ASSET PURCHASE AGREEMENT B YAND

Exhibit 2

CONFIDENTIAL

ASSET PURCHASE AGREEMENT

B Y AND BETWEEN

BANKFINANCIAL, F.S.B.

AND

CITIBANK, N.A.

D ATED AS OF M ARCH  10, 2011

TABLE OF CONTENTS

 

 

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (the “ Agreement ”), dated as of March 10, 2011, is being executed by and between BankFinancial, F.S.B., a federal savings bank (“ Purchaser ”) and Citibank, N.A., a national banking association (“ Seller ”).

WITNESSETH

WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and Purchaser desires to acquire and assume from Seller, all of the Purchased Assets and Assumed Obligations (each as defined below), all as more specifically provided herein; and

WHEREAS, in order to effect an orderly transition of the servicing of the Purchased Assets following Purchaser’s acquisition and assumption of the Purchased Assets and Assumed Obligations, Seller or an Affiliate has agreed to service the Mortgage Loans pursuant to the Interim Servicing Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings specified in this Section 1.1:

“ Action ” means any action, claim, suit, arbitration, alternative dispute resolution mechanism, complaint, inquiry, investigation, litigation or proceeding (judicial, administrative or arbitral) before any Governmental Body or arbitration or mediation authority.

“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one (1) or more intermediaries, controls, is controlled by or is under common control with, such Person and, for purposes of this definition, the term “ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by Contract or otherwise.

“ Ancillary Agreements ” means the Assignment and Assumption Agreement, Bill of Sale, the Interim Servicing Agreement and the Custodial Agreement.

“ Assignment and Assumption Agreement ” means the Assignment and Assumption Agreement to be delivered by Seller to Purchaser on the Closing Date, substantially in the form attached hereto as Exhibit A with respect to the Purchased Assets to transfer title to the Purchased Assets to Purchaser on a servicing released basis (subject to the provisions of the Interim Servicing Agreement) and by which Purchaser will assume the Assumed Obligations.

 

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“ Assignment of Assignment of Leases and Rents ” means, with respect to each Mortgage for which any assignment of leases and rents is separate from the Mortgage, an assignment of the assignment of leases and rents in recordable form.

“ Assignment of Mortgage ” means, with respect to each Mortgage, an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form.

“ Bill of Sale ” means the Bill of Sale to be delivered by Seller to Purchaser on the Closing Date, substantially in the form attached hereto as Exhibit B .

“ Business Day ” means any day of the year on which national banking institutions in the City of Chicago in the State of Illinois and the City of San Francisco in the State of California are open to the public for conducting business and are not required or authorized by applicable Law to close.

“ Closing ” means the consummation of the purchase and sale of the Purchased Assets and the assumption of the Assumed Obligations as provided herein.

“ Closing Date Statement ” means a statement, substantially in the form of Exhibit C , which sets out a good faith estimate of the aggregate Unpaid Principal Balances of the Mortgage Loans as of the Closing Date multiplied by the percentage reflected on the Purchase Price Adjustment Schedule.

“ Code ” means the Internal Revenue Code of 1986.

“ Contract ” means any contract, agreement, arrangement or commitment, including any indenture, note, bond, mortgage, loan, instrument, lease, plan or license, other than any contract, agreement, arrangement or commitment with an outside contractor, subcontractor or third-party vendor that Seller uses to conduct the administration or servicing of the Mortgage Loans such as tax and flood services.

“Credit File” means, with respect to each Mortgage Loan, original or copies of all documents, other than those documents constituting the Legal File with respect to the Mortgage Loan, maintained in connection with the origination of the Mortgage Loan, including, without limitation, the application for the Mortgage Loan, internal loan approvals and reviews, and if applicable, flood certifications, information and resolutions concerning any legal entity that is an obligor or guarantor under the Mortgage Loan or a grantor under the Mortgage, all reports issued in connection with any appraisals, property inspections, environmental inspections and flood determinations that have been performed with respect to the Mortgaged Property, any property management agreements, and all financial and operating statements, financial projections, occupancy reports, leases and rent rolls.

“Cross-Collateralized Mortgage Loan ” means any Mortgage Loan that is cross-collateralized to any other loan, except to another Mortgage Loan that is a Purchased Asset.

“ Custodial Agreement” means a custodial agreement in the form attached hereto as Exhibit G .

 

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“ Cut-off Date ” means March 7, 2011.

“ Disclosure Schedule ” means the Disclosure Schedule attached hereto.

“ Environmental Law ” means any applicable Law relating to the protection of the environment or natural resources or human health as related thereto, including the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Clean Water Act, the Clean Air Act, the Toxic Substances Control Act and the Federal Insecticide, Fungicide and Rodenticide Act.

“ Estimated Purchase Price ” means an amount in cash equal to $149,386,995.26

“ Federal Funds Rate ” means the offered rate as reported in The Wall Street Journal in the “Money Rates” section for reserves traded among commercial banks for overnight use in amounts of one million dollars ($1,000,000.00) or more or, if no such rate is published for a day, then the rate published for the immediately preceding Business Day on which such rate was published.

“ GAAP ” means generally accepted accounting principles in the United States.

“ Governmental Body ” means any government or governmental, administrative or regulatory body thereof or political subdivision thereof, or any governmental department, commission, board, bureau, agency or instrumentality or authority, whether foreign, federal, state or local, or any court or arbitrator (public or private).

“ Impound Amounts ” means, with respect to any Mortgage Loan, the amounts held by or on behalf of Seller for payment of Taxes, mortgage insurance premiums and fire and hazard insurance premiums, insurance loss and condemnation proceeds or any other amounts impounded, reserves held by or on behalf of Seller pursuant to the Mortgage or any other Mortgage Loan Document, together with any interest accrued thereon so reserved or impounded, and any amounts advanced by Seller with respect to the Mortgage Loans, which advances are ultimately reimbursable from the Mortgagor.

“ Indebtedness ” of any Person means, without duplication, the principal of and accrued and unpaid interest in respect of (i) indebtedness of such Person for money borrowed and (ii) indebtedness evidenced by notes or other similar instruments, the payment of which such Person is responsible or liable.

“ Intellectual Property Right ” means trade secrets, patents and patent applications, trade marks (whether registered or unregistered and including any goodwill acquired in such trade marks), service marks, trade names, business names, internet domain names, e-mail address names, copyrights (including but not limited to rights in computer software), moral rights, database rights, design rights, rights in know-how, rights in confidential information, rights in inventions (whether patentable or not) and all other intellectual property and proprietary rights (whether registered or unregistered, and any application for the foregoing), and all other equivalent or similar rights which may subsist anywhere in the world.

 

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“ Interim Servicing Agreement ” means the Interim Servicing Agreement in the form attached hereto as Exhibit D, dated and effective on the date of this Agreement.

“ IRS ” means the United States Internal Revenue Service and, to the extent relevant, the United States Department of Treasury.

“ knowledge of Seller ,” “ Seller’s knowledge ” or any other similar knowledge qualification in this Agreement means, except where otherwise expressly set forth below, the actual state of knowledge of the officers and employees of Seller responsible for the origination, underwriting or servicing of the Mortgage Loans, in each case without having an affirmative duty to conduct a new, independent inquiry into the relevant subject except as expressly set forth herein.

“ Law ” means any foreign, federal, state, provincial or local law, statute, code, ordinance, rule regulation or Order.

“ Legal File ” means, with respect to each Mortgage Loan, the following documents:

(1) the original Mortgage Note (including all riders, amendments, allonges and addenda), endorsed thereon or by allonge “Pay to the order of BankFinancial, F.S.B., without recourse,” and signed in the name of Seller by a duly authorized officer of Seller (which endorsement shall contain an original signature of an authorized officer of the Seller, and if in the form of an allonge, the allonge shall be stapled to the Mortgage Note, with each endorsement appearing in chronological order); provided that (A) with respect to the Mortgage Loans identified in the Lost Note Schedule , Lost Note Affidavits in the form of Exhibit E may be delivered in lieu of the original Mortgage Notes; and (B) if the Mortgage Loan was acquired by Seller in its merger with CITIBANK, F.S.B., then the endorsement must be made as provided above in the name of “CITIBANK, N.A., a national banking association, successor by merger to CITIBANK, F.S.B.” The endorsements of the Mortgage Note shall establish, to Purchaser’s satisfaction, a complete chain of title from the originator of the Mortgage Loan to Seller;

(2) The original or a true and correct copy of the recorded Mortgage, with evidence of recording thereon, and an original Assignment of Mortgage from Seller to Purchaser acceptable to Purchaser in form and substance; provided that if the Mortgage Loan was acquired by Seller in its merger with CITIBANK, F.S.B., then the Assignment of Mortgage must be made in the name of “CITIBANK, N.A., a national banking association, successor by merger to CITIBANK, F.S.B.” Any intervening assignments of the Mortgage shall establish, to Purchaser’s satisfaction, a complete chain of title from the originator of the Mortgage Loan to Seller;

(3) The original of the recorded Assignment of Leases and Rents (if separate from the Mortgage), with evidence of recording thereon, and an original assignment of the Assignment of Leases and Rents from Seller to Purchaser in form and substance acceptable for recording; provided that if the Mortgage Loan was acquired by Seller in its merger with CITIBANK, F.S.B., then the assignment of the Assignment of Rents and Leases must be made in the name of “CITIBANK, N.A., a national banking

 

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association, successor by merger to CITIBANK, F.S.B.” Any intervening assignments of the Assignment of Leases and Rents shall establish, to Purchaser’s satisfaction, a complete chain of title from the originator of the Mortgage Loan to Seller;

(4) If a Mortgage Note is guaranteed by one or more Persons, the original or a true and correct copy of the guaranty or guaranties;

(5) If a Mortgage Note is secured by a security interest in personal property, either directly or indirectly through a security interest granted in connection with a guaranty, the original security agreement or pledge agreement granting the security interest (if separate from the Mortgage), a copy of the UCC-1 financing statement that was filed and any continuations thereof, and if the UCC-1 financing statement is current, an original UCC-3 assignment showing Purchaser as the new secured party.

(6) Originals or a true and correct copy of all assumption and/or modification or other amendment agreements, if any, relating to the Mortgage Note, Mortgage, Assignment of Leases and Rents, guaranty, security agreement or pledge agreement, unless such assumption, modification or amendment is evident from such document or the other documents delivered pursuant hereto;

(7) In the case of any Mortgaged Property that is held in trust, a true and correct copy of the trust agreement, the original and a facsimile of the collateral assignment of beneficial interest and trustee acceptance, if any, with evidence of recording thereon and originals or true and correct copies all trustee directions and other related documents;

(8) The original or a true and correct copy of all other documents evidencing or securing each Mortgage Loan;

(9) The original of any non-recourse agreement, if any, for each Mortgage Loan or a true and correct copy thereof;

(10) The original of any subordination agreement, if any, for each Mortgage Loan or a true and correct copy thereof;

(11) The original or a true and correct the mortgagee title insurance policy;

(12) The original or a true and correct copy of the property and casualty insurance policy and any flood insurance policy applicable to the Mortgage Loan, with evidence that such policy contains a mortgagee clause, is currently in force and the premiums due thereon are current;

(13) For Mortgage Loans that were acquired by Seller in a merger or were originated or acquired by Seller under another name, a certificate or other evidence of the merger or change of name, signed or stamped by the applicable regulatory authority; and

 

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(14) An electronic transmittal document checklist for each Mortgage Loan that identifies whether the documents consist of an original or copy.

(15) In the case of any Mortgage Loan for which an original guaranty, security or pledge agreement, assignment, assumption, amendment, non-recourse or subordination agreement, assignment of beneficial interest or any other operative legal document relating to the Mortgage Loan is lost or missing, Seller shall execute and deliver to Purchaser, upon Purchaser’s request, a Lost Loan Document Affidavit in the form of Exhibit F, provided that Purchaser shall be responsible for the preparation of the Lost Loan Document Affidavits.

“ Liability ” means any debt, liability or obligation (whether direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due), and including all costs and expenses relating thereto.

“ Lien ” means any lien, encumbrance, equity, pledge, mortgage, deed of trust, participation interest, security interest, claim, lease, charge, option, right of first refusal, easement, servitude or transfer restriction or any other security interest of any nature.

“ Loan Document Inventory Schedule ” means the Loan Document Inventory Schedule attached hereto.

“ Lost Note Schedule ” means the Lost Note Schedule attached hereto.

“ Material Adverse Effect ” means an event, occurrence, change or event which has had or would reasonably be expected to have a material adverse effect (whether from one or more events, circumstances, changes or effects) on (1) any of the Purchased Assets taken as a whole or (2) the ability of Seller to consummate the transactions contemplated by this Agreement, except in each case any such effect resulting from or arising in connection with (A) this Agreement or the transactions contemplated hereby, (B) changes or conditions affecting the market for commercial real estate generally, (C) changes in applicable Law, (D) changes in availability of financing generally, prevailing interest rates or economic, market, credit market, or securities market conditions (including market price and trading volume fluctuations), (E) changes in GAAP or changes in regulatory or political conditions generally, or (F) acts of war, sabotage, terrorism or natural disasters.

“ Monthly Payment ” means the scheduled monthly payment of principal and interest on a Mortgage Loan.

“ Mortgage ” means the mortgage or deed of trust securing a Mortgage Note, which creates a Lien on an estate in real property that secures the Mortgage Note.

“ Mortgage Interest Rate ” means the annual rate of interest provided for in and calculated on a Mortgage Note.

“ Mortgage Loan ” means a loan set forth on the Mortgage Loan Schedule (Cut-off Date) ; provided that any Mortgage Loan that has been prepaid in full on or prior to the Closing and yet is listed in the Mortgage Loan Schedule or any Mortgage Loan that has been removed

 

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from the portfolio by mutual agreement and is listed on the Mortgage Loan Schedule shall be deemed deleted from the Mortgage Loan Schedule and shall not be purchased by Purchaser or considered a Mortgage Loan or Purchased Assets for purposes of this Agreement and the Ancillary Agreements.

“ Mortgage Loan Documents ” means, with respect to each Mortgage Loan, the Legal File, the Credit File and any other documents or instruments evidencing, securing or otherwise executed and delivered in favor of the lender with respect to a Mortgage Loan.

“ Mortgage Loan Schedule (Cut-Off Date) ” means the data tape dated as of the Cut-off Date and delivered to Purchaser prior to the date hereof, identified as the Mortgage Loan Schedule (Cut-Off Date), and incorporated herein and attached hereto, which contains for each Mortgage Loan the following fields of information:

(1) the Mortgage Loan number;

(2) the address, city, state and zip code of the Mortgaged Property or Properties;

(3) the current Mortgage interest rate;

(4) the current Monthly Payment;

(5) the scheduled maturity date;

(6) the unpaid principal balance of the Mortgage Loan;

(7) the due date.

(8) the Mortgage Loan term;

(9) the monthly payment date;

(10) the payment type;

(11) the current interest accrual method;

(12) the Impound Amounts;

(13) Mortgage Loan Lien position;

(14) any late fees or other fees due and owing; and

(15) any amounts advanced by Seller in excess of the original loan amount.

“ Mortgage Loan Schedule (Closing Date) ” means the data tape of the Mortgage Loans, updated as of the Closing Date, containing the same fields as are contained in the Mortgage Loan Schedule (Cut-Off Date) and delivered to Purchaser in accordance with Section 3.3(b).

 

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“ Mortgage Note ” means, in respect of any Mortgage Loan, the original note evidencing the Indebtedness of a Mortgagor secured by a Mortgage.

“ Mortgaged Property ” means the real property, consisting of the land and/or improvements thereon, securing repayment of the debt evidenced by a Mortgage Note.

“ Mortgagor ” means the obligor of a Mortgage Note, including any Person that has acquired the related Mortgaged Property and assumed the obligations of the original obligor under the Mortgage Note.

“ Order ” means any order, injunction, judgment, decree, ruling, writ, assessment or arbitration award of a Governmental Body.

“ Permits ” means any approvals, authorizations, waiver, consents, licenses, permits or certificates of an applicable Person.

“ Person ” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Body or other entity.

“ Pre-Closing Tax Period ” means (1) any taxable period ending on or before the Closing Date and (2) with respect to a taxable period that commences before but ends after the Closing Date, the portion of such period up to and including the Closing Date.

“ Post-Closing Tax Period ” means (1) any taxable period that commences after the Closing Date and (2) with respect to a taxable period that commences before but ends after the Closing Date, the portion of such period after the Closing Date.

“ Purchase Price ” means the Estimated Purchase Price adjusted as provided in the Purchase Price Adjustment Schedule.

“Purchase Price Adjustment Schedule” means the Purchase Price Adjustment Schedule attached hereto.

“ Related Loan Assets ” means, in respect of any Mortgage Loan:

(1) All monies paid or payable or received or receivable on or in respect of such Mortgage Loan to the extent they become due from and after the Closing Date, including in respect of unpaid principal, accrued and unpaid interest (including accrued interest not yet due and payable as of the Closing Date), assessed and uncollected fees;

(2) All right, title and interest in all security instruments and the Liens created thereunder related to such Mortgage Loan and any property obtained (including the right to receive future liquidation proceeds) through the enforcement after the Closing Date of such security instrument or Lien;

 

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(3) All of Seller’s interest and benefits in, to, and under all endorsements, warranties, and guaranties by or of others held by Seller with respect to such Mortgage Loan;

(4) The Mortgage Loan Documents relating to such Mortgage Loan;

(5) All material internal memoranda of Seller solely related to such Mortgage Loan;

(6) Subject to the Interim Servicing Agreement, all Servicing Rights related to such Mortgage Loan; and

(7) All of the rights and benefits of Seller under each and every existing insurance policy relating to such Mortgage Loan; and all pending insurance claims and all claims filed in the future, if any; the proceeds thereof, and the insurance premium refunds, if any, in connection with any of such Mortgage Loan, in each case received from and after the Closing Date.

“ Repurchase Price ” means, with respect to any Mortgage Loan, an amount in cash equal to the sum of (i) the unpaid principal balance of such Mortgage Loan as shown on the Mortgage Loan Schedule (Cut-off Date) , as updated on the Final Closing Statement multiplied by the Purchase Price (expressed as a percentage of par) used by Purchaser when originally purchasing the Mortgage Loan, plus (ii) accrued interest at a rate equal to the rate of interest charged under the Mortgage Note from the date of the last paid monthly installment through the end of the month following the month in which the repurchase occurs (as applicable, the “ Accrual Period ”), minus (iii) the total of principal, interest, and fees collected in respect of such Mortgage Loan after the Closing Date, plus (iv) the negative escrow balance existing at the time of repurchase of such Mortgage Loan, if any, minus (v) an amount equal to the positive escrow balance existing at the time of repurchase of such Mortgage Loan, if any, minus (vi) the servicing fee for the Accrual Period attributable to the Mortgage Loan, if any. In lieu of paying Seller the amount of any positive escrow balance, Purchaser may arrange to transfer the positive escrow balance to Seller.

“ Servicing Rights ” means, with respect to the Mortgage Loans, the rights and obligations to administer, collect the payments for the reduction of principal and application of interest, collect payments on account of Taxes and insurance, pay Taxes and insurance, remit collected payments, modify, waive or amend any terms or provisions of the applicable Mortgage Loan Documents (subject to all applicable lender consents permitted thereunder), provide portfolio management, foreclosure and default management services, provide full Impound Amount administration and any other obligations with respect to or in connection with such Mortgage Loans, together with:

(1) The rights to any Impound Amounts (subject to the Interim Servicing Agreement);

(2) The rights in all documents or Contracts creating, defining or evidencing any such servicing rights to the extent they relate to such servicing rights and all rights of a Seller thereunder;

 

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(3) Any and all documents (including servicing files, servicing documents, servicing records and servicing system data on the applicable Transfer Date) or other information pertaining to such Mortgage Loans or pertaining to the past, present or prospective servicing of Mortgage Loans; and

(4) The right to receive any fees arising from or connected to any of the foregoing in connection with such Mortgage Loans, and all rights, powers and privileges incident to any of the foregoing.

“ Tax ” or “ Taxes ” means any and all federal, state, local or foreign taxes, charges, fees, imposts, levies or other like assessments of any kind whatsoever, including all income, gross receipts, capital, sales, use, ad valorem , value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation, property, alternative or add-on minimum and estimated taxes or all interest, penalties, fines, related liabilities or additions to tax imposed by any Taxing Authority in connection with any item described above.

“ Tax Return ” means any return, declaration, report or similar statement required to be filed with respect to any Tax (including any attached schedules), including any information return, claim refund, amended return and declaration of estimated Tax.

“ Taxing Authority ” means the IRS and any other Governmental Body responsible for the administration of any Tax.

“ Transfer Date ” means, with respect to each Mortgage Loan, the date on which Purchaser or its designee undertakes directly the servicing and portfolio management obligations with respect to such Mortgage Loan, all subject to and as more particularly provided in the Interim Servicing Agreement.

“ Unpaid Principal Balance ” means, with respect to any Mortgage Loan on any date, the unpaid principal balance of such Mortgage Loan, not including any accrued but unpaid interest or accrued but unpaid fees, expenses or other reimbursable amounts; provided for the avoidance of doubt that no loss reserves existing on the books of Seller in connection with such Mortgage Loan shall be taken into account in determining the Unpaid Principal Balance of any Mortgage Loan.

1.2 Terms Defined Elsewhere in this Agreement. For purposes of this Agreement, the following terms have meanings set forth in the sections indicated:

 

 

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1.3 Other Definitional and Interpretive Matters.

(a) Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

(i) Calculation of Time Period . When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day. Unless otherwise specified, a reference to any day or date shall refer to the open of business on such day or date.

(ii) Exhibits/Schedules . The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an integral part of this Agreement, and any capitalized terms used in any Schedule or Exhibit but not otherwise

 

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defined therein shall be defined as set forth in this Agreement.

(iii) Gender/Number . Any reference to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa .

(iv) Headings . The provision of a Table of Contents; the division of this Agreement into Articles, Sections and other subdivisions; and the insertion of headings, are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.

(v) Articles; Sections . All references in this Agreement to any “Article” or “Section” are to the corresponding Article or Section of this Agreement unless otherwise specified.

(vi) Including . The word “including” or any variation thereof means (unless otherwise specified) “including, without limitation” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

(vii) Legislation . Any references to legislation (including subordinate legislation) is to that legislation as amended, re-enacted or replaced, and includes any rules, regulations and official guidance promulgated thereunder.

(viii) Documents/Agreements . Any references to a document (including this Agreement or any Mortgage Loan Document) or agreement, or a provision of a document (including this Agreement) or other agreement, is to that document, agreement or provision as amended, supplemented, replaced or novated.

(ix) Executors/Administrators/Successors . References to a particular Person includes a reference to the Person’s executors, administrators, successors, substitutes (including Persons taking by novation) and assigns.

(x) Standards of Conduct . Phrases such as “prudent institutional commercial mortgage lenders,” “prudent institutional multifamily mortgage lenders” or any phrases of similar import shall be measured by reference to the industry standards generally in effect as of the date the related representation or warranty relates to or is made.

(b) Negotiated Transaction . The parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.

 

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ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF OBLIGATIONS

2.1 Purchase and Sale of Assets.

Except as otherwise provided below, upon the terms and subject to the conditions set forth in this Agreement, at the Closing Purchaser shall purchase, acquire and accept from Seller, and Seller shall sell, transfer, assign, convey and deliver to Purchaser, all of Seller’s right, title and interest in, to and under the Purchased Assets. The term “ Purchased Assets ” shall mean the following assets of Seller as of the Closing:

(a) all Mortgage Loans; and

(b) all Related Loan Assets.

2.2 Excluded Assets.

Nothing herein contained shall be deemed to sell, transfer, assign or convey the Excluded Assets to Purchaser, and Seller shall retain all right, title and interest to, in and under the Excluded Assets. The term “ Excluded Assets ” shall mean all assets, properties, interests and rights of Seller other than the Purchased Assets and shall include:

(a) all minute books, organizational documents, stock registers and such other books and records of Seller as pertain to ownership, organization or existence of Seller;

(b) all internal memoranda of Seller or any of its agents not included in the definition of Purchased Assets;

(c) all Intellectual Property Rights of Seller;

(d) all Tax Returns and any claim, right or interest of Seller in or to any refund, rebate, abatement or other recovery for Taxes in each case relating to the business of Seller or the Purchased Assets for all Pre-Closing Tax Periods, together with any interest due thereon or penalty rebate arising therefrom;

(e) all privileged or confidential communications between Seller and its attorneys, and any other privileged documents; and

(f) all documents of Seller relating to the sale, pricing, or valuation of the Mortgage Loans (other than appraisals performed on Mortgaged Property that are included in a Credit File)).

2.3 Assumption of Obligations.

On the terms and subject to the conditions set forth in this Agreement and the terms and conditions of the Interim Servicing Agreement, and subject further to Section 2.4, at the Closing Purchaser shall assume, effective at the Closing, and shall timely perform, pay and discharge in accordance with their respective terms, all debts, obligations, contracts and liabilities of any

 

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kind, character or description (whether known or unknown, accrued, absolute, contingent or otherwise) of Seller: (a) arising out of the Mortgage Loans or Related Loan Assets, including those obligations of Seller arising under the Mortgage Documents, or (b) for Taxes that Purchaser has specifically agreed to assume pursuant to Section 9.1 (collectively, the “ Assumed Obligations ”).

2.4 Excluded Liabilities.

Purchaser shall not assume or be liable for any Excluded Liabilities. The term “ Excluded Liabilities ” shall mean all Liabilities of Seller or any of its Affiliates other than the Assumed Obligations and shall include:

(a) all Liabilities to the extent arising out of or relating to the Excluded Assets;

(b) all Liabilities to the extent arising from or relating to the breach by Seller of any Mortgage Loan Document prior to the Closing Date, the failure of Seller to service any Mortgage Loan in accordance with its obligations prior to the Closing Date or the acts, omissions, misconduct or breach of Seller or any Person acting on behalf of Seller or any of Seller’s Affiliates prior to the Closing Date in connection with any Mortgage Loan, any Mortgage Loan Documents, or any trust agreement that is subject to Section 7.4 of this Agreement;

(c) all Liabilities for Taxes arising from or relating to the Purchased Assets for all Pre-Closing Tax Periods; and

(d) all fees and expenses of Seller or its Affiliates in connection with the sale of the Purchased Assets, whether arising prior to, on or after the Closing Date (other than under the Interim Services Agreement).

2.5 Further Conveyances, Assumptions and Assurances

(a) Any and all interest, fees and other payments in respect of the Mortgage Loans received by Seller after the Closing Date by or on behalf of Seller from or on behalf of a Mortgagor with respect to any Mortgage Loan shall be remitted, applied or disbursed by Seller in accordance with the terms of the Interim Servicing Agreement.

(b) From time to time following the Closing, Seller and Purchaser shall execute, acknowledge and deliver all such further conveyances, notices, assumptions, releases and such other similar instruments and shall take such further actions, as may be reasonably necessary or appropriate to transfer and convey fully to Purchaser all of the rights, title and interests intended to be conveyed to Purchaser under this Agreement, the Assignme