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Sample Business ContractsHome: Sample Business Contracts:
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MASTER REPURCHASE AGREEMENT
Dated as of December 14, 2005
Among:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., as Buyer,
AMERICAN HOME MORTGAGE CORP., as Seller
AMERICAN HOME MORTGAGE ACCEPTANCE, INC., as Seller
and
AMERICAN HOME MORTGAGE INVESTMENT CORP., as Seller
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TABLE OF CONTENTS
1. APPLICABILITY............................................................1
2. DEFINITIONS AND ACCOUNTING MATTERS.......................................1
3. THE TRANSACTIONS........................................................15
4. PAYMENT AND TRANSFER....................................................18
5. TAXES; TAX TREATMENT....................................................18
6. MARGIN MAINTENANCE......................................................19
7. INCOME PAYMENTS.........................................................20
8. SECURITY INTEREST; BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT..............20
9. CONDITIONS PRECEDENT....................................................23
10. RELEASE OF PURCHASED LOANS..............................................26
11. RELIANCE................................................................26
12. REPRESENTATIONS AND WARRANTIES..........................................27
13. COVENANTS OF SELLER.....................................................31
14. REPURCHASE DATE PAYMENTS/COLLECTIONS....................................38
15. REPURCHASE OF PURCHASED LOANS...........................................38
16. SUBSTITUTION............................................................39
17. ACCELERATION OF REPURCHASE DATE.........................................39
18. EVENTS OF DEFAULT.......................................................39
19. REMEDIES................................................................42
20. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE...............................45
21. NOTICES AND OTHER COMMUNICATIONS........................................45
22. USE OF EMPLOYEE PLAN ASSETS.............................................45
23. INDEMNIFICATION AND EXPENSES............................................45
24. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS..............................47
25. FURTHER ASSURANCES......................................................47
26. TERMINATION.............................................................47
27. SEVERABILITY............................................................47
28. BINDING EFFECT; GOVERNING LAW...........................................47
29. AMENDMENTS..............................................................47
30. SUCCESSORS AND ASSIGNS..................................................48
31. SURVIVAL................................................................48
32. CAPTIONS................................................................48
33. COUNTERPARTS............................................................48
34. SUBMISSION TO JURISDICTION; WAIVERS.....................................48
35. WAIVER OF JURY TRIAL....................................................49
36. ACKNOWLEDGEMENTS........................................................49
37. HYPOTHECATION OR PLEDGE OF PURCHASED ITEMS..............................49
38. ASSIGNMENTS; PARTICIPATIONS.............................................49
39. SINGLE AGREEMENT........................................................50
40. INTENT..................................................................50
41. CONFIDENTIALITY.........................................................51
42. SERVICING...............................................................51
43. PERIODIC DUE DILIGENCE REVIEW...........................................52
44. SET-OFF.................................................................53
45. JOINT AND SEVERAL LIABILITY; CROSS-DEFAULT..............................53
46. ENTIRE AGREEMENT........................................................53
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SCHEDULES
SCHEDULE 1 Representations and Warranties re: Loans
SCHEDULE 2 Filing Jurisdictions and Offices
SCHEDULE 3 Relevant States
SCHEDULE 4 Subsidiaries
EXHIBITS
EXHIBIT A Forms of Monthly and Quarterly Certifications
EXHIBIT B Form of Custodial Agreement
EXHIBIT C Form of Opinion of Counsel to the Seller
EXHIBIT D Form of Notice of Transaction Notice
EXHIBIT E Underwriting Guidelines
EXHIBIT F Required Fields for Servicing Transmission
EXHIBIT G Required Fields for Loan Data Transmission
EXHIBIT H Form of Market Value Certificate
EXHIBIT I Form of Confidentiality Agreement
EXHIBIT J Form of Instruction Letter
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MASTER REPURCHASE AGREEMENT, dated as of December 14, 2005, among
American Home Mortgage Corp., a New York corporation, American Home Mortgage
Acceptance, Inc., a Maryland corporation, and American Home Mortgage Investment
Corp., a Maryland corporation, each, and jointly and severally, as seller
("Seller") and Greenwich Capital Financial Products, Inc., a Delaware
corporation ("Buyer", which term shall include any "Principal" as defined and
provided for in Annex I), or as agent pursuant hereto ("Agent").
1. APPLICABILITY
Buyer may, from time to time, upon the terms and conditions set forth
herein, agree to enter into transactions in which Seller transfers to Buyer
Eligible Loans against the transfer of funds by Buyer, with a simultaneous
agreement by Buyer to transfer to Seller Purchased Loans at a date certain,
against the transfer of funds by Seller. Each such transaction shall be referred
to herein as a "Transaction", and, unless otherwise agreed in writing, shall be
governed by this Agreement.
2. DEFINITIONS AND ACCOUNTING MATTERS
(a) Defined Terms. As used herein, the following terms have the
following meanings (all terms defined in this Section 2 or in other provisions
of this Agreement in the singular to have the same meanings when used in the
plural and vice versa):
"Accepted Servicing Practices" shall mean with respect to any Loan,
those accepted and prudent mortgage servicing practices (including collection
procedures) of prudent mortgage lending institutions which service mortgage
loans of the same type as the Loans in the jurisdiction where the related
Mortgaged Property is located, and which are generally in accordance with Fannie
Mae servicing practices and procedures for MBS pool mortgages, as defined in the
Fannie Mae servicing guides including future updates, and in a manner at least
equal in quality to the servicing the Seller or Seller's designee provides to
mortgage loans which they own in their own portfolio.
"Additional Purchased Loans" shall have the meaning specified in
Section 5(a) hereof.
"Adjustable Rate Loan" shall mean a Loan which provides for the
adjustment of the Mortgage Interest Rate payable in respect thereto.
"Adjustment Date" shall mean with respect to each Adjustable Rate Loan,
the date set forth in the related Note on which the Mortgage Interest Rate on
the Loan is adjusted in accordance with the terms of the Note.
"Affiliate" shall mean, with respect to any Person, any other Person
which, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" (together
with the correlative meanings of "controlled by" and "under common control
with") means possession, directly or indirectly, of the power (a) to vote 10% or
more of the securities (on a fully diluted basis) having ordinary voting power
for the directors or managing general partners (or their equivalent) of such
Person, or (b) to direct or cause the direction of the management or policies of
such Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Agent" shall mean Buyer or any successor.
"Agreement" shall mean this Master Repurchase Agreement (including all
exhibits, schedules and other addenda hereto or thereto), as supplemented by the
Pricing Side Letter, as it may be amended, further supplemented or otherwise
modified from time to time.
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"ALTA" shall mean the American Land Title Association.
"Applicable Margin" shall have the meaning set forth in the Pricing
Side Letter.
"Appraised Value" shall mean the value set forth in an appraisal made
in connection with the origination of the related Loan as the value of the
Mortgaged Property (or the related Cooperative Unit in the case of a Cooperative
Loan).
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the assignment of the Mortgage
to Buyer.
"Attorney Bailee Letter" shall have the meaning assigned to such term
in the Custodial Agreement.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978,
as amended from time to time.
"Best's" shall mean Best's Key Rating Guide, as the same shall be
amended from time to time.
"Business Day" shall mean any day other than (i) a Saturday or Sunday,
(ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New
York, the Custodian or banking and savings and loan institutions in the State of
New York or Connecticut or the City of New York or the city or state in which
the Custodian's offices are located are closed, or (iii) a day on which trading
in securities on the New York Stock Exchange or any other major securities
exchange in the United States is not conducted.
"Capital Lease Obligations" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"Cash Equivalents" shall mean (a) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of deposit
and eurodollar time deposits with maturities of 90 days or less from the date of
acquisition and overnight bank deposits of any commercial bank having capital
and surplus in excess of $500,000,000, (c) repurchase obligations of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than seven days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d) commercial
paper of a domestic issuer rated at least A-1 or the equivalent thereof by
Standard and Poor's Ratings Group ("S&P") or P-1 or the equivalent thereof by
Moody's Investors Service, Inc. ("Moody's") and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's, (f) securities with maturities of 90
days or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition, or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
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"Change of Control" shall mean the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of outstanding shares of voting stock of such
Person at any time if after giving effect to such acquisition (i) such Person or
Persons owns twenty percent (20%) or more of such outstanding voting stock or
(ii) American Home Mortgage Investment Corp. does not own directly or indirectly
more than fifty percent (50%) of such outstanding voting stock.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collection Account" shall mean the following account established by
the Seller in accordance with Section 13(ii) for the benefit of Buyer,
"Greenwich Capital Financial Products, Inc. - P&I account - Account # _______".
"Combined Loan-to-Value Ratio" or "CLTV" shall mean with respect to any
Loan, the ratio of (i) the original outstanding principal amount of the Loan and
any other loan which is secured by a lien on the related Mortgaged Property to
(ii) the lesser of (a) the Appraised Value of the Mortgaged Property at
origination of such Loan, or (b) if the Mortgaged Property was purchased within
twelve (12) months of the origination of the Loan, the purchase price of the
Mortgaged Property.
"Confirmation" shall have the meaning assigned thereto in Section 3(a)
hereof.
"Contractual Obligation" shall mean as to any Person, any material
provision of any agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound or any material
provision of any security issued by such Person.
"Cooperative Corporation" shall mean with respect to any Cooperative
Loan, the cooperative apartment corporation that holds legal title to the
related Cooperative Project and grants occupancy rights to units therein to
stockholders through Proprietary Leases or similar arrangements.
"Cooperative Loan" shall mean a Loan that is secured by a First Lien on
and perfected security interest in Cooperative Shares and the related
Proprietary Lease granting exclusive rights to occupy the related Cooperative
Unit in the building owned by the related Cooperative Corporation.
"Cooperative Project" shall mean, with respect to any Cooperative Loan,
all real property and improvements thereto and rights therein and thereto owned
by a Cooperative Corporation including without limitation the land, separate
dwelling units and all common elements.
"Cooperative Shares" shall mean, with respect to any Cooperative Loan,
the shares of stock issued by a Cooperative Corporation and allocated to a
Cooperative Unit and represented by a stock certificate.
"Cooperative Unit" shall mean, with respect to a Cooperative Loan, a
specific unit in a Cooperative Project.
"Custodial Agreement" shall mean the Custodial Agreement, dated as of
December 14, 2005, among Seller, Buyer, and Custodian as the same shall be
modified and supplemented and in effect from time to time.
"Custodian" shall mean Deutsche Bank Trust Company Americas, or its
successors and permitted assigns.
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"Custodian Loan Transmission" shall have the meaning assigned thereto
in the Custodial Agreement.
"Default" shall mean an Event of Default or any event, that, with the
giving of notice or the passage of time or both, would become an Event of
Default.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Dry Loan" shall mean a first or second lien Loan which is underwritten
in accordance with the Underwriting Guidelines and as to which the related
Mortgage File contains all required Loan Documents.
"Due Date" shall mean the day of the month on which the Monthly Payment
is due on a Loan, exclusive of any days of grace.
"Due Diligence Review" shall mean the performance by Buyer of any or
all of the reviews permitted under Section 44 hereof with respect to any or all
of the Loans or the Seller or related parties, as desired by Buyer from time to
time.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 9(a) have been satisfied.
"Electronic Tracking Agreement" shall mean the electronic tracking
agreement among Buyer, Seller, MERSCORP, Inc. and MERS, in form and substance
reasonably acceptable to Buyer to be entered into in the event that any of the
Loans become MERS Loans; provided that if no Loans are or will be MERS Loans,
all references herein to the Electronic Tracking Agreement shall be disregarded.
"Electronic Transmission" shall mean the delivery of information in an
electronic format reasonably acceptable to the applicable recipient thereof. An
Electronic Transmission shall be considered written notice for all purposes
hereof (except when a request or notice by its terms requires execution).
"Eligible Loan" shall have the meaning assigned thereto in the Pricing
Side Letter.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which Seller is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which Seller is a
member.
"Escrow Letter" shall mean, with respect to any Wet Loan that becomes
subject to a Transaction before the end of the applicable rescission period, an
escrow agreement or letter, which is fully assignable to the Buyer, stating that
in the event of a Rescission or if for any other reason the Loan fails to fund
on a given day, the party conducting the closing is holding all funds which
would have been disbursed on behalf of the Mortgagor as agent for and for the
benefit of the Buyer and such funds shall be returned to the Seller not later
than one Business Day after the date of Rescission or other failure of the Loan
to fund on a given day.
"Escrow Payments" shall mean, with respect to any Loan, the amounts
constituting ground rents, taxes, assessments, water charges, sewer rents,
municipal charges, mortgage insurance premiums, fire and
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hazard insurance premiums, condominium charges, and any other payments required
to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any
Note or Mortgage or any other document.
"Event of Default" shall have the meaning provided in Section 18
hereof.
"Exception" shall have the meaning assigned thereto in the Custodial
Agreement.
"Exception Report" shall mean the exception report prepared by the
Custodian pursuant to the Custodial Agreement.
"Fannie Mae" shall mean FannieMae, or any successor thereto.
"First Lien" shall mean with respect to each Mortgaged Property, the
lien of the mortgage, deed of trust or other instrument securing a mortgage note
which creates a first lien on the Mortgaged Property.
"Freddie Mac" shall mean Freddie Mac, or any successor thereto.
"GAAP" shall mean generally accepted accounting principles in effect
from time to time in the United States of America
"Governmental Authority" shall mean with respect to any Person, any
nation or government, any state or other political subdivision, agency or
instrumentality thereof, any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
court or arbitrator having jurisdiction over such Person, any of its
Subsidiaries or any of its properties.
"Gross Margin" shall mean with respect to each Adjustable Rate Loan,
the fixed percentage amount set forth in the related Note and the Loan Schedule
that is added to the Index on each Adjustment Date in accordance with the terms
of the related Note to determine the new Mortgage Interest Rate for such Loan.
"Guarantee" shall mean, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person or
otherwise protecting the holder of such Indebtedness against loss (whether by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, or to take-or-pay or otherwise), provided
that the term "Guarantee" shall not include (i) endorsements for collection or
deposit in the ordinary course of business, or (ii) obligations to make
servicing advances for delinquent taxes and insurance, or other obligations in
respect of a Mortgaged Property, to the extent reasonably required by the Buyer.
The amount of any Guarantee of a Person shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have
correlative meanings.
"Income" shall mean, with respect to any Purchased Loan at any time,
any principal and/or interest thereon and all dividends, sale proceeds
(including, without limitation, any proceeds from the securitization of such
Purchased Loan or other disposition thereof) and other collections and
distributions thereon (including, without limitation, any proceeds received in
respect of mortgage insurance), but not including any commitment fees,
origination fees and/or servicing fees accrued in respect of periods on or after
the initial Purchase Date with respect to such Purchased Loan.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to
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repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) Capital Lease Obligations of such Person; (f)
obligations of such Person under repurchase agreements or like arrangements; (g)
indebtedness of others Guaranteed by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; (i) indebtedness of general partnerships of which such Person is
a general partner; and (j) any other indebtedness of such Person by a note,
bond, debenture or similar instrument.
"Index" shall mean with respect to each Adjustable Rate Loan, the index
identified on the related Loan Schedule and set forth in the related Note for
the purpose of calculating the interest rate thereon.
"Instruction Letter" shall mean a letter agreement between Seller and
the Servicer, or any subservicer, if applicable, substantially in the form of
Exhibit J attached hereto, in which such Persons acknowledge the Buyer's
ownership interest in the Loans, and agree to remit any collections with respect
to the Loans as Buyer may so direct from time to time, which Instruction Letter
may be delivered by Buyer to such Servicer or subservicer, as applicable in its
sole discretion.
"Insurance Proceeds" shall mean with respect to each Loan, proceeds of
insurance policies insuring the Loan or the related Mortgaged Property.
"Insured Closing Letter" shall mean, with respect to any Wet Loan that
becomes subject to a Transaction before the end of the applicable rescission
period, a letter of indemnification from an Approved Title Insurance Company, in
any jurisdiction where insured closing letters are permitted under applicable
law and regulation, addressed to the Seller, which is fully assignable to the
Buyer, with coverage that is customarily acceptable to Persons engaged in the
origination of mortgage loans, identifying the Settlement Agent covered thereby,
which may be in the form of a blanket letter.
"Interest Rate Adjustment Date" means with respect to each Adjustable
Rate Loan, the date, specified in the related Note and the Loan Schedule, on
which the Mortgage Interest Rate is adjusted.
"Interest Rate Protection Agreement" shall mean with respect to any or
all of the Purchased Loans, any interest rate swap, cap or collar agreement or
any other applicable hedging arrangements providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies entered into by Seller and
reasonably acceptable to Buyer.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, including all rules and regulations promulgated thereunder.
"LIBO Base Rate" shall mean with respect to each day on which a
Transaction is outstanding (or if such day is not a Business Day, the next
succeeding Business Day), the rate per annum equal to the rate published by
Bloomberg or if such rate is not available, the rate appearing at page 3750 of
the Telerate Screen as one-month LIBOR on such date, and if such rate shall not
be so quoted, the rate per annum at which the Buyer is offered Dollar deposits
at or about 11:00 A.M., New York City time, on such date by prime banks in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange
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operations in respect of its Transactions are then being conducted for delivery
on such day for a period of one month and in an amount comparable to the amount
of the Transactions to be outstanding on such day.
"LIBO Rate" shall mean with respect to each Interest Period pertaining
to a Transaction, a rate (reset on a monthly basis) per annum determined by
Buyer in its sole discretion in accordance with the following formula (rounded
upwards to the nearest l/100th of one percent), which rate as determined by
Buyer shall be conclusive absent manifest error by Buyer:
LIBO Base Rate
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1.00 - LIBO Reserve Requirements
The LIBO Rate shall be calculated on each Purchase Date and Repurchase
Date commencing with the first Purchase Date.
"LIBO Reserve Requirements" shall mean for any Interest Period for any
Transaction, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements applicable to the Buyer in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction with
respect thereto), dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) maintained by a member bank of such Governmental Authority. As of
the Effective Date, the LIBO Reserve Requirements shall be deemed to be zero.
"Lien" shall mean any mortgage, lien, pledge, charge, security interest
or similar encumbrance.
"Loan" shall mean a mortgage loan or a Cooperative Loan which the
Custodian has been instructed to hold for the Buyer pursuant to the Custodial
Agreement, and which loan includes, without limitation, (i) a Note, the related
Mortgage and all other Loan Documents and (ii) all right, title and interest of
the Seller in and to the Mortgaged Property covered by such Mortgage.
"Loan Data Transmission" shall mean a computer tape or other electronic
medium generated by or on behalf of Seller and delivered or transmitted to the
Buyer and Custodian which provides information relating to the Purchased Loans,
including the information set forth in the Loan Schedule, in a format reasonably
acceptable to the Buyer.
"Loan Documents" shall have the meaning assigned thereto in the
Custodial Agreement.
"Loan List" shall mean the hard copy report provided by the Seller
which shall include with respect to each Loan to be included in a Transaction:
(i) the Loan number, (ii) the Mortgagor's name, (iii) the original principal
amount of the Loan, (iv) the current principal balance of the Loan and (v)
whether the Loan is a MERS Loan.
"Loan Schedule" shall mean a hard copy or electronic format
incorporating the fields identified on Exhibit G, any other information required
by Buyer and any other additional information to be provided pursuant to the
Custodial Agreement.
"Loan-to-Value Ratio" or "LTV" shall mean with respect to any Loan, the
ratio of the outstanding principal amount of such Loan at the time of
origination to the lesser of (a) the Appraised Value of the related Mortgaged
Property at origination of such Loan and (b) if the related Mortgaged Property
was purchased within twelve (12) months of the origination of such Loan, the
purchase price of the related Mortgaged Property.
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"Margin Call" shall have the meaning assigned thereto in Section 6(a)
hereof.
"Margin Deficit" shall have the meaning assigned thereto in Section
6(a) hereof.
"Market Value" shall mean the value, determined by the Buyer in its
sole reasonable discretion, of the Loans if sold in their entirety to a single
third-party purchaser. The Buyer's determination of Market Value shall be
conclusive upon the parties, absent manifest error on the part of the Buyer. The
Buyer shall have the right to mark to market the Loans on a daily basis which
Market Value with respect to one or more of the Loans may be determined to be
zero. The Seller acknowledges that the Buyer's determination of Market Value is
for the limited purpose of determining the value of Purchased Loans which are
subject to Transactions hereunder without the ability to perform customary
purchaser's due diligence and is not necessarily equivalent to a determination
of the fair market value of the Loans achieved by obtaining competing bids in an
orderly market in which the originator/servicer is not in default under a
revolving debt facility and the bidders have adequate opportunity to perform
customary loan and servicing due diligence. The Market Value shall be deemed to
be zero with respect to each Loan that is not an Eligible Loan.
"Master Netting Agreement" shall mean the letter agreement among Buyer
and Seller certain Affiliates and Subsidiaries of Buyer and/or Seller in form
and substance acceptable to Buyer and Seller to be entered into in the event
that Buyer and Seller agree; provided that if such agreement is not entered
into, all references herein to the Master Netting Agreement shall be
disregarded.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the property, business, operations or financial condition of the Seller, (b) the
ability of the Seller to perform in all material respects its obligations under
any of the Program Documents to which it is a party, (c) the validity or
enforceability in all material respects of any of the Program Documents, (d) the
rights and remedies of the Buyer under any of the Program Documents, (e) the
timely repurchase of the Purchased Loans or payment of other amounts payable in
connection therewith, or (f) the Purchased Items.
"Maximum Aggregate Purchase Price" shall mean $500,000,000, less any
amounts outstanding from time to time under any other financing, purchase, note
purchase, repurchase, gestation or similar facility entered into between the
Buyer (or any of its affiliates or subsidiaries) and the Seller (or any of their
affiliates or subsidiaries).
"Maximum Mortgage Interest Rate" shall mean with respect to each
Adjustable Rate Loan, a rate that is set forth on the related Loan Schedule and
in the related Note and is the maximum interest rate to which the Mortgage
Interest Rate on such Loan may be increased on any Adjustment Date.
"MERS" shall mean Mortgage Electronic Registration Systems, Inc., a
Delaware corporation, or any successor in interest thereto.
"MERS Identification Number" shall mean the eighteen digit number
permanently assigned to each MERS Loan.
"MERS Loan" shall mean any Loan as to which the related Mortgage or
Assignment of Mortgage has been recorded in the name of MERS, as agent for the
holder from time to time of the Note, and which is identified as a MERS Loan on
the related Loan List.
"Monthly Payment" shall mean the scheduled monthly payment of principal
and interest on a Loan as adjusted in accordance with changes in the Mortgage
Interest Rate pursuant to the provisions of the Note for an Adjustable Rate
Loan.
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"Mortgage" shall mean with respect to a Loan, the mortgage, deed of
trust or other instrument, which creates a First Lien or Second Lien (as
indicated on the Loan Data Transmission) on either (i) with respect to a Loan
other than a Cooperative Loan, the fee simple or leasehold estate in such real
property or (ii) with respect to a Cooperative Loan, the Proprietary Lease and
related Cooperative Shares, which in either case secures the Note.
"Mortgage File" shall have the meaning assigned thereto in the
Custodial Agreement.
"Mortgage Interest Rate" means the annual rate of interest borne on a
Note, which shall be adjusted from time to time with respect to Adjustable Rate
Loans.
"Mortgaged Property" shall mean the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other collateral securing repayment of the
debt evidenced by a Note.
"Mortgagee" shall mean the record holder of a Note secured by a
Mortgage.
"Mortgagor" shall mean the obligor or obligors on a Note, including any
person who has assumed or guaranteed the obligations of the obligor thereunder.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.
"MV Margin Amount" means, with respect to any Transaction, as of any
date of determination, the amount obtained by application of the MV Margin
Percentage to the Repurchase Price (reduced by the amount of any accrued and
unpaid Price Differential) for such Transaction as of such date.
"MV Margin Percentage" shall have the meaning assigned thereto in the
Pricing Side Letter.
"Negative Amortization" shall mean with respect to each Negative
Amortization Loan, that portion of interest accrued at the Mortgage Interest
Rate in any month which exceeds the Monthly Payment on the related Loan for such
month and which, pursuant to the terms of the Note, is added to the principal
balance of the Loan.
"Negative Amortization Loan" shall mean each Loan that may be subject
to Negative Amortization.
"Net Income" shall mean, for any period, the net income of any Person
for such period as determined in accordance with GAAP.
"Net Worth" shall mean, with respect to any Person, the excess of total
assets of such Person, over total liabilities of such Person, determined in
accordance with GAAP.
"Note" shall mean, with respect to any Loan, the related promissory
note together with all riders thereto and amendments thereof or other evidence
of indebtedness of the related Mortgagor.
"Obligations" shall mean (a) all of Seller's obligation to pay the
Repurchase Price on the Repurchase Date and other obligations and liabilities of
Seller to Buyer, its Affiliates, the Custodian or any other Person arising
under, or in connection with, the Program Documents or directly related to the
Purchased Loans, whether now existing or hereafter arising; (b) any and all sums
paid by Buyer or on behalf of Buyer pursuant to the Program Documents in order
to preserve any Purchased Loan or its
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interest therein; (c) in the event of any proceeding for the collection or
enforcement of any of Seller's indebtedness, obligations or liabilities referred
to in clause (a), the reasonable expenses of retaking, holding, collecting,
preparing for sale, selling or otherwise disposing of or realizing on any
Purchased Loan, or of any exercise by Buyer or any Affiliate of Buyer of its
rights under the Program Documents, including without limitation, reasonable
attorneys' fees and disbursements and court costs; and (d) all of Seller's
indemnity obligations to Buyer pursuant to the Program Documents.
"Par Margin Amount" means, with respect to any Transaction, as of any
date of determination, the amount obtained by application of the Par Margin
Percentage to the Repurchase Price (reduced by the amount of any accrued and
unpaid Price Differential) for such Transaction as of such date.
"Par Margin Percentage" shall have the meaning assigned thereto in the
Pricing Side Letter.
"Participants" shall have the meaning assigned thereto in Section 39
hereof.
"Payment Adjustment Date" shall mean with respect to each Negative
Amortization Loan, the date on which Monthly Payments shall be adjusted, which
date shall be specified on the Loan Data Transmission.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Exceptions" shall mean the following exceptions to lien
priority: (i) the lien of current real property taxes and assessments not yet
due and payable; (ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
acceptable to mortgage lending institutions generally and specifically referred
to in the lender's title insurance policy delivered to the originator of the
Loan and (A) referred to or otherwise considered in the appraisal (if any) made
for the originator of the Loan or (B) which do not adversely affect the
appraised value of the Mortgaged Property set forth in such appraisal; (iii)
other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property; and (iv) in the case of a Second Lien Loan, a First Lien on
the Mortgaged Property.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by either Seller or any ERISA Affiliate and that is covered by Title
IV of ERISA, other than a Multiemployer Plan.
"PMI Policy" or "Primary Insurance Policy" shall mean a policy of
primary mortgage guaranty insurance issued by a Qualified Insurer.
"Post-Default Rate" shall mean, in respect of the Repurchase Price for
any Transaction or any other amount under this Agreement, or any other Program
Document that is not paid when due to the Buyer (whether at stated maturity, by
acceleration or mandatory prepayment or otherwise), a rate per annum during the
period from and including the due date to but excluding the date on which such
amount is paid in full equal to 2% per annum, plus (a)(i) the Pricing Rate
otherwise applicable to such Loan or other amount, or (ii) if no Pricing Rate is
otherwise applicable, the LIBO Rate plus (b) the Applicable Margin.
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"Price Differential" shall mean, with respect to each Transaction as of
any date of determination, the aggregate amount obtained by daily application of
the Pricing Rate (or during the continuation of an Event of Default, by daily
application of the Post-Default Rate) for such Transaction to the Purchase Price
for such Transaction on a 360-day-per-year basis for the actual number of days
elapsed during the period commencing on (and including) the Purchase Date and
ending on (but excluding) the date of determination (reduced by any amount of
such Price Differential in respect of such period previously paid by Seller to
Buyer with respect to such Transaction).
"Pricing Rate" shall mean the per annum percentage rate for
determination of the Price Differential as set forth in the Pricing Side Letter.
"Pricing Side Letter" shall mean the pricing side letter, dated as of
December 14, 2005, among Seller and Buyer, as the same may be amended,
supplemented or modified from time to time.
"Principal" shall have the meaning given to it in Annex I.
"Program Documents" shall mean this Agreement, the Custodial Agreement,
any Servicing Agreement, the Pricing Side Letter, any assignment of an Interest
Rate Protection Agreement, any Instruction Letter, the Electronic Tracking
Agreement and any other agreement entered into by Seller, on the one hand, and
the Buyer and/or any of its Affiliates or Subsidiaries (or Custodian on its
behalf) on the other, in connection herewith or therewith.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Proprietary Lease" shall mean the lease on a Cooperative Unit
evidencing the possessory interest of the owner of the Cooperative Shares in
such Cooperative Unit.
"Purchase Date" shall mean, with respect to each Transaction, the date
on which Purchased Loans are sold by Seller to the Buyer hereunder.
"Purchase Price" shall have the meaning assigned thereto in the Pricing
Side Letter.
"Purchased Items" shall have the meaning assigned thereto in Section 8
hereof.
"Purchased Loans" shall mean any of the following assets sold by Seller
to Buyer in a Transaction: the Loans, together with the related Records,
Servicing Rights, Seller's rights under any related Interest Rate Protection
Agreement, Seller's rights under any Escrow Letters and Insured Closing Letters
with respect to the Loans, Seller's rights under any takeout commitment related
to the Loans and other Purchased Items, such other property, rights, titles or
interest as are specified on a related Transaction Notice, and all instruments,
chattel paper, and general intangibles comprising or relating to all of the
foregoing. The term "Purchased Loans" with respect to any Transaction at any
time shall also include Additional Purchased Loans delivered pursuant to Section
5(a) hereof and Substitute Loans delivered pursuant to Section 16 hereof.
"Qualified Insurer" shall mean an insurance company duly qualified as
such under the laws of each state in which any Mortgaged Property is located,
duly authorized and licensed in each such state to transact the applicable
insurance business and to write the insurance provided, and approved as an
insurer by Fannie Mae and Freddie Mac and whose claims paying ability is rated
in the two highest rating categories by any of the rating agencies with respect
to primary mortgage insurance and in the two highest rating categories by Best's
with respect to hazard and flood insurance.
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"Qualified Originator" shall mean (a) any Seller and (b) any other
originator of Loans as specified by Seller on the Loan Schedule attached to the
related Transaction Notice.
"Reacquired Loans" shall have the meaning assigned thereto in Section
16.
"REIT" shall mean a real estate investment trust, as defined in Section
856 of the Code.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
ss. 2615.
"Repurchase Date" shall mean the date occurring on (i) the 9th day of
each month following the related Purchase Date (or if such date is not a
Business Day, the following Business Day), (ii) any other Business Day set forth
in the related Transaction Notice and/or the related Confirmation, or (iii) the
date determined by application of Section 19, as applicable.
"Repurchase Price" shall mean the price at which Purchased Loans are to
be transferred from Buyer to Seller upon termination of a Transaction, which
will be determined in each case (including Transactions terminable upon demand)
as the sum of the outstanding Purchase Price for such Purchased Loans and the
Price Differential as of the date of such determination.
"Required Documents" shall have the meaning set forth in the Custodial
Agreement.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Rescission" shall mean the right of a Mortgagor to rescind the related
Note and related documents pursuant to applicable law.
"Responsible Officer" shall mean, as to any Person, the chief executive
officer or, with respect to financial matters, the chief financial officer of
such Person; provided, that in the event any such officer is unavailable at any
time he or she is required to take any action hereunder, Responsible Officer
shall mean any officer authorized to act on such officer's behalf as
demonstrated by a certificate of corporate resolution.
"Restricted Payments" shall mean with respect to any Person,
collectively, all dividends or other distributions of any nature (cash,
securities, assets or otherwise), and all payments, by virtue of redemption or
otherwise, on any class of equity securities (including, without limitation,
warrants, options or rights therefor) issued by such Person, whether such
securities are now or may hereafter be authorized or outstanding and any
distribution in respect of any of the foregoing, whether directly or indirectly.
"Second Lien" shall mean with respect to each Mortgaged Property, the
lien of the mortgage, deed of trust or other instrument securing a mortgage note
which creates a second lien on the Mortgaged Property.
"Second Lien Loan" shall mean an Eligible Loan secured by the lien on
the Mortgaged Property, subject only to one prior lien on such Mortgaged
Property securing financing obtained by the related Mortgagor and to Permitted
Exceptions.
"Servicer" shall mean American Home Mortgage Servicing, Inc. in its
capacity as servicer or master servicer of the Loans.
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"Servicing Agreement" shall have the meaning provided in Section 42
hereof.
"Servicing File" shall mean with respect to each Loan, the file
retained by Servicer consisting of all documents that a prudent originator and
servicer would have, including copies of the Loan Documents, all documents
necessary to document and service the Loans and any and all documents required
to be delivered pursuant to any of the Program Documents.
"Servicing Records" shall have the meaning assigned thereto in Section
42 hereof.
"Servicing Rights" shall mean contractual, possessory or other rights
of Seller or any other Person, whether arising under the Servicing Agreement,
the Custodial Agreement or otherwise, to administer or service a Purchased Loan
or to possess related Servicing Records.
"Servicing Transmission" shall mean a computer-readable magnetic or
other electronic format acceptable to the parties containing the information
identified on Exhibit F.
"Settlement Agent" shall have the meaning assigned thereto in the
Custodial Agreement.
"Single Employer Plan" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subservicer" shall have the meaning provided in Section 43(c) hereof.
"Subprime Loan" shall mean an Eligible Loan to a Mortgagor of "B", "C"
or "D" credit quality.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Substitute Loans" has the meaning assigned thereto in Section 16.
"Tangible Net Worth" shall mean, with respect to any Person, as of any
date of determination, the consolidated Net Worth of such Person and its
Subsidiaries, less the consolidated net book value of all assets of such Person
and its Subsidiaries (to the extent reflected as an asset in the balance sheet
of such Person or any Subsidiary at such date) which will be treated as
intangibles under GAAP, including, without limitation, such items as deferred
financing expenses, deferred taxes, net leasehold improvements, good will,
trademarks, trade names, service marks, copyrights, patents, licenses and
unamortized debt discount and expense; provided, that residual securities issued
by such Person or its Subsidiaries shall not be treated as intangibles for
purposes of this definition.
"Termination Date" shall mean (i) September 17, 2006, (ii) such earlier
date on which Buyer may elect, in its sole discretion, by providing thirty (30)
days' prior written notice to Seller or (iii) such earlier date on which this
Agreement shall terminate in accordance with the provisions hereof or by
operation of law.
"Total Indebtedness" shall mean with respect to any Person, for any
period, the aggregate Indebtedness of such Person and its Subsidiaries during
such period, less the amount of any nonspecific consolidated balance sheet
reserves maintained in accordance with GAAP.
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"Transaction" has the meaning assigned thereto in Section 1.
"Transaction Notice" shall mean a written request by Seller in the form
of Exhibit D hereto, to enter into a Transaction, in a form to be mutually
agreed upon among Seller and Buyer, which is delivered to Buyer.
"Trust Receipt" shall have the meaning provided in the Custodial
Agreement.
"Underwriting Guidelines" shall mean the underwriting guidelines of the
Seller attached as Exhibit E hereto in effect as of the date of this Agreement,
as the same may be amended from time to time in accordance with terms of this
Agreement.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Purchased Items is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than New York,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
"USC" shall mean the United States Code, as amended.
"Wet Loan" shall mean a wet-funded First Lien or Second Lien Loan which
is underwritten in accordance with the Underwriting Guidelines and does not
contain all the required Loan Documents in the Mortgage File, which in order to
be deemed to an Eligible Loan shall have the following additional
characteristics:
(a) the proceeds thereof have been funded (or, on the
Purchase Date supported by a Transaction Notice are being funded) by wire
transfer or cashier's check, cleared check or draft or other form of
immediately available funds to the Settlement Agent for such Wet Loan;
(b) the Seller expects such Wet Loan to close and become a
valid lien securing actual indebtedness by funding to the order of the
Mortgagor thereunder;
(c) the proceeds thereof have not been returned to the
Buyer from the Settlement Agent for such Wet Loan;
(d) the Seller has not learned that such Wet Loan will not
be closed and funded to the order of the Mortgagor;
(e) upon recordation such Loan will constitute a First Lien
or Second Lien on the premises described therein; and
(f) any applicable rescission period has expired and such
Loan is not subject to any right of rescission.
(b) Accounting Terms and Determinations. Except as otherwise expressly
provided herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Buyer hereunder shall be prepared, in accordance
with GAAP.
(c) Interpretation. The following rules of this subsection (c) apply
unless the context requires otherwise. A gender includes all genders. Where a
word or phrase is defined, its other
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grammatical forms have a corresponding meaning. A reference to a subsection,
Section, Annex or Exhibit is, unless otherwise specified, a reference to a
Section of, or annex or exhibit to, this Agreement. A reference to a party to
this Agreement or another agreement or document includes the party's successors
and permitted substitutes or assigns. A reference to an agreement or document
(including any Program Documents) is to the agreement or document as amended,
modified, novated, supplemented or replaced, except to the extent prohibited
thereby or by any Program Document as in effect from time to time in accordance
with the terms thereof. A reference to legislation or to a provision of
legislation includes a modification or re-enactment of it, a legislative
provision substituted for it and a regulation or statutory instrument issued
under it. A reference to writing includes a facsimile transmission and any means
of reproducing words in a tangible and permanently visible form. A reference to
conduct includes, without limitation, an omission, statement or undertaking,
whether or not in writing. The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement. The term "including" is not limiting and means "including
without limitation". In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including", the words
"to" and "until" each mean "to but excluding", and the word "through" means "to
and including".
Except where otherwise provided in this Agreement, any determination,
consent, approval, statement or certificate made or confirmed in writing with
notice to Seller by Buyer or an authorized officer of Buyer provided for in this
Agreement is conclusive and binds the parties in the absence of manifest error.
A reference to an agreement includes a security interest, guarantee, agreement
or legally enforceable arrangement whether or not in writing related to such
agreement.
A reference to a document includes an agreement (as so defined) in
writing or a certificate, notice, instrument or document, or any information
recorded in computer disk form. Where Seller is required to provide any document
to Buyer under the terms of this Agreement, the relevant document shall be
provided in writing or printed form unless Buyer requests otherwise. At the
request of Buyer, the document shall be provided in computer disk form or both
printed and computer disk form.
This Agreement is the result of negotiations among, and has been
reviewed by counsel to, Buyer and Seller, and is the product of all parties. In
the interpretation of this Agreement, no rule of construction shall apply to
disadvantage one party on the ground that such party proposed or was involved in
the preparation of any particular provision of this Agreement or this Agreement
itself. Except where otherwise expressly stated, Buyer may give or withhold, or
give conditionally, approvals and consents and may form opinions and make
determinations at its absolute discretion. Any requirement of good faith,
discretion or judgment by Buyer shall not be construed to require Buyer to
request or await receipt of information or documentation not immediately
available from or with respect to Seller, a servicer of the Purchased Loans, any
other Person or the Purchased Loans themselves.
3. THE TRANSACTIONS
(a) Subject to the terms and conditions of the Program Documents, Buyer
may, from time to time in its sole discretion, enter into Transactions with an
aggregate Purchase Price for all Purchased Loans acquired by Buyer not to exceed
the Maximum Aggregate Purchase Price. Unless otherwise agreed, Seller shall
request that Buyer enter into a Transaction by delivering (i) a Transaction
Notice substantially in the form of Exhibit D hereto (a "Transaction Notice"),
appropriately completed, and a Loan Data Transmission to Buyer and Custodian,
and (ii) the Mortgage File to Custodian for each Loan proposed to be included in
such Transaction, which Transaction Notice and Loan Data Transmission must be
received no later than 5:00 p.m. (New York City time) one (1) Business Day prior
to the requested Purchase Date. Such Transaction Notice shall clearly indicate
those Loans that are intended to be Wet Loans and Dry Loans and include a Loan
List in respect of the Eligible Loans that the Seller proposes to include in the
related Transaction. Each Transaction Notice shall specify the proposed Purchase
Date,
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Purchase Price, Pricing Rate and Repurchase Date. Seller agrees to immediately
report to Custodian and the Buyer by facsimile transmission within one Business
Day of discovery that any Wet Loans that were previously subject to a
Transaction did not close for any reason including, but not limited to, a
Rescission. In the event that the parties hereto desire to enter into a
Transaction, the Buyer shall deliver to the Seller, in electronic or other
format, a "Confirmation" specifying such terms prior to entering into such
Transaction, including, without limitation, the Purchase Date, the Purchase
Price, the Pricing Rate therefor and the Repurchase Date. By entering into a
Transaction with the Buyer, the Seller consents to the terms set forth in the
related Confirmation. Any such Confirmation and the related Transaction Notice,
together with this Agreement, shall constitute conclusive evidence of the terms
agreed to between Buyer and Seller with respect to the Transaction to which the
Confirmation relates. In the event of any conflict between this Agreement and a
Confirmation, the terms of the Confirmation shall control with respect to the
related Transaction. It is acknowledged and agreed that, notwithstanding any
other provision of this Agreement to the contrary, the facility provided under
this Agreement is an uncommitted facility and the Buyer shall have no obligation
to enter into any Transactions hereunder.
(b) Pursuant to the Custodial Agreement, the Custodian shall review any
Required Documents delivered prior to 12:00 p.m. (New York City time) on any
Business Day on the same day. Not later than 3:00 p.m. (New York City time) on
each Business Day, the Custodian shall deliver to the Buyer, via Electronic
Transmission, the Custodian Loan Transmission and an Exception Report showing
the status of all Loans then held by the Custodian, including but not limited to
the Wet Loans and Dry Loans which are subject to Exceptions, and the time the
related Loan Documents have been released pursuant to Sections 5(a) or 5(b) of
the Custodial Agreement. In addition, the Custodian shall deliver to the Buyer
no later than 4:00 p.m. (New York City time) by facsimile transmission on each
Purchase Date, one or more Trust Receipts (as defined in the Custodial
Agreement) relating to either Wet Loans or Dry Loans. The original copies of
such Trust Receipts shall be delivered to JPMorgan Chase Bank at Four New York
Plaza, Ground Floor, Outsourcing Department, New York, New York 10004,
Attention: Jennifer John for the account of Greenwich Capital Markets, telephone
number (212) 623-5953), as agent for the Buyer by overnight delivery using a
nationally recognized insured overnight delivery service.
(c) Upon Seller's request to enter into a Transaction pursuant to
Section 3(a) above, Buyer shall, in its sole discretion, assuming all conditions
precedent set forth in this Section 3 and in Sections 9(a) and (b) have been
met, and provided no Default shall have occurred and be continuing, not later
than 5:00 p.m. (New York City time) on the requested Purchase Date purchase the
Eligible Loans included in the related Transaction Notice by transferring, via
wire transfer (pursuant to wire transfer instructions provided by the Seller on
or prior to such Purchase Date), the Purchase Price.
(d) Anything herein to the contrary notwithstanding, if, on or prior to
the determination of any LIBO Base Rate:
(i) the Buyer reasonably determines, which determination shall
be conclusive absent manifest error, that quotations of interest rates
for the relevant deposits referred to in the definition of "LIBO Base
Rate" in Section 2 hereof are not being provided in the relevant
amounts or for the relevant maturities for purposes of determining
rates of interest for Transactions as provided herein; or
(ii) the Buyer reasonably determines, which determination
shall be conclusive absent manifest error, that the Applicable Margin
plus the relevant rate of interest referred to in the definition of
"LIBO Base Rate" in Section 2 hereof upon the basis of which the rate
of interest for Transactions is to be determined is not likely
adequately to cover the cost to the Buyer of purchasing and holding
Loans hereunder; or
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(iii) it becomes unlawful for Buyer to enter into Transactions
with a Pricing Rate based on the LIBO Base Rate;
then the Buyer shall give the Seller prompt notice thereof (no later than one
(1) Business Day after Buyer's discovery of such condition) and, so long as such
condition remains in effect, the Buyer shall be under no obligation to purchase
Loans hereunder, and the Seller shall, at its option, either repurchase such
Loans or pay a Pricing Rate at a rate per annum as determined by the Buyer
taking into account the increased cost to the Buyer of purchasing and holding
the Loans.
(e) Seller shall repurchase Purchased Loans from Buyer on each related
Repurchase Date. Each obligation to repurchase exists without regard to any
prior or intervening liquidation or foreclosure with respect to any Purchased
Loan. Buyer is obligated to deliver the Purchased Loans to Seller or its
designee (including the Custodian) at Seller's reasonable expense on (or after)
the related Repurchase Date.
(f) Provided that the applicable conditions in Sections 9(a) and (b)
have been satisfied, Seller may request that a Purchased Loan that is
repurchased by Seller on the Repurchase Date become subject to a new Transaction
by delivering notice of such request to Buyer with a copy to Custodian not later
than 3:00 p.m. New York City time at least one (1) Business Day prior to any
such Repurchase Date. Upon Buyer agreeing in its sole discretion to enter into
such proposed Transaction, Buyer shall purchase the related Eligible Loans
pursuant to the procedures set forth in Section 3(c) above. For each new
Transaction, unless otherwise agreed, (y) the accrued and unpaid Price
Differential shall be settled in cash on each related Repurchase Date, and (z)
the Pricing Rate shall be as set forth in the Pricing Side Letter.
(g) If the Seller intends to repurchase any Loans on any day which is
not a Repurchase Date, the Seller shall give two (2) Business Days' prior
written notice thereof to the Buyer. If such notice is given, the Repurchase
Price specified in such notice shall be due and payable on the date specified
therein, together with the Price Differential to such date on the amount
prepaid. Such early repurchases shall be in an aggregate principal amount of at
least $100,000.
(h) Reserved.
(i) If any Requirement of Law (other than with respect to any amendment
made to the Buyer's certificate of incorporation and by-laws or other
organizational or governing documents) or any change in the interpretation or
application thereof or compliance by the Buyer with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject the Buyer to any tax of any kind whatsoever
with respect to this Agreement or any Loans purchased pursuant to it
(excluding net income taxes) or change the basis of taxation of
payments to the Buyer in respect thereof;
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory advance or similar requirement against
assets held by deposits or other liabilities in or for the account of
Transactions or extensions of credit by, or any other acquisition of
funds by any office of the Buyer which is not otherwise included in the
determination of the LIBO Base Rate hereunder;
(iii) shall impose on the Buyer any other condition;
and the result of any of the foregoing is to materially increase the cost to the
Buyer of effecting or maintaining purchases hereunder, or to reduce any amount
receivable hereunder in respect thereof, then,
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in any such case, the Seller shall promptly, upon its receipt of a certificate
which Buyer shall deliver promptly upon its discovery of such increased costs
and which sets forth in reasonable detail the calculation and the basis for such
increased costs (an "Increased Cost Certificate"), (i) pay the Buyer such
additional amount or amounts set forth in such Increased Cost Certificate, or
(ii) repurchase the affected Loans at the Repurchase Price.
If the Buyer shall have reasonably determined that the adoption of or
any change in any Requirement of Law (other than with respect to any amendment
made to the Buyer's certificate of incorporation and by-laws or other
organizational or governing documents) regarding capital adequacy or in the
interpretation or application thereof or compliance by the Buyer or any
corporation controlling the Buyer with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the Buyer's or such corporation's capital as a consequence
of its obligations hereunder to a level below that which the Buyer or such
corporation (taking into consideration the Buyer's or such corporation's
policies with respect to capital adequacy) by an amount deemed by the Buyer to
be material, then from time to time, the Buyer shall promptly send upon its
discovery of such increased costs an Increased Cost Certificate and the Seller
shall promptly, upon its receipt of such Increased Cost Certificate, either (i)
pay to the Buyer such additional amount or amounts as will thereafter compensate
the Buyer for such reduction, or (ii) repurchase the affected Loans at the
Repurchase Price.
If the Buyer becomes entitled to claim any additional amounts pursuant
to this subsection, it shall promptly notify the Seller of the event by reason
of which it has become so entitled. An Increased Cost Certificate as to any
additional amounts payable pursuant to this subsection submitted by the Buyer to
the Seller shall be conclusive in the absence of manifest error.
4. PAYMENT AND TRANSFER
(a) Payments. Except to the extent otherwise provided herein, all
payments to be made by the Seller under this Agreement, shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to the Buyer at the following account maintained by the Buyer at
JPMorgan Chase Bank Account Number 140095961, For the A/C of Greenwich Capital
Financial Products, Inc., ABA# 021000021, Attn: Brett Kibbe, not later than 1:00
p.m., New York City time, on the date on which such payment shall become due
(each such payment made after such time on such due date to be deemed to have
been made on the next succeeding Business Day). The Seller acknowledges that it
has no rights of withdrawal from the foregoing account.
(b) Computations. The Pricing Differential shall be computed on the
basis of a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
5. TAXES; TAX TREATMENT
(a) All payments made by the Seller under this Repurchase Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities (including penalties, interest and additions
to tax) with respect thereto imposed by any Governmental Authority, excluding
income taxes, branch profits taxes, franchise taxes or any other tax imposed on
the net income by the United States, a state or a foreign jurisdiction under the
laws of which the Buyer is organized or of its applicable lending office, or any
political subdivision thereof (collectively, "Taxes"), all of which shall be
paid by the Seller for its own account not later than the date when due. If the
Seller is required by law or regulation to deduct or withhold any Taxes from or
in respect of any amount payable hereunder, it shall: (a) make such deduction or
withholding; (b) pay the amount so deducted or withheld to the appropriate
Governmental
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Authority not later than the date when due; (c) deliver to Buyer, promptly,
original tax receipts and other evidence reasonably satisfactory to Buyer of the
payment when due of the full amount of such Taxes; and (d) pay to the Buyer such
additional amounts as may be necessary so that such Buyer receives, free and
clear of all Taxes, a net amount equal to the amount it would have received
under this Agreement, as if no such deduction or withholding had been made.
(b) In addition, the Seller agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (including, without limitation, mortgage recording taxes, transfer taxes
and similar fees) imposed by the United States or any taxing authority thereof
or therein that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Repurchase
Agreement ("Other Taxes").
(c) The Seller agrees to indemnify the Buyer for the full amount of
Taxes and Other Taxes, and the full amount of Taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 5, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, provided that the Buyer shall have provided the Seller with evidence,
reasonably satisfactory to the Seller, of payment of Taxes or Other Taxes, as
the case may be.
(d) Any Buyer that is not incorporated under the laws of the United
States, any State thereof, or the District of Columbia (a "Foreign Buyer") shall
provide the Seller with properly completed United States Internal Revenue
Service ("IRS") Form W-8BEN or W-8ECI or any successor form prescribed by the
IRS, certifying that such Foreign Buyer is entitled to benefits under an income
tax treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States on or prior to the date upon which each such
Foreign Buyer becomes a Buyer. Each Foreign Buyer will resubmit the appropriate
form on the earliest of (A) the third anniversary of the prior submission or (B)
on or before the expiration of thirty (30) days after there is a "change in
circumstances" with respect to such Foreign Buyer as defined in Treas. Reg.
Section 1.1441(e)(4)(ii)(D). For any period with respect to which a Foreign
Buyer has failed to provide the Seller with the appropriate form or other
relevant document pursuant to this Section 5(d) (unless such failure is due to a
change in treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Foreign Buyer shall not be
entitled to any "gross-up" of Taxes or indemnification under Section 5(c) with
respect to Taxes imposed by the United States; provided, however, that should a
Foreign Buyer, which is otherwise exempt from a withholding tax, become subject
to Taxes because of its failure to deliver a form required hereunder, the Seller
shall take such steps as such Foreign Buyer shall reasonably request to assist
such Foreign Buyer to recover such Taxes.
(e) Without prejudice to the survival or any other agreement of Seller
hereunder, the agreements and obligations of Seller contained in this Section 5
shall survive the termination of this Agreement. Nothing contained in this
Section 5 shall require Buyer to make available any of its tax returns or other
information that it deems to be confidential or proprietary.
(f) Each party to this Agreement acknowledges that it is its intent for
purposes of U.S. federal, state and local income and franchise taxes to treat
each Transaction as indebtedness of Seller that is secured by the Purchased
Loans and that the Purchased Loans are owned by Seller in the absence of an
Event of Default by Seller. All parties to this Agreement agree to such
treatment and agree to take no action inconsistent with this treatment, unless
required by law.
6. MARGIN MAINTENANCE
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(a) (a) If at any time either (i) the aggregate Market Value of all
Purchased Loans subject to all Transactions is less than the aggregate MV Margin
Amount for all such Transactions, or (ii) the aggregate unpaid principal balance
of the Purchased Loans for all Transactions is less than the aggregate Par
Margin Amount for all such Transactions (either such event, a "Margin Deficit"),
then the Buyer may, by written notice to Seller, require Seller in such
Transactions to transfer to the Buyer cash or, at the Buyer's option (and
provided Seller has additional Eligible Loans), additional Eligible Loans
("Additional Purchased Loans") within one (1) Business Day of such notice by
Buyer, so that both (x) the cash and aggregate Market Value of the Purchased
Loans, including any such Additional Purchased Loans, will thereupon equal or
exceed such aggregate MV Margin Amount, and (y) the cash and unpaid principal
balance of such Purchased Loans, including any such Additional Purchased Loans
and Purchased Loans, will therefore equal or exceed such aggregate Par Margin
Amount (either requirement, a "Margin Call"); provided that if Seller transfers
cash, Buyer shall deposit such cash into a non-interest bearing account until
the next succeeding Repurchase Date.
(b) Notice required pursuant to Section 6(a) may be given by any means
provided in Section 21 hereof. Any notice given on a Business Day before 5:00
p.m. (New York City time) shall be met, and the related Margin Call satisfied
within one (1) Business Day of Seller's receipt of such notice. The failure of
Buyer, on any one or more occasions, to exercise its rights under this Section
6, shall not change or alter the terms and conditions to which this Agreement is
subject or limit the right of Buyer to do so at a later date. Seller and Buyer
each agree that a failure or delay by Buyer to exercise its rights hereunder
shall not limit or waive Buyer's rights under this Agreement or otherwise
existing by law or in any way create additional rights for Seller.
7. INCOME PAYMENTS
Where a particular term of a Transaction extends over the date on which
Income is paid in respect of any Purchased Loan subject to that Transaction,
such Income shall be the property of Buyer. Notwithstanding the foregoing, and
provided no Default has occurred and is continuing, Buyer agrees that Seller
shall be entitled to receive an amount equal to all Income received in respect
of the Purchased Loans, whether by Buyer, Custodian or any servicer or any other
Person, which is not otherwise received by Seller, to the full extent it would
be so entitled if the Purchased Loans had not been sold to Buyer; provided that
any Income received by Seller while the related Transaction is outstanding shall
be deemed to be held by Seller solely for the benefit for Buyer pending the
repurchase on the related Repurchase Date; provided further that Seller shall
hold all such Income in the Collection Account. Provided no Default has
occurred, Buyer shall, as the parties may agree with respect to any Transaction,
on the Repurchase Date following the date such Income is received by Buyer (or a
servicer on its behalf) either (i) transfer (or permit the servicer to transfer)
to Seller such Income with respect to any Purchased Loans subject to such
Transaction, or (ii) if a Margin Deficit then exists, apply the Income payment
to reduce the amount, if any, to be transferred to Buyer by Seller upon
termination of such Transaction. Buyer shall not be obligated to take any action
pursuant to the preceding sentences (A) to the extent that such action would
result in the creation of a Margin Deficit, unless prior thereto or
simultaneously therewith Seller transfers to Buyer cash or Additional Purchased
Loans sufficient to eliminate such Margin Deficit, or (B) if an Event of Default
with respect to Seller has occurred and is then continuing at the time such
Income is paid.
8. SECURITY INTEREST; BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT
(a) Seller and Buyer intend that the Transactions hereunder be sales to Buyer of
the Purchased Loans and not loans from Buyer to Seller secured by the Purchased
Loans. However, in order to preserve Buyer's rights under this Agreement in the
event that a court or other forum recharacterizes the Transactions hereunder as
other than sales, and as security for Seller's performance of all of its
Obligations, Seller hereby grants Buyer a fully perfected first priority
security interest in the following
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property, whether now existing or hereafter acquired: (i) all Loans identified
on a Transaction Notice delivered by the Seller to the Buyer and the Custodian
from time to time, (ii) all Loan Documents, including without limitation all
promissory notes, and all Records, all Servicing Rights, and any other
collateral pledged or otherwise relating to such Loans, together with all files,
material documents, instruments, surveys (if available), certificates,
correspondence, appraisals, computer records, computer storage media, Loan
accounting records and other books and records relating thereto, (iii) all
mortgage guaranties and insurance (issued by governmental agencies or otherwise)
and any mortgage insurance certificate or other document evidencing such
mortgage guaranties or insurance relating to any Loans and all claims and
payments thereunder, (iv) all other insurance policies and insurance proceeds
relating to any Loans or the related Mortgaged Property, (v) all Interest Rate
Protection Agreements relating to any or all of the foregoing, (vi) any purchase
agreements or other agreements or contracts relating to or constituting any or
all of the foregoing, (vii) all purchase or take-out commitments relating to or
constituting any or all of the foregoing, (viii) all "accounts", "chattel
paper", "commercial tort claims", "deposit accounts", "documents," "equivalent",
"general intangibles", "goods", "instruments", "inventory", "investment
property", "letter of credit rights", and "securities' accounts" as each of
those terms is defined in the Uniform Commercial Code and all cash and Cash
Equivalents and all products and proceeds relating to or constituting any or all
of the foregoing, (ix) Seller's interests under any Escrow Letters and Insured
Closing Letters with respect to any Purchased Loans (x) all interests in real
property owned by the Seller or collateralizing any Loans, and (xi) any and all
replacements, substitutions, distributions on or proceeds of any or all of the
foregoing (collectively the "Purchased Items"). Seller acknowledges and agrees
that its rights with respect to the Purchased Items (including without
limitation, any security interest Seller may have in the Purchased Loans and any
other collateral granted to Seller pursuant to any other agreement) are and
shall continue to be at all times junior and subordinate to the rights of Buyer
hereunder.
(b) At any time and from time to time, upon the written request of the
Buyer, and at the sole expense of the Seller, the Seller will promptly and duly
execute and deliver, or will promptly cause to be executed and delivered, such
further instruments and documents and take such further action as the Buyer may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted. The Seller also
hereby authorizes the Buyer to file any financing or continuation statements to
the extent permitted by applicable law. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement for
filing in any jurisdiction. This Agreement shall constitute a security agreement
under applicable law.
(c) The Seller shall not (i) change the location of its chief executive
office/chief place of business from that specified in Section 12(l) hereof, (ii)
change its name, identity or corporate structure (or the equivalent) or change
the location where it maintains its records with respect to the Purchased Items,
or (iii) reincorporate or reorganize under the laws of another jurisdiction
unless it shall have given the Buyer at least 30 days prior written notice
thereof and shall have taken all other actions deemed reasonably necessary by
the Buyer to continue its perfected status in the Purchased Items with the same
or better priority.
(d) Seller hereby irrevocably constitutes and appoints Buyer and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Seller and in the name of Seller or in its own name, from time to
time in Buyer's discretion, for the purpose of carrying out the terms of this
Repurchase Agreement, including without limitation, protecting, preserving and
realizing upon the Purchased Items, to take any and all reasonable and
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Repurchase
Agreement, including without limitation, to protect, preserve and realize upon
the Purchased Items, to file such financing statement or statements relating to
the Purchased Loans and the Purchased Items as Buyer at its option may deem
appropriate in its reasonable discretion, and, without limiting the generality
of the foregoing, Seller
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hereby gives Buyer the power and right, on behalf of Seller, without assent by,
but with notice to, Seller, if an Event of Default shall have occurred and be
continuing, to do the following:
(i) in the name of Seller, or in its own name, or otherwise,
to take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due
with respect to any Purchased Loans and to file any claim or to take
any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by Buyer for the purpose of collecting any
and all such moneys due with respect to any Purchased Loans whenever
payable;
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Purchased Loans;
(iii) (A) to direct any party liable for any payment under any
Purchased Loans to make payment of any and all moneys due or to become
due thereunder directly to Buyer or as Buyer shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Purchased Loans; (C) to sign and
endorse any invoices, assignments, verifications, notices and other
documents in connection with any Purchased Loans; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Purchased Loans or any
proceeds thereof and to enforce any other right in respect of any
Purchased Loans; (E) to defend any suit, action or proceeding brought
against Seller with respect to any Purchased Loans; (F) to settle,
compromise or adjust any suit, action or proceeding described in clause
(E) above and, in connection therewith, to give such discharges or
releases as Buyer may reasonably deem appropriate; and (G) generally,
to sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any Purchased Loans as fully and completely as
though Buyer were the absolute owner thereof for all purposes, and to
do, at Buyer's option and Seller's reasonable expense, at any time, and
from time to time, all acts and things which Buyer deems necessary (in
its reasonable discretion) to protect, preserve or realize upon the
Purchased Loans and the Purchased Items and Buyer's Liens thereon and
to effect the intent of this Agreement, all as fully and effectively as
Seller might do.
Seller hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable.
Seller also authorizes Buyer, if an Event of Default shall
have occurred, from time to time, to execute, in connection with any sale
provided for in Section 19 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Purchased Loans.
(e) The powers conferred on Buyer hereunder are solely to protect
Buyer's interests in the Purchased Loans and shall not impose any duty upon it
to exercise any such powers. Buyer shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and neither it nor
any of its officers, directors, employees or agents shall be responsible to
Seller for any act or failure to act hereunder, except for its or their own
gross negligence or willful misconduct.
(f) If the Seller fails to perform or comply with any of its material
agreements contained in the Program Documents and the Buyer may itself perform
or comply, or otherwise cause performance or compliance, with such agreement,
the reasonable out-of-pocket expenses of the Buyer incurred in connection with
such performance or compliance, together with interest thereon at a rate per
annum equal to the Post-Default Rate, shall be payable by the Seller to the
Buyer on demand and shall constitute Obligations.
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(g) The Buyer's duty with respect to the custody, safekeeping and
physical preservation of the Purchased Items in its possession, under Section
9-207 of the Uniform Commercial Code or otherwise, shall be to deal with it in
the same manner as the Buyer deals with similar property for its own account.
Neither the Buyer nor any of its directors, officers or employees shall be
liable for failure to demand, collect or realize upon all or any part of the
Purchased Items or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Purchased Items upon the request of the Seller
or otherwise.
(h) All authorizations and agencies herein contained with respect to
the Purchased Items are irrevocable and powers coupled with an interest.
9. CONDITIONS PRECEDENT
(a) As conditions precedent to the initial Transaction, Buyer shall
have received on or before the date on which such initial Transaction is
consummated the following, in form and substance reasonably satisfactory to
Buyer and duly executed by each party thereto (as applicable):
(i) Program Documents. The Program Documents duly executed and
delivered by the parties to such documents and being in full force and
effect, free of any modification, breach or waiver.
(ii) Organizational Documents. A good standing certificate and
certified copies of the charter and by-laws (or equivalent documents)
of the Seller, in each case dated as of a recent date, but in no event
more than ten (10) days prior to the date of such initial Transaction
and of all corporate or other authority for the Seller with respect to
the execution, delivery and performance of the Program Documents (and
the Buyer may conclusively rely on such certificate until it receives
notice in writing from the Seller to the contrary).
(iii) Incumbency Certificate. An incumbency certificate of the
secretaries of Seller certifying the names, true signatures and titles
of Seller's representatives duly authorized to request Transactions
hereunder and to execute the Program Documents and the other documents
to be delivered thereunder;
(iv) Legal Opinion. A legal opinion of counsel to the Seller,
substantially in the form attached hereto as Exhibit C.
(v) Filings, Registrations, Recordings. (i) Any documents
(including, without limitation, financing statements) required to be
filed, registered or recorded in order to create, in favor of the
Buyer, a perfected, first-priority security interest in the Purchased
Items, subject to no Liens other than those created hereunder, shall
have been properly prepared and executed for filing, registration or
recording in each office in each jurisdiction in which such filings,
registrations and recordations are required to perfect such
first-priority security interest; and (ii) UCC lien searches, dated as
of a recent date, but in no event more than fourteen (14) days prior to
the date of such initial Transaction, in such jurisdictions as shall be
applicable to the Seller and the Purchased Items, the results of which
shall be satisfactory to the Buyer.
(vi)Fees and Expenses. The Buyer shall have received all fees
and expenses required to be paid by the Seller on or prior to the
initial Purchase Date, which fees and expenses may be netted out of any
purchase proceeds paid by the Buyer hereunder.
(vii) Financial Statements. The Buyer shall have received the
financial statements referenced in Section 12(b).
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(viii) Underwriting Guidelines. The Buyer and the Seller shall
have agreed upon the Seller's current Underwriting Guidelines for Loans
and the Buyer shall have received a copy thereof, certified by a
responsible officer of the Seller.
(ix) Consents, Licenses, Approvals, etc. The Buyer shall have
received copies certified by the Seller of all consents, licenses and
approvals, if any, required in connection with the execution, delivery
and performance by the Seller of, and the validity and enforceability
of, the Loan Documents, which consents, licenses and approvals shall be
in full force and effect.
(x) Insurance. The Buyer shall have received evidence in form
and substance reasonably satisfactory to the Buyer showing compliance
by the Seller as of such initial Purchase Date with Section 13(w)
hereof.
(xi) Collection Account. Evidence of the establishment of the
Collection Account.
(xii) Other Documents. The Buyer shall have received such
other documents as the Buyer or its counsel may reasonably request.
(b) The obligation of Buyer to enter into each Transaction pursuant to
this Agreement (including the initial Transaction) is subject to the following
further conditions precedent, both immediately prior to any Transaction and also
after giving effect thereto and to the intended use thereof:
(i) No Default or Event of Default shall have occurred and be
continuing.
(ii) Both immediately prior to entering into such Transaction
and also after giving effect thereto and to the intended use of the
proceeds thereof, the representations and warranties made by the Seller
in Section 12 and Schedule 1 hereof, and in each of the other Program
Documents, shall be true and complete on and as of the Purchase Date in
all material respects (in the case of the representations and
warranties in Section 12(v) and 12(w) and Schedule 1, solely with
respect to Loans which have not been repurchased by Seller) with the
same force and effect as if made on and as of such date (or, if any
such representation or warranty is expressly stated to have been made
as of a specific date, as of such specific date). At the reasonable
request of the Buyer, the Buyer shall have received an officer's
certificate signed by a Responsible Officer of the Seller certifying as
to the truth and accuracy of the above, which certificate shall
specifically include a statement that the Seller is in compliance with
all necessary governmental licenses and authorizations and is qualified
to do business and in good standing in all required jurisdictions.
(iii) The then aggregate outstanding Purchase Price for all
Purchased Loans, when added to the Purchase Price for the requested
Transaction, shall not exceed the Maximum Aggregate Purchase Price.
(iv) Subject to the Buyer's right to perform one or more Due
Diligence Reviews pursuant to Section 44 hereof, the Buyer shall have
completed its Due Diligence Review of the Loan Documents for each
Purchase and such other documents, records, agreements, instruments,
Mortgaged Properties or information relating to such Purchases as the
Buyer in its reasonable discretion deems appropriate to review and such
review shall be satisfactory to the Buyer in its reasonable discretion.
(v) Buyer or its designee shall have received on or before the
day of a Transaction with respect to any Purchased Loans (unless
otherwise specified in this Agreement) the following, in form and
substance reasonably satisfactory to Buyer and (if applicable) duly
executed:
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(A) The Transaction Notice and Loan Data Transmission
with respect to such Purchased Loans, delivered
pursuant to Section 3(a);
(B) The Trust Receipt with respect to such Purchased
Loans, with the Loan Data Transmission attached;
and
(C) Such certificates, customary opinions of counsel
or other documents as Buyer may reasonably
request, provided that such opinions of counsel
shall not be required routinely in connection
with each Transaction but shall only be required
from time to time as deemed necessary by Buyer in
its commercially reasonable judgment.
(vi) In the event that the Loans to be purchased would cause
the aggregate outstanding principal balance of Purchased Loans secured
by Mortgaged Property from any state to exceed 50% of the aggregate
outstanding principal balance of Loans pledged hereunder, then the
Seller shall, upon request by the Buyer, deliver an opinion of counsel
acceptable to the Buyer in such state, substantially in the form of
items number 11 and 12 of Exhibit C.
(vii) With respect to any Loan that was funded in the name of
or acquired by a Qualified Originator which is an Affiliate of the
Seller, the Buyer may, in its sole reasonable discretion, require the
Seller to provide evidence reasonably sufficient to satisfy the Buyer
that such Loan was acquired in a legal sale, including without
limitation, an opinion, in form and substance and from an attorney, in
both cases, reasonably acceptable to the Buyer in its sole discretion,
that such Loan was acquired in a legal sale.
(viii) None of the following shall have occurred and/or be
continuing:
(i) an event or events resulting in the inability of
the Buyer to finance its purchases of assets with
traditional counterparties at rates which would have
been reasonable prior to the occurrence of such event
or events or a material adverse change in the financial
condition of the Buyer which affects (or can reasonably
be expected to affect) materially and adversely the
ability of the Buyer to fund its obligations under or
otherwise comply with the terms of this Agreement; or
(ii) any other event beyond the control of the Buyer
which the Buyer reasonably determines may result in the
Buyer's inability to perform its obligations under this
Agreement including, without limitation, acts of God,
strikes, lockouts, riots, acts of war or terrorism,
epidemics, nationalization, expropriation, currency
restrictions, fire, communication line failures,
computer viruses, power failures, earthquakes, or other
disasters of a similar nature to the foregoing.
(ix) If any Loans to be purchased hereunder were acquired by
the Seller, such Loans shall conform to the Seller's Underwriting
Guidelines or the Buyer shall have received underwriting guidelines and
all amendments thereto for such Loans acceptable to the Buyer in its
reasonable discretion. The Buyer shall have received any amendments,
modifications or supplements to the Underwriting Guidelines in effect
on the date any of the Loans to be purchased were originated.
(x) The Buyer shall have received all information reasonably
requested from the Seller relating to Interest Rate Protection
Agreements pursuant to Section 13(z), and the Buyer shall have
reasonably determined that such Interest Rate Protection Agreements
adequately protect the Seller from interest rate fluctuations.
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(xi) The Buyer shall have received, no later than 10:00 a.m.
three (3) days prior to the requested Purchase Date, an Instruction
Letter, executed by the Seller, with the related Servicing Agreement
attached thereto, if applicable, which such Servicing Agreement shall
be in form and substance reasonably acceptable to Buyer.
(xii) In no event shall Buyer be required to enter into (A)
more than one Transaction in any one Business Day, nor (B) any
Transaction whose Purchase Price would be less than $25,000,000.
(xiii) Buyer shall have determined, in its reasonable
discretion, that all actions necessary or desirable to maintain the
Buyer's perfected interest in the Purchased Loans and other Purchased
Items have been taken, including, without limitation, duly executed and
filed Uniform Commercial Code financing statements on Form UCC-1.
(xiv) Seller shall have paid to Buyer all fees and expenses
then owed to Buyer in accordance with this Agreement and any other
Program Document.
(xv) Buyer or its designee shall have received any other
documents reasonably requested by Buyer.
(xvi) There is no Margin Deficit at the time immediately prior
to entering into a new Transaction.
(xvii) Each secured party (including any party that has a
precautionary security interest in a Loan) has released all of its
right, title and interest in, to and under each Loan that Seller
proposes to sell in connection with such Transaction (including,
without limitation, any security interest that such secured party or
secured party's agent may have by virtue of its possession, custody or
control thereof) and has filed Uniform Commercial Code termination
statements in respect of any Uniform Commercial Code filings made in
respect of such Loan, and each such release and Uniform Commercial Code
termination statement has been delivered to the Buyer prior to each
Transaction and to the Custodian as part of the Mortgage File.
10. RELEASE OF PURCHASED LOANS
Upon timely payment in full of the Repurchase Price and all other
Obligations (if any) then owing with respect to a Purchased Loan, unless a
Default or Event of Default shall have occurred and be continuing, then (a)
Buyer shall be deemed to have terminated any security interest that Buyer may
have in such Purchased Loan and any Purchased Items solely related to such
Purchased Loan and (b) with respect to such Purchased Loan, Buyer shall direct
Custodian to release such Purchased Loan and any Purchased Items solely related
to such Purchased Loan to Seller unless such release and termination would give
rise to or perpetuate a Margin Deficit. Except as set forth in Sections 6(a) and
16, Seller shall give at least two (2) Business Days prior written notice to
Buyer if such repurchase shall occur on any date other than the Repurchase Date
set forth in Section 3(h).
If such release and termination gives rise to or perpetuates a Margin
Deficit, Buyer shall notify Seller of the amount thereof and Seller shall
thereupon satisfy the Margin Call in the manner specified in Section 6.
11. RELIANCE
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With respect to any Transaction, Buyer may conclusively rely upon, and
shall incur no liability to Seller in acting upon, any request or other
communication that Buyer reasonably believes to have been given or made by a
person authorized to enter into a Transaction on Seller's behalf.
12. REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants to the Buyer that throughout the
term of this Agreement:
(a) Existence. The Seller (a) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite corporate or other power, and has all
governmental licenses, authorizations, consents and approvals, necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, except where the lack of such licenses, authorizations, consents and
approvals would not be reasonably likely to have a Material Adverse Effect, (c)
is qualified to do business and is in good standing in all other jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary, except where failure so to qualify would not be reasonably likely
(either individually or in the aggregate) to have a Material Adverse Effect, and
(d) is in compliance in all material respects with all Requirements of Law.
(b) Financial Condition. The Seller has heretofore furnished to the
Buyer a copy of its audited consolidated balance sheets and the audited
consolidated balance sheets of its consolidated Subsidiaries, each as at
December 31, 2004 with the opinion thereon of Deloitte & Touche, a copy of which
has been provided to Buyer. The Seller has also heretofore furnished to the
Buyer the related consolidated statements of income and retained earnings and of
cash flows for the Seller and its consolidated Subsidiaries for the one year
period ending December 31, 2004, setting forth comparative form the figures for
the previous year. All such financial statements are materially complete and
correct and fairly present the consolidated financial condition of the Seller
and its Subsidiaries and the consolidated results of their operations for the
fiscal year ended on said date, all in accordance with GAAP applied on a
consistent basis. Since December 31, 2004, there has been no development or
event nor any prospective development or event which has had or should
reasonably be expected to have a Material Adverse Effect.
(c) Litigation. There are no actions, suits, arbitrations,
investigations or proceedings pending or, to its knowledge, threatened against
the Seller or any of its Subsidiaries or Affiliates or affecting any of the
property thereof before any Governmental Authority, (i) as to which individually
or in the aggregate there is a reasonable likelihood of an adverse decision
which would be reasonably likely to have a Material Adverse Effect or (ii) which
questions the validity or enforceability of any of the Program Documents or any
action to be taken in connection with the transactions contemplated thereby and
there is a reasonable likelihood of a Material Adverse Effect or adverse
decision.
(d) No Breach. Neither (a) the execution and delivery of the Program
Documents or (b) the consummation of the transactions therein contemplated in
compliance with the terms and provisions thereof will conflict with or result in
a breach of the charter or by-laws of the Seller, or any applicable law, rule or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or other material agreement or instrument to which the Seller, or any
of its Subsidiaries, is a party or by which any of them or any of their property
is bound or to which any of them or their property is subject, or constitute a
default under any such material agreement or instrument, or (except for the
Liens created pursuant to this Agreement) result in the creation or imposition
of any Lien upon any property of the Seller or any of its Subsidiaries, pursuant
to the terms of any such agreement or instrument.
(e) Action. The Seller has all necessary corporate or other power,
authority and legal right to execute, deliver and perform its obligations under
each of the Program Documents to which it is a party; the execution, delivery
and performance by the Seller of each of the Program Documents to which it is a
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party has been duly authorized by all necessary corporate or other action on its
part; and each Program Document has been duly and validly executed and delivered
by the Seller and constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms.
(f) Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority, or any other Person,
are necessary for the execution, delivery or performance by the Seller of the
Program Documents to which it is a party or for the legality, validity or
enforceability thereof, except for filings and recordings in respect of the
Liens created pursuant to this Agreement.
(g) Taxes. The Seller and its Subsidiaries have filed all Federal
income tax returns and all other material tax returns that are required to be
filed by them and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by any of them, except for any such taxes, if any,
that are being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Seller and its
Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Seller, adequate. Any taxes, fees and other governmental charges
payable by Seller in connection with a Transaction and the execution and
delivery of the Program Documents have been paid.
(h) Investment Company Act. Neither the Seller nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. The Seller is not subject to any Federal or state statute or
regulation which limits its ability to incur indebtedness.
(i) No Legal Bar. The execution, delivery and performance of this
Agreement, the other Program Documents, the sales hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of the Seller or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien (other than the Liens created
hereunder) on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation.
(j) Compliance with Law. No practice, procedure or policy employed or
proposed to be employed by Seller in the conduct of its business violates any
law, regulation, judgment, agreement, regulatory consent, order or decree
applicable to it which, if enforced, would result in either a Material Adverse
Effect with respect to Seller.
(k) No Default. Neither the Seller nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which should reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
(l) Chief Executive Office; Chief Operating Office. Each Seller's chief
executive office and chief operating office on the Effective Date is located at
538 Broadhollow Road, Melville, New York 11747.
(m) Location of Books and Records. The location where the Seller keeps
its books and records including all computer tapes and records relating to the
Purchased Items is its chief executive office or chief operating office or the
offices of the Custodian.
(n) True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Seller to the Buyer in connection with the negotiation, preparation or delivery
of this Agreement and the other Program Documents or included herein or therein
or delivered pursuant hereto or thereto, when taken as a whole, do not contain
any untrue
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statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written information furnished after the date
hereof by or on behalf of the Seller to the Buyer in connection with this
Agreement and the other Program Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of projections) based on reasonable estimates, on the
date as of which such information is stated or certified. There is no fact known
to a Responsible Officer that, after due inquiry, could reasonably be expected
to have a Material Adverse Effect that has not been disclosed herein, in the
other Program Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Buyer for use in connection
with the transactions contemplated hereby or thereby.
(o) Net Worth; Tangible Net Worth; Liquidity; Committed Warehouse
Facilities. American Home Mortgage Corp.'s Tangible Net Worth is not less than
$21,000,000, American Home Mortgage Acceptance, Inc.'s Tangible Net Worth is not
less than $41,000,000, and American Home Mortgage Investment Corp.'s Tangible
Net Worth is not less than the sum of (i) $685,000,000 plus (ii) 75% of the
aggregate amount of any capital raised through its equity issuances after June
30, 2005. Each Seller's Tangible Net Worth is not less than 80% of such Seller's
Net Worth as of June 30, 2005. The Sellers have combined Cash Equivalents in an
amount not less than $20,000,000. The minimum ratio of (i) the sum of the
products of the book values (as determined in accordance with GAAP) of the
consolidated assets of Seller and their subsidiaries times the percentage
multiplier for each such class agreed to by Buyer to (ii) the sum of (a) the
consolidated funded debt of Seller and any other Person which would be reflected
on the consolidated balance sheet of Seller prepared in accordance with GAAP if
such balance sheet were prepared as of such date of determination, less (b) 50%
of any subordinated debt, less (c) the mortgage debt associated with the
building and the land located at 538 Broadhollow Road, Melville, New York, is
1:1 (or such higher ratio provided under any other repurchase, financing, credit
or other similar facility entered into by such Seller). Each Seller shall at all
times have cash, Cash Equivalents and unused borrowing capacity on unencumbered
assets that could be drawn against (taking into account required haircuts) under
committed warehouse and repurchase facilities in an amount equal to not less
than $50,000,000. Each Seller has at least one committed warehouse facility with
a lender other than Buyer or any of its affiliates, for wet and dry mortgage
loans of "A", "Alt-A", "B", "C" and "D" credit quality originated or acquired by
such Seller, which facility shall have a term at least equal to that provided
under this Agreement in an amount equal to not less than $500,000,000 (with not
less than $50,000,000 available for wet mortgage loans).
(p) ERISA. Each Plan to which the Seller or its Subsidiaries make
direct contributions, and, to the knowledge of the Seller, each other Plan and
each Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law. No event or
condition has occurred and is continuing as to which the Seller would be under
an obligation to furnish a report to the Buyer under Section 13(a)(iv) hereof.
(q) Licenses. The Buyer will not be required as a result of purchasing
the Loans to be licensed, registered or approved or to obtain permits or
otherwise qualify (i) to do business in any state in which it currently so
required or (ii) under any state or other jurisdiction's consumer lending, fair
debt collection or other applicable state or other jurisdiction's statute or
regulation.
(r) Relevant States. Schedule 1 sets forth all of the states or other
jurisdictions (the "Relevant States") in which the Seller originates Loans in
its own name or through brokers on the date of this Agreement.
(s) True Sales. Any and all interest of a Qualified Originator in, to
and under any Mortgage funded in the name of or acquired by such Qualified
Originator or seller which is an Affiliate of the Seller
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has been sold, transferred, conveyed and assigned to the Seller pursuant to a
legal sale and such Qualified Originator retains no interest in such Loan, and
if so requested by the Buyer, such sale is covered by an opinion of counsel to
that effect in form and substance reasonably acceptable to the Buyer.
(t) No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Seller or any of its Subsidiaries has a Material Adverse
Effect.
(u) Subsidiaries. All of the Subsidiaries of the Seller at the date
hereof are listed on Schedule 4 to this Agreement.
(v) Origination and Acquisition of Loans. The Loans were originated or
acquired by the Seller, and the origination and collection practices used by the
Seller or Qualified Originator, as applicable, with respect to the Loans have
been, in all material respects legal, proper, prudent and customary in the
residential mortgage loan origination and servicing business, and in accordance
with the Underwriting Guidelines. With respect to Loans acquired by the Seller,
all such Loans are in conformity with the Underwriting Guidelines. Each of the
Loans complies with the representations and warranties listed in Schedule 1
hereto.
(w) No Adverse Selection. The Seller used no selection procedures that
identified the Loans as being less desirable or valuable than other comparable
Loans owned by the Seller.
(x) Seller |
