taxes on the REO Properties accruing after the related Closing
Date. Taxes paid by the Seller prior to the related Closing Date with
respect to periods that extend beyond the related Closing Date shall be prorated
and adjusted as of the related Closing Date as set forth below.
(e)
With
respect to the REO Properties, the following items for which the Seller has
received notice by the related Closing Date (including any such charges on bills
that relate to all periods prior to the related Closing Date, without regard to
when such costs shall become due and payable), are to be paid by the Seller
through and including the related Closing Date: (i) utilities (including,
without limitation, telephone service, heat, steam, electric power, cable, and
trash removal, fuel, water, water frontage charges and/or meter charges), (ii)
sewer and sanitary charges and taxes thereon, (iii) amounts prepaid or payable
pursuant to the insurance premiums, management or brokerage agreements, service,
supply, security, maintenance or similar agreements, (iv) condominium,
cooperative and home owner association fees, assessments, maintenance and common
charges or (v) any other similar fees or expenses in connection with the
servicing of the REO Properties. The Purchaser shall be responsible
for and shall pay any such charges on bills that relate to all periods after the
related Closing Date, regardless of when such items are due and
payable.
(f)
Upon the
related Closing Date, the items set forth in Sections 12(c), (d) and (e) above,
together with all rents and other payments actually received by the Seller under
the terms of any lease for the month of the Closing, shall be apportioned
between the Seller and the related Purchaser on the basis of a settlement
statement approved in writing by the Seller and the Purchaser. Not
later than five Business Days prior to the related Closing Date, the Seller
shall deliver to such Purchaser a draft settlement statement which shall contain
a list of the items to be apportioned in accordance with Sections 12(c), (d) and (e). Not
later than three Business Days prior to the Closing Date, the Purchaser shall
deliver to the Seller a written statement of objection or agreement to such
settlement statement. If the Purchaser objects to any portion of the
settlement statement, the Seller and the Purchaser shall, reasonably and in good
faith, negotiate and agree upon a final settlement statement. All
other costs, fees and income related to an REO Property shall, unless otherwise
specifically allocated in this Purchase Agreement, be allocated in accordance
with customary practice for properties similar to the REO Property located in
the county in which the REO Property is located.
18
(g)
With
respect to any Asset, the obligations of the Seller and the Purchaser pursuant
to this Section 12
shall survive for a period of 395 days after the related Closing Date,
during which period Seller and Purchaser shall agree on a reconciliation of the
apportionments described herein, if necessary.
SECTION 13. Indemnification.
(a)
The
Seller shall indemnify and hold harmless the Purchaser and its successors and
assigns, from and against any loss, liability, expense, claim, damage or injury
(“Damages”)
suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of any representations and warranties being untrue or
incorrect at the time any such representation or warranty was made, or arising
out of or based on the arrangement created by this Purchase Agreement and the
activities of the Seller taken pursuant hereto, including any judgment, award,
settlement, reasonable attorneys, fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim; provided, however, that the
Seller shall not indemnify the Purchaser or its successors and assigns if such
acts, omissions or alleged acts or omissions constitute fraud, willful
misfeasance, bad faith or gross negligence by the Purchaser or were taken at the
direction of or with the consent of the Purchaser. Any
indemnification under this Section 13 shall
survive the termination of this Purchase Agreement for a period of five years;
provided, however, that any
indemnification under this Section 13 with
respect to breaches of Extended Representations and Warranties shall survive
indefinitely, subject to applicable statutes of limitations; and provided, further, that, with
respect to each Asset purchased by a Purchaser hereunder, any indemnification
related thereto under this Section 13 with
respect to breaches of representations and warranties set forth on Exhibits C-1, C-2 or C-3, other than
Extended Representations and Warranties, shall survive the termination of this
Purchase Agreement until the date that is the six (6) month anniversary of the
date such Asset is sold, transferred or otherwise conveyed to a third party, or,
if it is a Mortgage Loan, repaid in full.
(b)
The
Seller shall not have any indemnification obligation under Section 13(a) unless
and until the aggregate amount of Damages incurred by all Purchasers or their
respective successors or assigns in respect of all such acts, omissions or
alleged act or omissions exceeds $1,000,000, whereupon the Purchaser or its
successors or assigns shall be entitled to recover all such Damages to the
extent the aggregate amount of Damages incurred by all Purchasers and their
respective successors or assigns exceeds $1,000,000.
19
(c)
Notwithstanding
anything to the contrary contained in this Purchase Agreement, the Seller shall
not be liable or otherwise responsible for consequential, incidental, special,
indirect, exemplary or punitive damages or for any diminution in value of the
Assets.
(d)
Conduct
of Third Party Claims.
(i)
Whenever
a claim for indemnification shall arise under this Section 13 as a
result of a third-party claim, the party seeking indemnification (the “Indemnified Party”),
shall notify the party from whom such indemnification is sought (the “Indemnifying Party”)
in writing of claim and the facts constituting the basis for such claim in
reasonable detail;
(ii)
Such
Indemnifying Party shall have the right to retain the counsel of its choice in
connection with such claim and to participate at its own expense in the defense
of any such claim; provided, however, that counsel
to the Indemnifying Party shall not (except with the consent of the relevant
Indemnified Party) also be counsel to such Indemnified Party. In no
event shall the Indemnifying Party be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from its own counsel for
all Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. Notwithstanding anything to the
contrary in the foregoing, (A) if defendants in any action include any
Indemnified Party and any Indemnifying Party, and any Indemnified Party shall
have been advised by its counsel that there may be material legal defenses
available to such Indemnified Party inconsistent with those available to the
Indemnifying Party, the Indemnified Party shall have the right to employ its own
counsel in such action, and in such case the fees and expenses of the
Indemnified Party’s counsel shall be borne by such Indemnified Party and (B) if
a conflict of interest exists between any Indemnified Party and any such
Indemnifying Party with respect to such claim or the defense thereof, the
Indemnified Party shall have the right to employ its own counsel in such action,
and in such case the fees and expenses of the Indemnified Party’s counsel shall
be borne by the Indemnifying Party; and
(iii)
No
Indemnifying Party shall, without the prior written consent of the Indemnified
Parties (which consent shall not be unreasonably withheld), settle or compromise
or consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification could be
sought under this Section 13 unless
such settlement, compromise or consent (A) includes an unconditional release of
each Indemnified Party from all liability arising out of such litigation,
investigation, proceeding or claim and (B) does not include a statement as to or
an admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Party.
20
SECTION 14. Notices.
All
demands, notices and communications hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered to or mailed, by
certified mail, postage prepaid, by overnight mail or courier service, or
transmitted by facsimile and confirmed by a similar mailed writing as
follows:
If to
Fletcher, to:
Fletcher
International, Inc.
48 Wall
Street
5th
Floor
New York,
NY 10005-2911
Telephone:
( (212) 284-4800
Fax:
(212) 284-4801
Attention: Denis
Kiely
or such
other address or facsimile number as may hereafter be furnished to the Seller in
writing by Fletcher.
If to the
Seller, to:
United
Community Bank
Attn: David
Shearrow
125
Highway 515 East
Blairsville,
GA 30514
Telephone: (706)
781-2265
Fax: (706)
781-6713
with a
copy to:
Kilpatrick
Stockton LLP
1100
Peachtree Street
Suite
2800
Atlanta,
GA 30309
Attn: James
W. Stevens
Telephone: (404)
815-6500
Fax: (404)
541-3400
21
or to
such other address or facsimile number as the Seller may designate in writing to
Fletcher and to each Purchaser.
If to a
Purchaser, to the address and facsimile number designated in its Joinder or to
such other address or facsimile numbers as the Purchaser may designate in
writing to the Seller.
SECTION 15. Representations, Warranties
and Agreements to Survive Delivery.
All
representations, warranties and agreements contained in this Purchase Agreement,
incorporated herein by reference or contained in the certificates of officers of
the Seller submitted pursuant hereto, shall remain operative and in full force
and effect and shall survive delivery of the Assets by the Seller to the
Purchaser or its designee for a period of five years beyond the applicable
Closing Date, other than (i) Extended Representations and Warranties, which
shall survive indefinitely, subject to applicable statutes of limitations, and
(ii) representations and warranties set forth on Exhibits C-1, C-2 or C-3, other than
Extended Representations and Warranties, shall survive the termination of this
Purchase Agreement until the date that is the six (6) month anniversary of the
date such Asset is sold, transferred or otherwise conveyed to a third party, or,
if it is a Mortgage Loan, repaid.
SECTION 16. Severability of
Provisions.
Any part,
provision, representation, warranty or covenant of this Purchase Agreement that
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation,
warranty or covenant of this Purchase Agreement that is prohibited or
unenforceable or is held to be void or unenforceable in any particular
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
particular jurisdiction 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.
SECTION
17. Rights Cumulative;
Waivers.
The
rights of each of the parties under this Purchase Agreement are cumulative and
may be exercised as often as any party considers appropriate. The
rights of each of the parties hereunder shall not be capable of being waived or
varied otherwise than by an express waiver or variation in
writing. Any failure to exercise or any delay in exercising any of
such rights shall not operate as a waiver or variation of that or any other such
right.
22
SECTION 18. Headings.
The
headings of the Sections contained in this Purchase Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Purchase Agreement or any provision hereof.
SECTION 19. Counterparts.
The
parties may execute and deliver this Purchase Agreement as a single document or
in any number of counterparts, manually, by facsimile or by other electronic
means, including contemporaneous xerographic or electronic reproduction by each
party’s respective attorneys. Each counterpart shall be an original,
but a single document or all counterparts together shall constitute one
instrument that shall be the agreement.
SECTION 20. Entire Agreement; Separation
of Agreements.
This
Purchase Agreement (including the Appendix and the Exhibits attached to this
Purchase Agreement) constitutes the entire agreement among the parties with
respect to the subject matter of this Purchase Agreement and supersede all prior
agreements, representations and understandings related to such subject
matters. The parties acknowledge and agree that this Purchase
Agreement and the Securities Purchase Agreement are wholly separate and distinct
agreements that are supported by separate
consideration. Notwithstanding anything to the contrary contained
herein or in the Securities Purchase Agreement, the parties’ obligations under
this Purchase Agreement are separate and distinct from the parties’
obligations under the Securities Purchase Agreement. Accordingly,
breach by any party of any of the provisions of this Purchase
Agreement shall not excuse performance by, or provide the basis for any remedy
for, any party under the Securities Purchase Agreement. Likewise,
breach by either party of any of the provisions of the Securities
Purchase Agreement shall not excuse performance by, or provide the basis for any
remedy for, any party under this Purchase Agreement.
SECTION 21. GOVERNING
LAW.
THIS
PURCHASE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK, AND EACH OF THE PARTIES HERETO HEREBY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN NEW YORK
CITY, NEW YORK AND ANY COURT HEARING ANY APPEAL THEREFROM, OVER ANY SUIT, ACTION
OR PROCEEDING AGAINST IT ARISING OUT OF OR BASED UPON THIS PURCHASE AGREEMENT (A
“RELATED
PROCEEDING”). EACH OF THE PARTIES HERETO HEREBY WAIVES ANY
OBJECTION TO ANY RELATED PROCEEDING IN SUCH COURTS WHETHER ON THE GROUNDS OF
VENUE, RESIDENCE OR DOMICILE OR ON THE GROUND THAT THE RELATED PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
The
Seller and the Purchasers agree to execute and deliver such instruments and take
such further actions as the other party may, from time to time, reasonably
request in order to effectuate the purposes and to carry out the terms of this
Purchase Agreement.
SECTION 23. Successors and
Assigns.
This
Purchase Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns and, with respect to Section 13, will
inure to the benefit of their respective officers, directors, employees,
consultants, agents, attorneys, accountants and affiliates and each Person that
controls (within the meaning of Section 20 of the Securities Exchange Act of
1934, as amended) any of the foregoing Persons, and no other Person will have
any right or obligation hereunder. The rights and obligations of the
Seller and a Purchaser under this Purchase Agreement shall not be assigned by
either such party without the prior written consent of the other such party,
which consent shall not be unreasonably withheld, conditioned or delayed, except
that (a) any person into which the Seller may be merged or consolidated, or any
corporation or other entity resulting from any merger, conversion or
consolidation to which the Seller is a party, or any person succeeding to all or
substantially all of the business of the Seller, shall be the successor to the
Seller hereunder and (b) any person into which a Purchaser may be merged or
consolidated, or any corporation or other entity resulting from any merger,
conversion or consolidation to which such Purchaser is a party, or any person
succeeding to all or substantially all of the business of such Purchaser, shall
be the successor to such Purchaser hereunder. Notwithstanding the
foregoing, the Purchaser may, in whole or in part, in its sole discretion (i)
assign, pledge, hypothecate or transfer this Purchase Agreement or any of the
rights and associated obligations contemplated by this Purchase Agreement to any
other Purchaser or any Fletcher affiliates, parallel investment funds,
co-investment funds or successor investment funds of the Purchaser, and (ii)
pledge or hypothecate any of the rights and associated obligations contemplated
by this Purchase Agreement in connection with financing, derivative or hedging
transactions with respect to this Purchase Agreement, provided, that, any such
assignment, pledge, hypothecation or transfer must comply with applicable
federal and state securities laws. Except as provided in this Section 23, this
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.
SECTION 24. Amendments.
This
Agreement may be amended, modified or supplemented in any and all respects, but
only by a written instrument signed by a duly authorized officer of the party
against whom such amendment, waiver, modification or alteration is sought to be
enforced expressly stating that such instrument is intended to amend, modify or
supplement this Agreement.
24
SECTION 25. Reports of the
Seller.
The
Seller and the Servicer shall cooperate with and, upon request, provide to the
Purchaser or to the then current owner such information as may be reasonably
necessary to prepare or cause to be prepared any tax returns that may be
required by applicable federal, state and local law.
SECTION 26. Confidentiality
Prior
to consummation of all of the transactions contemplated by this Purchase
Agreement, the parties to this Purchase Agreement will provide one another with
information which may be deemed by the party providing the information to be
confidential. Each party agrees that it will hold confidential and
protect all information provided to it by the other party to this Purchase
Agreement or such party’s affiliates, except that the obligations contained in
this Section 26
shall not in any way restrict the rights of any party or person to use
information that: (a) was known to such party prior to the disclosure
by the other party; (b) is or becomes generally available to the public other
than by breach of this Purchase Agreement; (c) otherwise becomes lawfully
available to a party to this Purchase Agreement on a non-confidential basis from
a third party who is not under an obligation of confidence to the other party to
this Purchase Agreement or (d) was independently developed by such party without
use of such information, as shown by such party’s files and records or other
evidence in such party’s possession. Notwithstanding the foregoing, a party may
disclose any of such information to directors, officers, employees, agents,
advisors (including legal counsel and accountants) and to its representatives or
representatives of its affiliates, who in each case need to know such
information and who in each case have been informed by the undersigned of the
confidential nature of such information.
If a
party is required by applicable law, regulation, rule or order issued by any
administrative, governmental, regulatory, judicial or stock exchange authority,
or in response to a request from such party’s auditors, to disclose any portion
of such information, the party may disclose such information. If this
Purchase Agreement is terminated, upon request each party hereto agrees to
return or destroy all documents, statements and other written materials, whether
or not confidential, and all copies thereof, provided to it by or on behalf of
the other party to this Agreement except to the extent that such party is
required by law, regulation, internal procedure or court order to retain such
information and such related documents for audit or regulatory
purposes. The provisions of this Section 26 shall
survive termination, for any reason whatsoever, of this Purchase Agreement for
twelve (12) months or until such earlier time as all such information becomes
publicly known and made generally available through no action or inaction of
such party in violation of this Purchase Agreement, and, without limiting the
remedies of the parties hereto in the event of any breach of this Section 26, the
parties hereto will be entitled to seek injunctive relief against the other
party in the event of a breach or threatened breach of this Section
26.
25
SECTION 27. Press
Releases
Prior to
consummation of all of the transactions contemplated by this Purchase Agreement,
the parties to this Purchase Agreement shall each approve the form and substance
of any press release or other public disclosure materially related to this
Purchase Agreement or any other transaction contemplated hereby; provided, however, that nothing
in this Section
27 shall be deemed to prohibit any party from making any disclosure which
its counsel deems necessary or advisable in order to satisfy such party’s
disclosure obligations imposed by law.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
26
IN
WITNESS WHEREOF, the Seller and Fletcher have caused their names to be signed
hereto by their respective duly authorized officers as of the date first above
written.
|
UNITED COMMUNITY
BANK
as Seller
|
|||
|
|
By:
|
/s/ Rex S. Schuette | |
| Name: Rex S. Schuette | |||
| Title: Executive Vice President & Chief Financial Officer | |||
|
FLETCHER INTERNATIONAL,
INC.,
by its duly
authorized investment advisor,
FLETCHER ASSET
MANAGEMENT, INC.
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|||
|
|
By:
|
/s/ Moez M. Kaba | |
| Name: Moez M. Kaba | |||
| Title: Authorized Signatory | |||
|
|
By:
|
/s Denis J. Kiely
|
|
| Name: Denis J. Kiely | |||
| Title: Director | |||
USAGE
AND SUPPLEMENTAL DEFINITIONS
Usage
The
following rules of construction and usage apply to this Appendix, any agreement
that incorporates this Appendix and any document made or delivered pursuant to
any such agreement:
(a) The term
“documents” includes any and all documents, agreements, instruments,
certificates, notices, reports, statements or other writings however evidenced,
whether in electronic or physical form.
(b) Accounting
terms not defined or not completely defined in this Appendix will be construed
in conformity with GAAP as in effect on the date of the document that
incorporates this Appendix.
(c) References
to “Section,” “Exhibit,” “Schedule” or another subdivision of or to an
attachment are, unless otherwise specified, to an article, section, exhibit,
schedule or subdivision of or an attachment to the document in which such
reference appears.
(d) Any
document defined or referred to in this Appendix or in any document that
incorporates this Appendix means such document as from time to time amended,
modified, supplemented or replaced, including by waiver or consent, and includes
all attachments to and instruments incorporated in such document.
(e) Any
statute defined or referred to in this Appendix or in any document that
incorporates this Appendix means such statute as from time to time amended,
modified, supplemented or replaced, including by succession of comparable
successor statutes, and includes any rules and regulations promulgated under
such statute and any judicial and administrative interpretations of such
statute.
(f) Calculation
of any amount on or as of any date will be determined at or as of the close of
business on such day after the application of any monies, payments and other
transactions to be applied on such day, except that calculations as of the
Cut-off Date will be determined as of the close of business on the day
immediately prior thereto after the application of any monies, payments and
other transactions to be applied on such day.
(g) In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including,” the word “to” means “to but
excluding” and the word “through” means “to and including.”
(h) All terms
defined in this Appendix apply to the singular and plural forms of such terms
and the term “including” means “including without limitation.”
(i) References
to a Person are also to its permitted successors and assigns.
Appendix
A – 1
Supplemental
Definitions
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, have the following meanings:
“Acceptable Insurer”:
An insurance company which has a claims-paying ability rated at least “A-” by
Fitch, Inc., at least “A2” by Moody’s Investors Service, Inc. or at least “A” by
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc.
“Accepted Servicing
Practices” has the meaning specified in Section 1 of the
Servicing Agreement.
“Affiliate”: With
respect to any specified Person, any other Person that directly, or indirectly
through one or more intermediaries, controls or is controlled by or under common
control or ownership with such specified Person. For the purposes of
this definition, “control” when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract,
relation to individuals or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.
“ALTA”: The
American Land Title Association or any successor thereto.
“Appraisal”: A
narrative appraisal conducted by a Qualified Appraiser.
“Appraisal Performance
Event”: With respect to any Mortgage Loan, the occurrence of
any of:
(a)
a modification of the terms of such Mortgage Loan which changes the Mortgage
Interest Rate or Mortgage Note Principal Balance (including the accrued and
unpaid interest thereon) or reduces the monthly payment or alters or introduces
any principal amortization feature or extends the term of the Mortgage
Loan,
(b) the
related Mortgagor becoming the subject of a bankruptcy, insolvency or similar
proceeding which, if brought by a third party, is not dismissed within 60 days
or a receiver, conservator or trustee being appointed for the Mortgaged Property
and such appointment continues for 60 days, or
(c) the
related Mortgaged Property becoming REO Property.
“Appraised
Value”: With respect to any Mortgage Loan, the value of the
related Mortgaged Property based upon the most recent appraisal
made.
Appendix
A – 2
“Asset
List”: The list of Assets sold pursuant to the Purchase
Agreement and a Bill of Sale, which shall be prepared by the Seller and attached
as Schedule A
to such Bill of Sale, and which shall set forth, as of the end of the
Business Day immediately prior to the date of the Bill of Sale (unless the
information is expressly stated to be as of the Cut-off Date, in which case, as
of such Cut-off Date) the following information:
(a)
with respect to each Mortgage Loan (if
any):
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(1)
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the
Mortgage Loan identifying number;
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(2)
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the
MERS#, if applicable;
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(3)
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the
Mortgagor’s
name;
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(4)
|
the
street address of the Mortgaged Property, including the unit number, if
any, and the city, state and zip code or other description of the
Mortgaged Property’s location (exact
address);
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(5)
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if
a residential mortgage, a code indicating whether or not the Mortgagor
indicated in his loan application that the Mortgaged Property is
owner-occupied and whether it is the primary residence of the Mortgagor
(to the extent such information is known to the Seller) (property type,
loan type and purpose code
description);
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(6)
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if
a residential mortgage, the private mortgage insurance coverage and name
of insurer, if any;
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(7)
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if
a residential dwelling, a code indicating the type of residential dwelling
constituting the Mortgaged Property (to the extent such information is
known to the Seller) (purpose code
description);
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(8)
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the
property type (purpose code
description);
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(9)
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the
existence of any Ground Leases;
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(10)
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the
maturity date;
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(11)
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the
Mortgage Interest Rate in effect on the Cut-off
Date;
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(12)
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the
date of origination or renewal of the Mortgage
Loan;
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(13)
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the
current payment amount due as of the Cut-off
Date;
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(14)
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the
last payment date and last amount received on which a contractual payment
was actually applied to interest or to the principal balance of the
Mortgage Loan;
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Appendix
A – 3
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(15)
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the
original principal balance (note amount) of each Mortgage
Loan;
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(16)
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the
principal balance of the Mortgage Loan (including any accrued and unpaid
interest thereon) as of the close of business on the Cut-off Date (current
payment amount due);
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(17)
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the
contractual delinquency of the Mortgage Loan (0-29 days; 30 to 59 days; 60
to 89 days) as of the Cut-off Date;
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(18)
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a
code indicating whether the Mortgagor is in
bankruptcy;
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(19)
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a
code indicating whether the Mortgage is in foreclosure;
and
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(20)
|
the
dollar amount of any delinquency in respect of principal and interest as
of the Cut-off Date (amount is included in current payment amount
due);
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(b) with
respect to each pool of Mortgage Loans (if any) in the aggregate, (1) the number
of Mortgage Loans; (2) the weighted average maturity of the Mortgage Loans, (3)
the weighted average Mortgage Interest Rate of the Mortgage Loans and (4) the
aggregate Carrying Value of the Mortgage Loans;.
(c) with
respect to each REO Property (if any),
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(1)
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the
REO Property identifying number;
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(2)
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the
street address of the REO Property, including the unit number, if any, and
the city, state and zip code or other description of the REO Property’s
location;
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(3)
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the
legal address of the REO Property;
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(4)
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property
type;
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(5)
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occupancy
status; and
|
(d) with
respect to the REO Properties (if any) in the aggregate, the aggregate Carrying
Value of such REO Properties.
“Assets”: The
Mortgage Loans and REO Properties that are sold to the Purchasers pursuant to
the Purchase Agreement and which, with respect to each Closing, are identified
in a schedule to a Bill of Sale, together with any related property, including
the related Loan Files, Property Files and Servicing Files.
Appendix
A – 4
“Assignment of Leases, Rents
and Profits”: With respect to any Mortgaged Property, any assignment of
leases, rents and profits or similar agreement executed by the Mortgagor,
assigning to the mortgagee all of the income, rents and profits derived from the
ownership, operation, leasing or disposition of all or a portion of such
Mortgaged Property, in the form which was duly executed, acknowledged and
delivered, as amended, modified, renewed or extended through the date hereof and
from time to time hereafter.
“Breaching
Asset”: An Asset or Offered Asset that is in breach of any
representation or warranty set forth in Exhibits C-1, C-2 or C-3, as applicable
(which representations and warranties for purposes of this definition shall be
deemed to have been made without regard to any qualification of knowledge or
actual knowledge by the Seller).
“Business
Day”: Any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in the New York, New York or the
State of Georgia are authorized or obligated by law, regulation or executive
order to close.
“Carry
Account”: With respect to a Purchaser, the meaning set forth
in such Purchaser’s Loan Agreement.
“Carrying
Value”: With respect to an asset, the Seller’s carrying value
thereof as of the Cut-off Date as determined in accordance with GAAP
consistently applied, all as mutually agreed by the Seller and the Purchaser,
net of any payments applied to principal after the Cut-off Date (payments
received with respect to any Asset shall first be applied to accrued and unpaid
interest on the related Mortgage Note and then applied to principal thereof
unless such asset is a non-performing mortgage loan, in which case payments
received shall first be applied to principal in accordance with GAAP
consistently applied).
“Closing”: The
payment (or deemed payment) of the related Purchase Price and conveyance of the
related Assets as evidenced in a Bill of Sale.
“Closing
Date”: With respect to any Closing or Substitution, the
effective date of such Closing, or with respect to any Substitution, the
effective date of such Substitution.
“Closing
Documents”: The meaning specified in Section 10 of the
Purchase Agreement.
“Collection
Account”: The securities or deposit account established by a
Purchaser for the receipt of collections and the net proceeds of dispositions or
events of loss with respect to such Purchaser’s Assets.
“Collections”: The
meaning specified in Section 2(b) of Exhibit
G.
“Condemnation
Proceeds”: All proceeds paid or awarded in connection with the
full or partial condemnation of, or exercise of eminent domain with respect to,
a Mortgaged Property, to the extent such proceeds are not applied to the
restoration or repair of the related Mortgaged Property or released to the
Mortgagor or any tenants or ground lessors.
Appendix
A – 5
“Cut-off
Date”: The date specified as such in Exhibit A and in the
related Bill of Sale, with respect to each Closing, or such other date as may be
mutually agreed to by the Seller and the Purchaser.
“Default
Interest”: With respect to any Mortgage Loan, interest at the
applicable Default Rate and borne by the applicable Mortgage Note following a
Mortgage Event of Default.
“Default
Rate”: With respect to any Mortgage Loan, the “default rate”,
“default interest rate” or other similar rate at which interest accrues during
the continuance of a Mortgage Event of Default as specified in the related
Mortgage Note, but only to the extent that such interest accrues at a rate in
excess of the Mortgage Interest Rate.
“Environmental
Claim”: Any claim, action, cause of action, suit, proceeding,
investigation, order, demand or notice (written or oral) by any Person alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from the presence, or Release into the environment
of, or exposure to, any Hazardous Substance at a Mortgaged Property, or
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
“Environmental
Law”: Any and all federal, state and local laws, rules or
regulations, any judicial or administrative orders, decrees or judgments
thereunder, and any permits, approvals, licenses, registrations, filings and
authorizations relating to the environment or the Release or threatened Release
of Hazardous Substances into the indoor or outdoor environment including,
without limitation, ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata or otherwise relating to the release of Hazardous
Substances.
“Escrow
Payments”: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
“Extended Representations and
Warranties”: The representations and warranties set forth
in:
(a) paragraphs 1 (Ownership of Assets), 2 (Authority to Transfer
Assets), 13 (Environmental Conditions) and
27 (Litigation) of Exhibit
C-1;
Appendix
A – 6
(b) paragraphs 1 (Ownership of Assets), 2 (Authority to Transfer
Assets), 13 (Environmental Conditions),
14 (Consumer Regulations), 15 (HOEPA) and 29 (Litigation) of Exhibit C-2;
and
(c) paragraphs 1 (Ownership of Assets), 2 (Authority to Transfer
Assets), 7 (Environmental Conditions) and
10 (Litigation) of Exhibit
C-3.
“FDIC”: The
Federal Deposit Insurance Corporation.
“Fletcher”: Fletcher
International, Inc., a Delaware company.
“GAAP”: U.S.
generally accepted accounting principles.
“Ground
Lease”: A ground lease of a Mortgaged Property.
“Hazardous
Substance”: Other than any chemical, material or substance
that is used or stored in a manner that is consistent with, and would not result
in liability under, any applicable Environmental Law, collectively, (a) any
petroleum, petroleum products or waste oils, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls (“PCBs”), lead in
drinking water, radon and lead-based paint, (b) any chemicals or other materials
or substances defined as or included in the definition of “hazardous
substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous
wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,”
“contaminants,” “pollutants,” or words of similar import under any Environmental
Law and (c) any other chemical or any other material or substance, exposure to
which is prohibited, limited or regulated under any Environmental
Law.
“HOEPA”: The
meaning specified in paragraph 15 of Exhibit
C-2.
“Immaterial
Modification”: Any immaterial modification, waiver or amendment of a
Mortgage Loan that is not a Material Modification and that would not adversely
affect the interests of the Purchaser in such Mortgage Loan, including, without
limitation: (i) waivers of minor covenant defaults (other than financial
covenants), including late financial statements, (ii) grants of easements that
do not materially adversely affect the use, operation or value of any Mortgaged
Property or the obligation of a Mortgagor to pay the related Mortgage Loan and
(iii) any other modifications, waivers or amendments that the Servicer
determines, in accordance with Accepted Servicing Practices, are of a routine
nature and which are made in accordance with Accepted Servicing
Practices. In no event shall any Immaterial Modification result in
the extension of the maturity date of a Mortgage Loan, a reduction in the
Mortgage Interest Rate borne by a Mortgage Loan or the contractual payment
payable on a Mortgage Loan or a deferral or forgiveness of interest on or
principal of a Mortgage Loan or a modification or waiver of any other monetary
term of a Mortgage Loan relating to the timing or amount of any payment of
principal or interest.
Appendix
A – 7
“Independent”: When
used with respect to any specified Person, means such a Person who does not have
any direct financial interest or any material indirect financial interest in any
Mortgagor, the Seller, the Servicer or any of their respective
Affiliates.
“Insurance
Proceeds”: Proceeds of any title policy, hazard policy or
insurance policy covering a Mortgage Loan, if any, to the extent such proceeds
are not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the terms of the related
Mortgage.
“Interested
Person”: As of any date of determination and with respect to
any Mortgage Loan or related Mortgaged Property or REO Property, the Seller, the
Servicer or any of their respective Affiliates.
“Interim
Period”: With respect to any Asset, the period beginning on
and including the Commitment Date and ending on but excluding the Closing Date
on which such Asset is purchased by a Purchaser.
“Joinder”: An
agreement substantially in the form of Exhibit E or such
other form as mutually acceptable to the Seller and the Person entering into
such agreement (as evidenced by their execution thereof) pursuant to which the
Person other than the Seller agrees that it will be deemed to be a party to and
a Purchaser under the Purchase Agreement upon execution of a Bill of
Sale.
“Lender”: United
Community Bank, as lender pursuant to a Loan Agreement.
“Liquidation
Expenses”: Reasonable, customary and necessary out-of-pocket
costs and expenses incurred by the Servicer on behalf of the Purchaser in
connection with the liquidation of a Mortgage Loan or the liquidation of a REO
Property, including, without limitation, legal fees and expenses, committee or
referee fees, brokerage commissions and conveyance taxes.
“Liquidation
Proceeds”: Cash (other than Insurance Proceeds or Condemnation
Proceeds) received in connection with the liquidation of a Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, judicial
foreclosure, foreclosure sale, sale of REO Property, or otherwise, or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan, other than amounts required to be paid to the
related Mortgagor pursuant to law or the terms of such Mortgage
Loan.
“Loan
Agreement”: A loan agreement entered into between United
Community Bank, as lender, and a Purchaser, substantially in the form of Exhibit J to the
Purchase Agreement unless another form is mutually agreed upon between such
lender and such Purchaser, pursuant to which United Community Bank will lend 80%
of the aggregate Purchase Price of the Assets purchased by such
Purchaser.
Appendix
A – 8
“Loan
File”: The meaning specified in Exhibit B-1 to the
Purchase Agreement.
“Major
Lease”: A material lease at a Mortgaged Property with respect
to which the related Mortgage Loan Documents grant the Mortgage Lender the right
to consent to the execution, termination or renewal of such lease.
“Material Adverse
Effect”: Any material adverse effect with respect to (a) the
business, properties, assets, operations, results of operations, revenues or
condition, financial or otherwise, of the Seller or the Servicer, as applicable
and its subsidiaries taken as a whole, (b) the legality, validity or
enforceability of the Purchase Agreement, the Servicing Agreement or the Loan
Agreement or (c) the Seller’s or the Servicer’s ability, as applicable, to
perform fully on a timely basis its obligations under the Purchase Agreement or
the Servicing Agreement, as applicable.
“Material
Modification”: A material modification, waiver or
amendment of a Mortgage Loan, excluding Immaterial Modifications but including,
without limitation:
(i) any
modification of, or waiver with respect to, such Mortgage Loan that would result
in the extension of the maturity date thereof, a reduction in the Mortgage
Interest Rate borne thereby or the contractual payment payable thereon or a
deferral or forgiveness of interest on or principal of such Mortgage Loan, a
modification or waiver of any other monetary term or material non-monetary term
of such Mortgage Loan, including, without limitation, any such modification or
waiver relating to the timing or amount of any payment of principal and interest
or a modification or waiver of any provision of such Mortgage Loan which
restricts the related Mortgagor from incurring additional
indebtedness;
(ii) any
modification or amendment of, or waiver with respect to, such Mortgage Loan that
would result in a discounted pay-off of such Mortgage Loan;
(iii) any
modification, waiver or amendment that would result in any release of the
related Mortgagor from liability with respect to such Mortgage
Loan;
(iv) any
modification, waiver or amendment of a “due-on-sale” or “due-on-encumbrance”
clause (other than a waiver of such a clause where such clause is not
exercisable under applicable law) for a Mortgage Loan;
(v) any
modification, waiver or amendment of the insurance requirements for the
Mortgaged Property related to a Mortgage Loan;
(vi) any
modification, waiver or amendment that would result in any substitution or
release of Mortgage Collateral Security for such Mortgage Loan; or
Appendix
A – 9
(vii) any
release of any Mortgage Collateral Security other than in connection with a
payment in full of all amounts owing under the related Mortgage, a sale of an
Asset or a substitution of an Asset pursuant to a Post-Closing
Substitution.
“MERS” means Mortgage
Electronic Registration Systems, Inc. or any successor or assign
thereto.
“MERS System” means
the electronic system of recording transfers of mortgages maintained by
MERS.
“MIN”: The
meaning specified in Exhibit B-1 to the
Purchase Agreement.
“MOM
Loan”: The meaning specified in Exhibit B-1 to the
Purchase Agreement.
“Mortgage”: The
mortgage, deed of trust or other instrument and riders thereto securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note or which secures the interest
of a Mortgagor as a lessee under a Ground Lease.
“Mortgage
Account”: With respect to any Mortgage Loan, any cash
collateral account, escrow account or reserve account or similar account
established pursuant to the related Mortgage or other Mortgage Loan
Document.
“Mortgage Collateral
Assignment”: Each instrument assigning or otherwise
transferring the Seller’s right, title and interest in and to a Mortgage and any
other Mortgage Collateral Security to the Purchaser, which instruments shall
comply in form and substance with any requirements contained in a related
Mortgage Loan Document.
“Mortgage Collateral
Security”: Any right, interest, document, instrument or
property given as security for or in guaranty of the Mortgage Loan (including,
without limitation, the Mortgages, the Assignment of Leases, Rents and Profits,
all Mortgage Accounts maintained with respect to such Mortgage Loan and the cash
and investments credited thereto, and the rights of the mortgagee under the
Required Insurance Policies and Title Insurance Policies), together with any
supplement or amendment thereto and as amended from time to time
hereafter.
“Mortgage Event of
Default”: With respect to a Mortgage Loan, an “event of
default” as defined or described in the related Mortgage.
“Mortgage Interest
Rate”: With respect to any Mortgage Loan, the “Mortgage
Interest Rate,” “Interest Rate.” “Applicable Interest Rate” or words
of similar meaning as defined in the related Mortgage Loan Documents (without
giving effect to any Default Interest).
Appendix
A – 10
“Mortgage
Lender”: The lender of a Mortgage Loan. Upon the
conveyance of a Mortgage Loan to the Purchaser pursuant to this Purchase
Agreement, the Purchaser shall be the Mortgage Lender until such loan is sold or
is reconveyed to the Seller pursuant to a Post-Closing
Substitution.
“Mortgage
Loan”: A commercial or residential mortgage loan which is the
subject of this Purchase Agreement as identified on the Asset List attached as
Schedule A to a
Bill of Sale, which Mortgage Loan includes without limitation the Mortgage Loan
Documents, the Loan File, the Servicing File, all payments received with respect
to such mortgage loan, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds, all liens and security
interests securing payment of the Mortgage Note and all other rights, benefits,
proceeds and obligations arising from or in connection with such mortgage
loan.
“Mortgage Loan
Documents”: With respect to a Mortgage Loan, the original
related Mortgage Note (or if the original note is missing, a lost note affidavit
with customary indemnification) with applicable addenda and riders, the original
related security instrument, any required addenda and riders, any related
assignments and any intervening related assignments and the related Title
Insurance Policy (other than any internal underwriting analysis of the Seller;
provided, however, the
Purchaser may have access to such analysis for its review).
“Mortgage
Note”: The promissory note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage and riders
thereto.
“Mortgaged
Property”: The real property securing repayment of the debt
evidenced by a Mortgage Note.
“Mortgagor”: The
obligor on a Mortgage Note.
“Net Liquidation
Proceeds”: The amount derived by subtracting the Liquidation
Expenses from the Liquidation Proceeds. Net Liquidation Proceeds with
respect to any Mortgage Loan shall be applied first to interest, expenses and
other non-principal amounts due on such Mortgage Loan (except for Default
Interest) and then to principal.
“Offered
Assets”: The Mortgage Loans and REO Properties that are
offered for sale to the Purchasers pursuant to the Purchase Agreement and which
are identified and described in Exhibit A to the
Purchase Agreement, as such Exhibit may be updated from time to time, together
with any related property, including the related Loan Files, Property Files and
Servicing Files.
“Officer’s
Certificate”: A certificate signed by the President and Chief
Executive Officer or any Executive Vice President, and delivered to the
Purchaser as required by this Purchase Agreement.
Appendix
A – 11
“Opinion of
Counsel”: A written opinion of counsel, who may be an employee
of the Seller, reasonably acceptable to the Purchaser.
“Optional
Exchange”: The meaning specified in Section 2(b) of the
Purchase Agreement.
“Permitted
Encumbrances”: With respect to a Mortgaged Property or an REO
Property, (a) the lien of current real and personal property taxes, water rates,
sewer rents and assessments or payments to the taxing authority in lieu thereof
not yet due or delinquent, (b) covenants, conditions and restrictions, rights of
way easements and other matters of public record or reflected on the related
survey, (c) encumbrances and exceptions specifically referred to in the Title
Insurance Policy issued or, as evidenced by a “marked-up” commitment for title
insurance, to be issued in respect of the Mortgaged Property or REO Property, as
applicable, (d) rights of tenants as tenants only and (e) where a Mortgaged
Property or REO Property is a condominium unit, the lien of a condominium
association on such Mortgaged Property or REO Property for unpaid maintenance or
common expense assessments which in either case are not yet due and
payable.
“Person”: Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
“Post-Closing
Substitution”: With respect to a substitution of a Breaching
Asset by a Purchaser after such Breaching Asset’s Closing Date, the meaning
specified in Section
7(a) of the Purchase Agreement.
“Pre-Closing
Substitution”: With respect to a substitution of a Breaching
Asset by a Purchaser prior to such Breaching Asset’s Closing Date, the meaning
specified in Section
2(c) of the Purchase Agreement.
“Principal
Balance”: As to each Mortgage Loan, the actual outstanding
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal and to all amounts attributable to principal collected
from or on behalf of the Mortgagor, including the principal portion of
Liquidation Proceeds, Condemnation Proceeds, and Insurance Proceeds, in each
case in accordance with GAAP consistently applied.
“Principal
Prepayment”: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled due date, including
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Appendix
A – 12
“Property
File”: The meaning specified in Exhibit B-2 to the
Purchase Agreement.
“Purchase
Agreement”: The Asset Purchase and Sale Agreement dated as
of April 1, 2010, among United Community Bank, a bank organized under the
laws of the State of Georgia, as Seller, Fletcher International, Inc., a
Delaware company, and each affiliate of Fletcher International, Inc. that
becomes a party to such agreement as a purchaser, as amended, modified or
otherwise in effect.
“Purchase
Price”: With respect to any Asset, the Carrying Value thereof
as of the related Cut-off Date.
“Purchaser”: An
affiliate of Fletcher International, Inc., that has become a party to the
Purchase Agreement by entering into a Joinder thereto.
“Qualified
Appraiser”: An appraiser who is Independent, a member in good
standing of the Appraisal Institute with an MAI membership designation and who
is on the Seller’s approved appraiser list.
“Release”: Any
release, spill, emission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, including, without limitation, the movement of Hazardous Substances
through ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata.
“REO
Disposition”: The final sale of any REO Property.
“REO Disposition
Proceeds”: All amounts received with respect to an REO
Disposition.
“REO
Property”: A Mortgaged Property acquired through foreclosure,
deed in lieu of foreclosure, power of sale or otherwise.
“Required Insurance
Policy”: Any insurance policy which is required to be
maintained from time to time under a Mortgage or other Mortgage Loan
Document.
“Securities Purchase
Agreement”: The Securities Purchase Agreement, dated as of
April 1, 2010, between United Community Banks, Inc., a corporation organized
under the laws of Georgia, and Fletcher International, Ltd., a company domiciled
in Bermuda, as amended, restated or otherwise modified and in effect from time
to time.
“Seller”: United
Community Bank, in its capacity as seller pursuant to the Purchase Agreement and
each Bill of Sale.
Appendix
A – 13
“Servicer”: United
Community Bank, in its capacity as servicer pursuant to a Servicing Agreement
entered into with a Purchaser, or any of its successors or permitted
assigns.
“Servicer Event of
Default”: The meaning specified in Section 27 of the
Servicing Agreement.
“Servicing
Agreement”: A servicing agreement between United Community
Bank and a Purchaser substantially in the form of Exhibit G to the
Purchase Agreement unless another form is mutually agreed upon between such
United Community Bank and such Purchaser, pursuant to which United Community
Bank will service, manage, restructure and sell the Purchaser’s Assets at the
direction of the Purchaser.
“Servicing
File:” The meaning specified in Section 2(i) of the
Purchase Agreement.
“Sub-Servicer”: Any
Person with which the Servicer has entered into a Sub-Servicing Agreement and
which satisfies the requirements set forth in the Servicing
Agreement.
“Sub-Servicing
Agreement”: A written contract between the Servicer and any
Person relating to the servicing or the administration of an Asset as an agent
of the Servicer.
“Substitution”: A
Pre-Closing Substitution pursuant to Section 2(c) of the
Purchase Agreement or a Post-Closing Substitution pursuant to Section 7 of the
Purchase Agreement, as applicable.
“Substitution
Period”: The meaning specified in Section 7(a) of the
Purchase Agreement.
“Taxes”: The
meaning specified in Section 12(d) of the
Purchase Agreement.
“Title Insurance
Policy”: With respect to (i) each Mortgage Loan, the ALTA (or
equivalent) mortgagee title insurance policy or policies issued with respect to
the Mortgaged Property for such Mortgage Loan and insuring the first priority
mortgage lien in favor of the Purchaser pursuant to the related Mortgage and
containing certain endorsements and affirmative assurances and (ii) each REO
Property, the ALTA (or equivalent) owner’s title insurance policy or policies
issued with respect to the REO Property and insuring title in favor of the
Purchaser and containing certain endorsements and affirmative
assurances.
“UCB
Breach”: The occurrence of any event specified in Section 8(d) of the
Purchaser Agreement.
“UCBI”: United
Community Banks, Inc., a corporation organized under the laws of the State of
Georgia.
Appendix
A – 14
“USAP”: Uniform
Single Attestation for Mortgage Bankers.
“Use”: With
respect to any Hazardous Substance, the generation, manufacture, processing,
distribution, handling, use, treatment, recycling or storage of such Hazardous
Substance.
Appendix
A – 15
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
REGARDING
ASSETS THAT ARE COMMERCIAL MORTGAGE LOANS
With respect to the Assets, as of the
Closing Date (except as may be specified in the representation and warranty and
except for the exceptions specifically agreed upon by the Purchaser in writing),
the Seller represents and warrants as to such Assets:
1. Ownership of
Assets. Immediately prior to the transfer thereof to the
Purchaser, the Seller had good and marketable title to, and was the sole owner
and holder of, such Assets, free and clear of any and all liens, encumbrances
and other interests on, in or to such Asset other than Permitted
Encumbrances.
2. Authority to Transfer
Assets. The Seller has full right and authority to sell,
assign and transfer such Assets.
3. Asset List. The
information pertaining
to such Assets set forth in the Asset List is true and correct in all material
respects as of the related Closing Date.
4. Permitted
Encumbrances. Subject to the disclosures under the “Lien
Releases” representation in paragraph 30 below,
if any, the related Mortgage constitutes a valid first lien upon the related
Mortgaged Property, including all buildings located thereon and all fixtures
attached thereto, such lien being subject only to Permitted
Encumbrances. The Permitted Encumbrances do not materially interfere
with the security intended to be provided by the related Mortgage or the current
use or operation of the related Mortgaged Property.
5. Title
Insurance. The lien of the related Mortgage is insured by a
mortgagee Title Insurance Policy, or its equivalent as adopted in the applicable
jurisdiction, issued by a nationally recognized title insurance company,
insuring the originator of such Mortgage Loan, its successors and assigns, as to
the first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to Permitted Encumbrances (or, if a Title Insurance
Policy has not yet been issued in respect of the Mortgage Loan, a policy meeting
the foregoing description is evidenced by a commitment for title insurance
“marked-up” at the closing of such loan). Each Title Insurance Policy
(or, if it has yet to be issued, the coverage to be provided thereby) is in full
force and effect, all premiums thereon have been paid and no material claims
have been made thereunder and no claims have been paid thereunder. The Seller
has not, by act or omission, done anything that would materially impair the
coverage under such Title Insurance Policy.
6. No Waivers by Seller of Material
Defaults. The Seller has not waived any material default, breach,
violation or event of acceleration existing under the related Mortgage or
Mortgage Note. Notwithstanding anything to the contrary contained in this
representation and warranty, this representation and warranty does not address
or otherwise cover any default, breach, violation or event of acceleration that
specifically pertains to any matter otherwise covered or addressed by any other
representation or warranty made by the Seller as specified in this Exhibit C-1; and a
breach by a Mortgagor of any representation or warranty contained in any
Mortgage Loan Document shall not constitute a non-monetary default, breach,
violation or event of acceleration for purposes of this representation if the
subject matter of such representation or warranty is also covered or addressed
by any representation or warranty made in this Exhibit
C-1.
Exhibit C
– 1 – 1
7. No Offsets, Defenses or
Counterclaims. There is no material valid offset,
defense or counterclaim to such Mortgage Loan.
8. Condition of Property;
Condemnation. To the Seller’s actual knowledge, the related Mortgaged
Property is free and clear of any damage that would materially and adversely
affect its value as security for such Mortgage Loan unless there has been
already escrowed 100% of the amounts required to make any necessary repairs to
correct such material damage. There are no proceedings for the condemnation of
all or any material portion of the related Mortgaged Property.
9. Compliance with Usury Laws.
Such Mortgage Loan complied with, or was exempt from, all applicable usury laws
in effect as of its date of origination or the Loan File contains an opinion to
that effect.
10. Full Disbursement of Mortgage Loan
Proceeds. The proceeds of such Mortgage Loan have been fully disbursed
and there is no requirement applicable to the holder of the Mortgage Loan for
future advances thereunder.
11. Enforceability. Each related
Mortgage Note, related Mortgage and related Assignment of Leases, Rents and
Profits (if any) is the legal, valid and binding obligation of the maker thereof
(subject to any non-recourse provisions contained in any of the foregoing
agreements and any applicable state anti-deficiency or market value limit
deficiency legislation), enforceable in accordance with its terms, except as
such enforcement may be limited by anti-deficiency, bankruptcy, insolvency,
reorganization, receivership, moratorium, redemption, liquidation or other laws
relating to or affecting the rights of creditors generally and by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
Exhibit C
– 1 – 2
12. Insurance. The
improvements upon the related Mortgaged Property are insured against loss by a
fire and extended perils policy providing coverage against loss or damage
included within the “all risk of physical loss” or the equivalent thereof, in an
amount (subject to a customary deductible) at least equal to the lesser of (1)
the outstanding principal amount of such Mortgage Loan, (2) 100% of the full
actual replacement cost or value of the improvements located on such Mortgaged
Property (exclusive of costs of excavations, foundations and underground
utilities and footings) and (3) the full insurable actual cash value of such
improvements, and the related hazard insurance policy contains appropriate
endorsements to avoid the application of co-insurance and does not permit
reduction in insurance proceeds for depreciation. If any portion of the
improvements on the related Mortgaged Property was, at the time of the
origination of such Mortgage Loan, in an area identified in the Federal Register
by the Federal Emergency Management Agency as having “special flood hazards,” a
flood insurance policy meeting any requirements of the then current guidelines
of the Federal Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(1) the outstanding principal amount of such Mortgage Loan, (2) the full
insurable actual cash value of such Mortgaged Property, (3) the maximum amount
of insurance available under the National Flood Insurance Act of 1968, as
amended, and (4) 100% of the full actual replacement cost or value of the
improvements located on such Mortgaged Property. The loan documents
require the Mortgagor to maintain (or to cause the applicable tenant to
maintain) the insurance referred to in this paragraph in respect of the
Mortgaged Property, and all such insurance required by the loan documents to be
maintained is in full force and affect and names the originator of such Mortgage
Loan as mortgagee, loss payee or additional insured. Each such insurance policy
requires prior notice to the holder of the Mortgage of termination or
cancellation, and no such notice has been received, including any notice of
nonpayment of premiums, that has not been cured.
13. Environmental
Conditions. As of the Closing Date, (i) there are no material
adverse environmental conditions or circumstances affecting such Mortgaged
Property; (ii) no Mortgaged Property is subject to a notice, Environmental
Claim, request for information or order from or agreement with a government
authority or any other Person respecting the Release or threatened Release of a
Hazardous Substance; (iii) there has been no Release of Hazardous Substances on,
at or under any Mortgaged Property which would reasonably be expected to result
in the imposition of any material liability or any Environmental Claim; (iv)
there are no judicial or administrative proceedings or any other Environmental
Claims pending or threatened alleging any violation or failure to comply with
any Environmental Law, or with respect to any release of any Hazardous Substance
from any Mortgaged Property; (v) there are no past or present Releases of any
Hazardous Substances that could form the basis of any Environmental Claim
against any Person or entity whose liability for any Environmental Claim the
Seller has retained or assumed either contractually or by operation of law, or
otherwise result in any costs or liabilities under Environmental Laws; and (vi)
none of the Mortgaged Properties are subject to any removal or remediation of
any Hazardous Substances or are subject to notice to or approval from any
governmental authority pertaining to environmental matters.
14. No Cross-Collateralization with
Other Mortgage Loans. Such Mortgage Loan is not
cross-collateralized with any other mortgage loan not sold to the
Purchaser.
Exhibit C
– 1 – 3
15. Waivers and
Modifications. The terms of the related Mortgage and the
related Mortgage Note have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Loan
File.
16. Taxes and
Assessments. There are no delinquent taxes or governmental
assessments affecting the related Mortgaged Property that on or before the
Closing Date became due and owing, which are or may become a lien of priority
equal to or higher than the lien of the related Mortgage except such as have
been paid, or an escrow of funds in an amount sufficient to cover such payments
has been established. For purposes of this representation and
warranty, real property taxes and assessments shall not be considered unpaid
until the date on which interest and/or penalties would be payable
thereon.
17. Valid
Assignment. The assignment of the Mortgage related to each
Mortgage Loan, constitutes the legal, valid and binding assignment of such
Mortgage from the Seller to the Purchaser subject to the exceptions described in
paragraph 11
(Enforceability) above.
The Assignment of Leases, Rents and Profits, if any, set forth in the Mortgage
or separate from the related Mortgage and related to and delivered in connection
with each Mortgage Loan establishes and creates a valid and, subject only to the
(i) Permitted Encumbrances, (ii) the exceptions set forth in paragraph 11 (Enforceability) above and
(iii) a license granted to the related Mortgagor to exercise certain rights and
to perform certain obligations of the lessor under such leases, including the
right to operate the related Mortgaged Property as of the date of origination of
each Mortgage Loan, enforceable first priority lien and first priority security
interest in the related Mortgagor’s interest in all leases, subleases, licenses
or other agreements assigned thereunder from time to time, to the extent
permitted by law, pursuant to which any person is entitled to occupy, use or
possess all or any portion of the real property subject to the related Mortgage,
and each assignor thereunder has the full right to assign the same, to the
extent permitted by law. The related assignment of any Assignment of Leases,
Rents and Profits, not included in a Mortgage, executed and delivered in favor
of the Purchaser constitutes a legal, valid and binding assignment, subject to
the exceptions described in paragraph 11 (Enforceability)
above.
18. Escrows. There are
no cash, escrow or reserve deposits relating to such Mortgage Loan that are, as
of the Closing Date, required to be deposited with the mortgagee or its
agent.
19. No Material
Encroachments. As of the date of origination of a Mortgage
Loan, no improvement that was included for the purpose of determining the
Appraised Value of the related Mortgaged Property at the time of origination of
such Mortgage Loan lay outside the boundaries and building restriction lines of
such property (unless affirmatively covered by the Title Insurance Policy
referred to in paragraph 5 (Title
Insurance) above), and no improvements on adjoining properties encroached
upon such Mortgaged Property. The improvements located on or forming
part of such Mortgaged Property comply in all material respects with applicable
zoning laws and ordinances (except to the extent that they may constitute legal
nonconforming uses).
Exhibit C
– 1 – 4
20. Inspection. In
connection with the origination of each Mortgage Loan, the Seller inspected or
caused to be inspected (either directly by the Seller, by its correspondent or
by a third party) the Mortgaged Property.
21. No Equity Participation or
Contingent Interest. No Mortgage Loan contains an equity
participation by the Seller, or provides for any contingent or additional
interest in the form of participation in the cash flow of the related Mortgaged
Property. No Mortgage Loan provides for negative amortization.
22. No Advances of Funds. No
holder of the Mortgage Loan has advanced funds or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
related Mortgaged Property (other than a tenant required to make its lease
payments directly to the holder of the related Mortgage Loan), directly or
indirectly, for the payment of any amount required by the Mortgage
Loan.
23. Licenses, Permits, Etc. All
licenses, permits and authorizations required by applicable laws for the use of
the related Mortgaged Property as it is currently operated have been obtained
and maintained in accordance with applicable laws, except for such licenses,
permits and authorizations the failure of which to obtain would not materially
adversely affect the value, use or operation of the Mortgaged
Property.
24. Servicing. The servicing and
collection practices used by the Seller and its designees with respect to the
Mortgage Loan have been in all material respects legal and have met customary
standards utilized by commercial banks in the area in which the Mortgaged
Property is located for servicing of commercial mortgage loans.
25. Customary Remedies. The
related Mortgage or Mortgage Note, together with applicable state law, contains
customary and enforceable provisions (subject to the exceptions set forth in
paragraph 11
(Enforceability) above)
such as to render the rights and remedies of the holders thereof adequate for
the practical realization against the related Mortgaged Property of the
principal benefits of the security intended to be provided thereby.
26. Insurance and Condemnation
Proceeds. The related Mortgage or other related loan document
provides that insurance proceeds and condemnation proceeds will be applied to
either restore or repair the Mortgaged Property or repay the principal of the
Mortgage Loan, with, in some cases, the related Mortgagor (or the tenant or
master lessee at the Mortgaged Property which maintains such insurance) being
entitled to receive proceeds in excess of the amount utilized to restore or
repair the Mortgaged Property.
Exhibit C
– 1 – 5
27. Litigation. To the
Seller’s actual knowledge, there are no pending actions, suits or proceedings by
or before any court or governmental authority against or affecting the related
Mortgagor or the related Mortgaged Property that, if determined adversely to
such Mortgagor or Mortgaged Property, would materially and adversely affect the
value, use or operation of the Mortgaged Property.
28. Leasehold
Estate. Each Mortgaged Property consists of either (1) the
related Mortgagor’s fee simple estate in real estate or (2) if the related
Mortgage Loan is secured in whole or in part by the interest of a Mortgagor as a
lessee under a Ground Lease and not by the fee simple interest, the related
Mortgagor’s interest in the Ground Lease and the following apply to such Ground
Lease:
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a.
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Such
Ground Lease or a memorandum thereof has been or will be duly recorded;
such Ground Lease (or the related estoppel letter or lender protection
agreement between the Seller and related lessor) permits the interest of
the lessee thereunder to be encumbered by the related
Mortgage;
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b.
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The
lessee’s interest in such Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the related Mortgage,
other than the ground lessor’s related fee interest and Permitted
Encumbrances;
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|
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c.
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The
Mortgagor’s interest in such Ground Lease is assignable to the Purchaser
and its successors and assigns upon notice to, but without the consent of,
the lessor thereunder (or, if such consent is required, it has been
obtained prior to the Closing Date) and, in the event that it is so
assigned, is further assignable by the Purchaser and its successors and
assigns upon notice to, but without the need to obtain the consent of,
such lessor;
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d.
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Such
Ground Lease is in full force and effect, no notice of an event of default
has occurred thereunder and, to the Seller’s actual knowledge, there
exists no condition that, but for the passage of time or the giving of
notice, or both, would result in an event of default under the terms of
such Ground Lease;
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e.
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Such
Ground Lease, or an estoppel letter or other agreement, requires the
lessor under such Ground Lease to give notice of any default by the lessee
to the mortgagee, provided that the mortgagee has provided the lessor with
notice of its lien in accordance with the provisions of such Ground Lease,
and such Ground Lease, or an estoppel letter or other agreement, further
provides that no notice of termination given under the Ground Lease is
effective against the mortgagee unless a copy has been delivered to the
mortgagee;
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Exhibit C
– 1 – 6
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f.
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A
mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the
lessee under such Ground Lease) to cure any default under such Ground
Lease which is curable after the receipt of notice of any such default,
before the lessor thereunder may terminate such Ground
Lease;
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g.
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Such
Ground Lease has an original term (including any extension options set
forth therein) which extends not less than twenty years beyond the
maturity date of the related Mortgage
Loan;
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h.
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Under
the terms of such Ground Lease and the related Mortgage, taken together,
any related insurance proceeds, will be applied either to the repair or
restoration of all or part of the related Mortgaged Property, with the
mortgagee or a trustee appointed by it having the right to hold and
disburse such proceeds as the repair or restoration progresses (except in
such cases where a provision entitling another party to hold and disburse
such proceeds would not be viewed as commercially unreasonable by a
prudent commercial mortgage lender), or to the payment of the outstanding
principal amount of the Mortgage Loan together with any accrued interest
thereon, with, in some cases, the related Mortgagor being entitled to
receive proceeds in excess of the amount utilized to restore or repair the
Mortgaged Property;
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i.
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Such
Ground Lease requires the lessor to enter into a new lease with the Seller
or its successors or assigns in the event of a termination of the Ground
Lease by reason of a default by the Mortgagor under the Ground Lease,
including rejection of the Ground Lease in a bankruptcy proceeding;
and
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j.
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Such
Ground Lease does not impose restrictions on subletting portions of the
premised demised under the Ground Lease without the consent of the lessor
(except in the case where such consent cannot be unreasonably
withheld).
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29. Deed of Trust. If the related
Mortgage is a deed of trust, to the Seller’s actual knowledge, a trustee, duly
qualified under applicable law to serve as such, is properly designated and
serving under such Mortgage.
30. Lien Releases. The related
Mortgage Note or Mortgage does not require the holder thereof to release all or
any portion of the Mortgaged Property from the lien of the related Mortgage,
except upon payment in full of all amounts due under such Mortgage Loan which
have been allocated to such Mortgaged Property upon the payment of specified
release consideration, satisfaction of a debt service coverage ratio test and
subject to the satisfaction of certain customary criteria set forth in the
related loan agreement.
31. Origination of
Loans. Other than approved exceptions, each Mortgage Loan
complies in all material respects with the Seller’s underwriting policies in
effect as of such loan’s origination date.
Exhibit C
– 1 – 7
32. Priority of Adjustable Rate
Loans. All terms of the loan documents pertaining to interest
rate adjustments, payment adjustments and principal balance adjustments are
enforceable and will not affect the priority of the mortgage lien.
33. Assignability of Mortgage
Loans. The note and mortgage contain no provision limiting the
right or ability of the Seller to assign, transfer and convey the note or
mortgage to the Purchaser other than provisions that have been complied
with.
34. Due-on-Sale Clauses. Each
related Mortgage or loan agreement contains provisions for the acceleration of
the unpaid balance of such Mortgage Loan, if, without prior consent of lender or
satisfaction of certain conditions, the related Mortgaged Property or interest
therein is directly or indirectly transferred or sold or encumbered in
connection with subordinate financing.
35. Subordinate Financing. No
Mortgagor is permitted to incur indebtedness subordinate to the related Mortgage
Loan and secured by the related Mortgaged Property.
36. Appraisal. The
Seller has obtained an Appraisal of the related Mortgaged Property within 12
months of the applicable Closing Date. As of the date of such
Appraisal, the Carrying Value of the related Mortgage did not exceed the value
of such Mortgaged Property as determined by such Appraisal.
Exhibit C
– 1 – 8
EXHIBIT
C-2
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
REGARDING
ASSETS THAT ARE RESIDENTIAL MORTGAGE LOANS
With
respect to the Assets that are residential mortgage loans, as of the Closing
Date (except as may be specified in the representation and warranty and except
for the exceptions specifically agreed upon by the Purchaser in writing, the
Seller represents and warrants as to such Assets:
1. Ownership of
Assets. Immediately prior to the transfer thereof to the
Purchaser, the Seller had good and marketable title to, and was the sole owner
and holder of, such Assets, free and clear of any and all liens, encumbrances
and other interests on, in or to such Asset other than Permitted
Encumbrances.
2. Authority to Transfer
Assets. The Seller has full right and authority to sell,
assign and transfer such Assets.
3. Asset List. The
information pertaining to such Assets set forth in the Asset List is true and
correct in all material respects as of the related Closing
Date.
4. Permitted
Encumbrances. Subject to the disclosures under paragraph 32 (Lien Releases) below, if any,
the related Mortgage constitutes a valid first lien upon the related Mortgaged
Property, including all buildings located thereon and all fixtures attached
thereto, such lien being subject only to Permitted Encumbrances. The Permitted
Encumbrances do not materially interfere with the security intended to be
provided by the related Mortgage or the current use or operation of the related
Mortgaged Property.
5. Title
Insurance. The lien of the related Mortgage is insured by a
mortgagee Title Insurance Policy, or its equivalent as adopted in the applicable
jurisdiction, issued by a nationally recognized title insurance company,
insuring the originator of such Mortgage Loan, its successors and assigns, as to
the first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to Permitted Encumbrances (or, if a Title Insurance
Policy has not yet been issued in respect of the Mortgage Loan, a policy meeting
the foregoing description is evidenced by a commitment for title insurance “marked-up” at the closing of
such loan). Each Title Insurance Policy (or, if it has yet to be
issued, the coverage to be provided thereby) is in full force and effect, all
premiums thereon have been paid and no material claims have been made thereunder
and no claims have been paid thereunder. The Seller has not, by act or omission,
done anything that would materially impair the coverage under such Title
Insurance Policy.
Exhibit C
– 2 – 1
6. No Waivers by Seller of Material
Defaults. The Seller has not waived any material default, breach,
violation or event of acceleration existing under the related Mortgage or
Mortgage Note. Notwithstanding anything to the contrary contained in this
representation and warranty, this representation and warranty does not address
or otherwise cover any default, breach, violation or event of acceleration that
specifically pertains to any matter otherwise covered or addressed by any other
representation or warranty made by the Seller as specified in this Exhibit C-2; and a
breach by a Mortgagor of any representation or warranty contained in any
Mortgage Loan Document shall not constitute a non-monetary default, breach,
violation or event of acceleration for purposes of this representation if the
subject matter of such representation or warranty is also covered or addressed
by any representation or warranty made in this Exhibit
C-2.
7. No Offsets, Defenses or
Counterclaims. There is no valid offset, defense or counterclaim to such
Mortgage Loan.
8. Condition of Property;
Condemnation. To the Seller’s actual knowledge, the related Mortgaged
Property is free and clear of any damage that would materially and adversely
affect its value as security for such Mortgage Loan unless there has been
already escrowed 100% of the amounts required to make any necessary repairs to
correct such material damage. There are no proceedings for the condemnation of
all or any material portion of the related Mortgaged
Property.
9. Compliance with Usury Laws.
Such Mortgage Loan complied with, or was exempt from, all applicable usury laws
in effect as of its date of origination or the Loan File contains an opinion to
that effect.
10. Full Disbursement of Mortgage Loan
Proceeds. The proceeds of such Mortgage Loan have been fully disbursed
and there is no requirement applicable to the holder of the Mortgage Loan for
future advances thereunder.
11. Enforceability. Each related
Mortgage Note and each related Mortgage is the legal, valid and binding
obligation of the maker thereof (subject to any non-recourse provisions
contained in any of the foregoing agreements and any applicable state
anti-deficiency or market value limit deficiency legislation), enforceable in
accordance with its terms, except as such enforcement may be limited by
anti-deficiency, bankruptcy, insolvency, reorganization, receivership,
moratorium, redemption, liquidation or other laws relating to or affecting the
rights of creditors generally and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law).
Exhibit C
– 2 – 2
12. Insurance. The
improvements upon the related Mortgaged Property are insured against loss by a
fire and extended perils policy providing coverage against loss or damage
included within the “all risk of
physical loss” or the equivalent
thereof, in an amount (subject to a customary deductible) at least equal to the
lesser of (1) the outstanding principal amount of such Mortgage Loan, (2) 100%
of the full actual replacement cost or value of the improvements located on such
Mortgaged Property (exclusive of costs of excavations, foundations and
underground utilities and footings) and (3) the full insurable actual cash value
of such improvements, and the related hazard insurance policy contains
appropriate endorsements to avoid the application of co-insurance and does not
permit reduction in insurance proceeds for depreciation. If any portion of the
improvements on the related Mortgaged Property was, at the time of the
origination of such Mortgage Loan, in an area identified in the Federal Register
by the Federal Emergency Management Agency as having “special flood
hazards,” a
flood insurance policy meeting any requirements of the then current guidelines
of the Federal Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(1) the outstanding principal amount of such Mortgage Loan, (2) the full
insurable actual cash value of such Mortgaged Property, (3) the maximum amount
of insurance available under the National Flood Insurance Act of 1968, as
amended, and (4) 100% of the replacement cost or value of the improvements
located on such Mortgaged Property. The loan documents require the
Mortgagor to maintain (or to cause the applicable tenant to maintain) the
insurance referred to in this paragraph in respect of the Mortgaged Property,
and all such insurance required by the loan documents to be maintained is in
full force and affect and names the originator of such Mortgage Loan as
mortgagee, loss payee or additional insured. Each such insurance policy requires
prior notice to the holder of the Mortgage of termination or cancellation, and
no such notice has been received, including any notice of nonpayment of
premiums, that has not been cured.
13. Environmental
Conditions. As of the Closing Date, (i) there are no material
adverse environmental conditions or circumstances affecting such Mortgaged
Property; (ii) no Mortgaged Property is subject to a notice, Environmental
Claim, request for information or order from or agreement with a government
authority or any other Person respecting the Release or threatened Release of a
Hazardous Substance; (iii) there has been no Release of Hazardous Substances on,
at or under any Mortgaged Property which would reasonably be expected to result
in the imposition of any liability or any Environmental Claim; (iv) there are no
judicial or administrative proceedings or any other Environmental Claims pending
or threatened alleging any violation or failure to comply with any Environmental
Law, or with respect to any release of any Hazardous Substance from any
Mortgaged Property; and (v) none of the Mortgaged Properties are subject to any
removal or remediation of any Hazardous Substances or are subject to notice to
or approval from any governmental authority pertaining to environmental
matters. The Mortgaged Property complies with all applicable laws,
rules and regulations, including but not limited to those relating to
environmental matters, including but not limited to those relating to radon,
asbestos and lead paint and neither the Seller nor, to the Seller’s knowledge,
the Mortgagor, has received any notice of any violation or potential violation
of such law;
Exhibit C
– 2 – 3
14. Consumer
Regulations. Each Mortgage Loan complied in all material
respects with any and all requirements of federal, state or local laws or
regulations, including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, predatory lending, abusive
lending, fair lending, fair credit reporting, unfair collection practice, equal
credit opportunity, fair housing and disclosure laws and regulations, applicable
to the solicitation, origination, collection and servicing of such Mortgage
Loan; and any obligations of the holder of the Mortgage Note, Mortgage and other
loan documents have been complied with in all material respects and the
consummation of the transaction contemplated hereby will not involve the
violation of any such laws or regulations;
15. HOEPA. No Mortgage
Loan is subject to the provisions of the Homeownership and Equity Protection Act
of 1994 (“HOEPA”) as
amended or has an “annual percentage rate” or “total points and fees” payable by
the mortgagor (as each such term is defined under HOEPA) that equal or exceed
the applicable thresholds defined under HOEPA (Section 32 of Regulation Z, 12
C.F.R. Section 226.32(a)(1)(i) and (ii)) or is considered a “high cost,”
“predatory” or “abusive” loan (or a similarly designated loan using different
terminology) under any state, county or municipal laws or ordinances, including
without limitation, the provisions of the Georgia Fair Lending Act or any other
statute or regulation providing “assignee” or “originator” liability to
holders of such mortgage loans;
16. No Cross-Collateralization with
Other Mortgage Loans. Such Mortgage Loan is not
cross-collateralized with any other mortgage loan not sold to the
Purchaser.
17. Waivers and
Modifications. The terms of the related Mortgage and the
related Mortgage Note have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Loan
File.
18. Taxes and
Assessments. There are no delinquent taxes or governmental
assessments affecting the related Mortgaged Property that on or before the
Closing Date became due and owing which are or may become a lien of priority
equal to or higher than the lien of the related Mortgage except such as have
been paid, or an escrow of funds in an amount sufficient to cover such payments
has been established. For purposes of this representation and
warranty, real property taxes and assessments shall not be considered unpaid
until the date on which interest and/or penalties would be payable
thereon.
19. Valid
Assignment. The assignment of the Mortgage related to each
Mortgage Loan, constitutes the legal, valid and binding assignment of such
Mortgage from the Seller to the Purchaser subject to the exceptions described in
paragraph 11
(Enforceability)
above.
20. Escrows. There are
no cash, escrow or reserve deposits relating to such Mortgage Loan that are, as
of the Closing Date, required to be deposited with the mortgagee or its
agent.
21. No Material
Encroachments. As of the date of origination of a Mortgage
Loan, no improvement that was included for the purpose of determining the
Appraised Value of the related Mortgaged Property at the time of origination of
such Mortgage Loan lay outside the boundaries and building restriction lines of
such property (unless affirmatively covered by the Title Insurance Policy
referred to in paragraph 5 (Title Insurance) above), and
no improvements on adjoining properties encroached upon such Mortgaged
Property. The improvements located on or forming part of such
Mortgaged Property comply in all material respects with applicable zoning laws
and ordinances (except to the extent that they may constitute legal
nonconforming uses).
Exhibit C
– 2 – 4
22. Inspection. In
connection with the origination of each Mortgage Loan, the Seller inspected or
caused to be inspected (either directly by the Seller, by its correspondent or
by a third party) the Mortgaged Property.
23. No Equity Participation or
Contingent Interest. No Mortgage Loan contains an equity
participation by the Seller, or provides for any contingent or additional
interest in the form of participation in the cash flow of the related Mortgaged
Property. No Mortgage Loan provides for negative
amortization.
24. No Advances of Funds. No
holder of the Mortgage Loan has advanced funds or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
related Mortgaged Property (other than a tenant required to make its lease
payments directly to the holder of the related Mortgage Loan), directly or
indirectly, for the payment of any amount required by the Mortgage
Loan.
25. Licenses, Permits, Etc. All
licenses, permits and authorizations required by applicable laws for the use of
the related Mortgaged Property as it is currently operated have been obtained
and maintained in accordance with applicable laws except for such licenses,
permits and authorizations the failure of which to obtain would not materially
adversely affect the value, use or operation of the Mortgaged
Property.
26. Servicing. The servicing and
collection practices used by the Seller and its designees with respect to the
Mortgage Loan have been in all material respects legal and have met customary
standards utilized by commercial banks in the area in which the Mortgaged
Property is located for servicing of commercial mortgage
loans.
27. Customary Remedies. The
related Mortgage or Mortgage Note, together with applicable state law, contains
customary and enforceable provisions (subject to the exceptions set forth in
paragraph 11
(Enforceability) above)
such as to render the rights and remedies of the holders thereof adequate for
the practical realization against the related Mortgaged Property of the
principal benefits of the security intended to be provided
thereby.
28. Insurance and Condemnation
Proceeds. The related Mortgage or other related loan document
provides that insurance proceeds and condemnation proceeds will be applied to
either restore or repair the Mortgaged Property or repay the principal of the
Mortgage Loan, with, in some cases, the related Mortgagor (or the tenant or
master lessee at the Mortgaged Property which maintains such insurance) being
entitled to receive proceeds in excess of the amount utilized to restore or
repair the Mortgaged Property.
Exhibit C
– 2 – 5
29. Litigation. To the
Seller’s actual knowledge, there are no pending actions, suits or proceedings by
or before any court or governmental authority against or affecting the related
Mortgagor or the related Mortgaged Property that, if determined adversely to
such Mortgagor or Mortgaged Property, would materially and adversely affect the
value, use or operation of the Mortgaged Property.
30. Leasehold
Estate. Each Mortgaged Property consists of either (1) the
related Mortgagor’s fee simple estate in real estate or (2) if the related
Mortgage Loan is secured in whole or in part by the interest of a Mortgagor as a
lessee under a Ground Lease and not by the fee simple interest, the related
Mortgagor’s interest in the Ground Lease and the following apply to such Ground
Lease:
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a.
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Such
Ground Lease or a memorandum thereof has been or will be duly recorded;
such Ground Lease (or the related estoppel letter or lender protection
agreement between the Seller and related lessor) permits the interest of
the lessee thereunder to be encumbered by the related
Mortgage;
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b.
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The
lessee’s interest in such Ground Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the related Mortgage,
other than the ground lessor’s related fee interest and Permitted
Encumbrances;
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c.
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The
Mortgagor’s interest in such Ground Lease is assignable to the Purchaser
and its successors and assigns upon notice to, but without the consent of,
the lessor thereunder (or, if such consent is required, it has been
obtained prior to the Closing Date) and, in the event that it is so
assigned, is further assignable by the Purchaser and its successors and
assigns upon notice to, but without the need to obtain the consent of,
such lessor;
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d.
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Such
Ground Lease is in full force and effect, no notice of an event of default
has occurred thereunder and, to the Seller’s actual knowledge, there
exists no condition that, but for the passage of time or the giving of
notice, or both, would result in an event of default under the terms of
such Ground Lease;
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e.
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Such
Ground Lease, or an estoppel letter or other agreement, requires the
lessor under such Ground Lease to give notice of any default by the lessee
to the mortgagee, provided that the mortgagee has provided the lessor with
notice of its lien in accordance with the provisions of such Ground Lease,
and such Ground Lease, or an estoppel letter or other agreement, further
provides that no notice of termination given under the Ground Lease is
effective against the mortgagee unless a copy has been delivered to the
mortgagee;
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f.
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A
mortgagee is permitted a reasonable opportunity (including, where
necessary, sufficient time to gain possession of the interest of the
lessee under such Ground Lease) to cure any default under such Ground
Lease which is curable after the receipt of notice of any such default,
before the lessor thereunder may terminate such Ground
Lease;
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Exhibit C
– 2 – 6
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g.
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Such
Ground Lease has an original term (including any extension options set
forth therein) which extends not less than twenty years beyond the
maturity date of the related Mortgage
Loan;
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h.
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Under
the terms of such Ground Lease and the related Mortgage, taken together,
any related insurance proceeds, will be applied either to the repair or
restoration of all or part of the related Mortgaged Property, with the
mortgagee or a trustee appointed by it having the right to hold and
disburse such proceeds as the repair or restoration progresses (except in
such cases where a provision entitling another party to hold and disburse
such proceeds would not be viewed as commercially unreasonable by a
prudent commercial mortgage lender), or to the payment of the outstanding
principal amount of the Mortgage Loan together with any accrued interest
thereon, with, in some cases, the related Mortgagor being entitled to
receive proceeds in excess of the amount utilized to restore or repair the
Mortgaged Property;
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i.
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Such
Ground Lease requires the lessor to enter into a new lease with the Seller
or its successors or assigns in the event of a termination of the Ground
Lease by reason of a default by the Mortgagor under the Ground Lease,
including rejection of the Ground Lease in a bankruptcy proceeding;
and
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j.
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Such
Ground Lease does not impose restrictions on subletting portions of the
premised demised under the Ground Lease without the consent of the lessor
(except in the case where such consent cannot be unreasonably
withheld).
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31. Deed of Trust. If the related
Mortgage is a deed of trust, to the Seller’s actual knowledge, a trustee, duly
qualified under applicable law to serve as such, is properly designated and
serving under such Mortgage.
32. Lien Releases. The related
Mortgage Note or Mortgage does not require the holder thereof to release all or
any portion of the Mortgaged Property from the lien of the related Mortgage,
except upon payment in full of all amounts due under such Mortgage Loan which
have been allocated to such Mortgaged Property upon the payment of specified
release consideration, satisfaction of a debt service coverage ratio test and
subject to the satisfaction of certain customary criteria set forth in the
related loan agreement.
33. Origination of
Loans. Other than approved exceptions, each Mortgage Loan
complies with the Seller’s underwriting policies in all material respects effect
as of such loan’s origination date.
Exhibit C
– 2 – 7
34. Qualification To Do
Business. To the extent required under applicable law, the
originator of the Mortgage Note was authorized to transact and do business in
the jurisdiction where the Mortgaged Property is located while each was
holder.
35. Priority of Adjustable Rate
Loans. All terms of the loan documents pertaining to interest
rate adjustments, payment adjustments and principal balance adjustments are
enforceable and will not affect the priority of the mortgage
lien.
36. Assignability of Mortgage
Loans. The note and mortgage contain no provision limiting the
right or ability of the Seller to assign, transfer and convey the note or
mortgage to the Purchaser other than provisions that have been complied
with.
37. Due-on-Sale Clauses. Each
related Mortgage or loan agreement contains provisions for the acceleration of
the unpaid balance of such Mortgage Loan, if, without prior consent of lender or
satisfaction of certain conditions, the related Mortgaged Property or interest
therein is directly or indirectly transferred or sold or encumbered in
connection with subordinate financing.
38. Appraisal. The
Seller has obtained an Appraisal of the related Mortgaged Property within 12
months of the applicable Closing Date. As of the date of such
Appraisal, the Carrying Value of the related Mortgage did not exceed the value
of such Mortgaged Property as determined by such Appraisal.
Exhibit C
– 2 – 8
Exhibit
C-3
REPRESENTATIONS
AND WARRANTIES OF THE SELLER
REGARDING
ASSETS THAT ARE REO PROPERTIES
With
respect to the Assets that are REO Properties, as of the Closing Date (except as
may be specified in the representation and warranty and except for the
exceptions specifically agreed upon by the Purchaser in writing), the Seller
represents and warrants as to such Assets:
1. Ownership of
Assets. Immediately prior to the transfer thereof to the
Purchaser, the Seller has good and marketable title to, and is the sole
beneficial owner and holder of, such Assets, free and clear of any and all
liens, encumbrances and other interests on, in or to such Assets (pending
completion of Deed transfers after foreclosure sales and, in the case of each
REO Property that is a condominium unit, any rights of first refusal of the
related condominium associations; provided, however, that no such
right of first refusal shall affect the sale of the REO Property from the Seller
to the Purchaser) other than Permitted Encumbrances.
2. Authority to Transfer
Assets. The Seller has full right and authority to sell,
assign and transfer such Assets.
3. Asset List. The
information pertaining to such Assets set forth in the Asset List is true and
correct in all material respects as of the related Closing
Date.
4. Permitted
Encumbrances. Each REO Property is subject only to the
Permitted Encumbrances. The Permitted Encumbrances do not materially
adversely affect the value, use or operation of the REO
Property.
5. Condition of Property;
Condemnation. To the Seller’s actual knowledge, the REO Property is free
and clear of any damage that would materially adversely affect the value, use or
operation of the REO Property and the Seller has no actual knowledge of any
other fact(s) relating to the physical condition of the REO Property, which in
the Seller’s reasonable judgment has or could reasonably be expected to
materially adversely affect the value, use or operation of the REO
Property. There are no pending proceedings, and the Seller has not
received any notice of any threatened proceedings, for the condemnation, eminent
domain or similar proceedings or actions affecting any material
portion of the REO Property.
6. Insurance. The
improvements upon the REO Property are insured against loss by a fire and
extended perils policy providing coverage against loss or damage included within
the “all risk
of physical loss” or the equivalent
thereof, in an amount (subject to a customary deductible) at least equal to 100%
of the full actual replacement cost or value of the improvements located on such
REO Property (exclusive of costs of excavations, foundations and underground
utilities and footings). If any portion of the improvements on the
REO Property are in an area identified in the Federal Register by the Federal
Emergency Management Agency as having “special flood hazards,” a flood insurance
policy meeting any requirements of the then current guidelines of the Federal
Insurance Administration is in effect with a generally acceptable insurance
carrier, in an amount representing coverage not less than the least of (1) the
full insurable actual cash value of such REO Property, (2) the maximum amount of
insurance available under the National Flood Insurance Act of 1968, as amended,
and (3) 100% of the full actual replacement cost or value of the improvements
located on such REO Property.
Exhibit C
– 3 – 1
7. Environmental Conditions. As
of the Closing Date, (i) there are no material adverse environmental conditions
or circumstances affecting such REO Property; (ii) no REO Property is subject to
a notice, Environmental Claim, request for information or order from or
agreement with a government authority or any other Person respecting the Release
or threatened Release of a Hazardous Substance; (iii) there has been no Release
of Hazardous Substances on, at or under any REO Property which would reasonably
be expected to result in the imposition of any material liability or any
Environmental Claim; (iv) there are no judicial or administrative proceedings or
any other Environmental Claims pending or threatened alleging any violation or
failure to comply with any Environmental Law, or with respect to any release of
any Hazardous Substance from any REO Property; and (v) the REO Property is not
subject to any removal or remediation of any Hazardous Substances or are subject
to notice to or approval from any governmental authority pertaining to
environmental matters. The REO Property complies with all applicable
laws, rules and regulations, including but not limited to those relating to
environmental matters, including but not limited to those relating to radon,
asbestos and lead paint and neither the Seller nor, to the Seller’s knowledge,
the mortgagor, has received any notice of any violation or potential violation
of such law;
8. Taxes and
Assessments. All real property taxes including supplemental or
other taxes, if any, government assessments, insurance premiums, water, sewer
and municipal charges, condominium or cooperative charges and assessments,
leasehold payments or ground rents, affecting or related to the REO Property,
which became due and payable on or before the Closing Date, have been paid by
the Seller. There are no delinquent taxes or governmental assessments
affecting the REO Property and the Seller is not currently contesting such taxes
or rollback of any taxes. For purposes of this representation and
warranty, real property taxes and assessments shall not be considered unpaid
until the date on which interest and/or penalties would be payable
thereon.
9. No Material
Encroachments. No improvement that was included for the
purpose of determining the Appraised Value of the related REO Property as of the
last appraisal lay outside the boundaries and building restriction lines of such
property, and no improvements on adjoining properties encroached upon such REO
Property. The improvements located on or forming part of such REO
Property comply in all material respects with applicable zoning laws and
ordinances (except to the extent that they may constitute legal nonconforming
uses).
Exhibit C
– 3 – 2
10. Licenses, Permits, Etc. All
licenses, permits and authorizations required by applicable laws for the use of
the REO Property as it is currently operated have been obtained and maintained
in accordance with applicable laws, except for such licenses, permits and
authorizations the failure of which to obtain would not materially adversely
affect the value, use or operation of the REO Property.
11. Litigation. To
the Seller’s actual knowledge, there are no pending actions, suits or
proceedings by or before any court or governmental authority against or
affecting any portion of the REO Property or the Seller’s rights therein, that,
if determined adversely to the owner, would materially adversely affect the
value, use or operation of the REO Property.
12. Eviction
Notices. Each eviction proceeding relating to an REO Property
has been properly commenced and the Seller is not aware of any valid defense or
counterclaim by anyone with respect thereto. The REO Property has
been serviced and maintained in compliance with all applicable laws and
regulations.
13. Type. Except as
reflected on the Asset Schedule, no REO Property is a cooperative nor a
hotel-condo unit.
14. Condominiums. Solely
with respect to REO Properties which are condominium units, (i) the Seller is
not a “sponsor” or a nominee of a
“sponsor” under any plan of
condominium organization affecting the unit and the ownership and sale of any
condominium unit will not violate any federal, state or local law or regulation
regarding condominiums or require registration, qualification or similar action
under such law or regulation, (ii) all condominium charges and assessment which
became due and payable on or before the Closing Date have been paid by the
Seller and (iii) the condominium declaration with respect to such REO Property
is in full force and effect.
15. Listing
Agreements. The Seller has provided Purchaser with a copy of
each listing agreement with any real estate broker with respect to the REO
Property. Each such listing agreement may be terminated without any
cost or expense to Purchaser.
16. Sale
Contracts. The Seller has not accepted or executed any
contract of sale with respect to the REO Property.
17. Agreements with Governmental
Authorities. The Seller has not entered into any unrecorded
commitment or agreement with any governmental authority affecting the REO
Property and which could reasonably be expected to have a material adverse
effect on the ownership, value or operation of the REO
Property.
18. Rights to
Purchase. There are no options, rights of first refusal or
similar rights in favor of any person or entity to purchase or otherwise acquire
the REO Property or any portion thereof or interest therein.
Exhibit C
– 3 – 3
19. Foreign
Person. The Seller is not a “foreign
person”
within the meaning of Section 1445(f) of the Internal Revenue Code of 1986, as
amended.
20. Personal
Property. The inventory of personal property related to the
REO Property, if any, as attached to the Bill of Sale will set forth a true and
correct inventory of all of such personal property to be conveyed by the Seller
to the Purchaser pursuant to the provisions of this Purchase
Agreement. Upon the execution and delivery of the Bill of Sale, all
of the Seller’s right, title and interest in and to such personal property will
be transferred to the Purchaser free and clear of all claims, demands, liens
(including inchoate liens) and interests of all parties whatsoever, except for
any liens approved by the Purchaser in writing. The Seller owns title
to all of the personal property related to the REO Property.
21. Separate Tax
Lot. The REO Property constitutes one or more separate tax
lots for real estate tax assessment purposes.
22. Violations. The
Seller has not received written notice of any uncured violation of record from a
governmental authority having jurisdiction over the REO Property concerning any
zoning, building, fire, life/safety or health code, regulation, ordinance,
statute or law applicable to the REO Property or any portion
thereof. Further, to the actual knowledge of the Seller there are no
violations of record of any applicable legal requirements affecting all or any
portion of the REO Property which would materially adversely affect the value,
use or operation of the REO Property.
23. Appraisal. The
Seller has obtained an Appraisal of the REO Property within 12 months of the
applicable Closing Date. As of the date of such Appraisal, the
Carrying Value of the REO Property did not exceed the value of such the REO
Property as determined by such Appraisal.
Exhibit
C – 3 – 4