EXHIBIT 10.1
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AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as buyer
("Buyer", which term shall include any "Principal"
as defined and provided for in Annex I) or as agent pursuant hereto ("Agent"),
THE NEW YORK MORTGAGE COMPANY, LLC
a seller ("Seller"),
NEW YORK MORTGAGE FUNDING, LLC
a seller ("Seller"), and
NEW YORK MORTGAGE TRUST, INC, as
the parent guarantor (the "Parent Guarantor")
Dated March 30, 2005
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TABLE OF CONTENTS
Page
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1 Applicability........................................................................................... 1
2 Definitions............................................................................................. 1
3 Program; Initiation of Transactions..................................................................... 21
4 Repurchase.............................................................................................. 23
5 Differential............................................................................................ 24
6 Margin Maintenance...................................................................................... 25
7 Income Payments......................................................................................... 25
8 Security Interest....................................................................................... 26
9 Payment and Transfer.................................................................................... 27
10 Conditions Precedent.................................................................................... 27
11 Program; Costs.......................................................................................... 30
12 Servicing............................................................................................... 31
13 Representations and Warranties.......................................................................... 32
14 Covenants............................................................................................... 38
15 Events of Default....................................................................................... 44
16 Remedies Upon Default................................................................................... 48
17 Reports................................................................................................. 50
18 Repurchase Transactions................................................................................. 53
19 Single Agreement........................................................................................ 53
20 Notices and Other Communications........................................................................ 53
21 Entire Agreement; Severability.......................................................................... 55
22 Non assignability....................................................................................... 55
23 Set-off................................................................................................. ▇▇
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▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; Governing Law; Jurisdiction............................................................. 56
25 No Waivers, Etc......................................................................................... 56
26 Intent.................................................................................................. 57
27 Disclosure Relating to Certain Federal Protections...................................................... 57
28 Power of Attorney....................................................................................... 58
29 Buyer May Act Through Affiliates........................................................................ 58
30 Indemnification; Obligations............................................................................ 58
31 Counterparts............................................................................................ 59
32 Confidentiality......................................................................................... 59
33 Recording of Communications............................................................................. 60
34 Non Utilization Fee..................................................................................... 60
35 Periodic Due Diligence Review........................................................................... 60
36 Authorizations.......................................................................................... 61
37 Acknowledgement Of Anti-Predatory Lending Policies...................................................... 61
38 Documents Mutually Drafted.............................................................................. 61
39 Joint and Several....................................................................................... 61
SCHEDULES
Schedule 1 - Representations and Warranties with Respect to Purchased Mortgage
Loans
Schedule 2 - Authorized Representatives
Schedule 3 - Approved Third Party Originators
ANNEXES
Annex I - Buyer Acting as Agent
Annex II - Non-Utilization Fee Formula
EXHIBITS
Exhibit A - Form of Transaction Request
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Exhibit B - Form of Purchase Confirmation
Exhibit C - Form of Custodial Mortgage Loan Schedule
Exhibit D - Form of Officer's Compliance Certificate
Exhibit E - Form of Guaranty
Exhibit F - Form of Opinion of Sellers' and Guarantor's counsel
Exhibit H - List of Preferred Takeout Investors
Exhibit I - Officer's Certificate of the Sellers
Exhibit J - Sellers' Tax Identification Number
Exhibit K - Existing Indebtedness
Exhibit L - RESERVED
Exhibit M - Escrow Instruction Letter
Exhibit N - Custodial and Bank Fee Schedule
Exhibit O - Form of Servicer Notice
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This is an AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated
as of March 30, 2005, between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
(the "Buyer"), THE NEW YORK MORTGAGE COMPANY, LLC (a "Seller" or "NYMC"), NEW
YORK MORTGAGE FUNDING, LLC (a "Seller" or "NYMF", and together with NYMC, the
"Sellers") and New York Mortgage Trust, Inc. (the "Parent Guarantor").
The Buyer and NYMC are parties to that certain Master Repurchase
Agreement, dated as of March 30, 2005, as amended by Amendment No. 1, dated as
of December 4, 2002, Amendment No. 2, dated as of February 20, 2003, Amendment
No. 3, dated as of April 22, 2003, Amendment No. 4, dated as of July 1, 2003,
Amendment No. 5, dated as of July 7, 2003, Amendment No. 6, dated as of July 31,
2003, Amendment No. 7, dated as of August 4, 2003, Amendment No. 8, dated as of
August 9, 2003, Amendment No. 9, dated as of August 28, 2003, Amendment No. 10,
dated as of September 17, 2003, Amendment No. 11, dated as of October 1, 2003,
Amendment No. 12, dated as of October 31, 2003, Amendment No. 13, dated as of
January 7, 2004, Amendment No. 14, dated as of April 8, 2004, Amendment No. 15,
dated as of April 27, 2004, Amendment No. 16, dated as of May 6, 2004, Amendment
No. 17, dated as of June 30, 2004, Amendment No. 18, dated as of August 17,
2004, Amendment No. 19, dated as of October 1, 2004 and Amendment No. 20, dated
as of October 14, 2004 (the "Existing Repurchase Agreement"; as amended by this
Amendment, the "Repurchase Agreement").
The parties have requested that the Existing Master Repurchase
Agreement be amended and restated on the terms and conditions set forth herein.
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in
which Sellers agree to transfer to Buyer Mortgage Loans (as hereinafter defined)
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer
to transfer to Sellers such Mortgage Loans at a date certain or on demand,
against the transfer of funds by Sellers. Each such transaction shall be
referred to herein as a "Transaction" and, unless otherwise agreed in writing,
shall be governed by this Agreement, including any supplemental terms or
conditions contained in any annexes identified herein, as applicable hereunder.
2. DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Acceptable State" means any state acceptable pursuant to Sellers'
Underwriting Guidelines.
"Accepted Servicing Practices" means, with respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.
"Act of Insolvency" means, with respect to any Person or its
Affiliates, (i) the filing of a petition, commencing, or authorizing the
commencement of any case or proceeding, or the voluntary joining of any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law relating to the protection of creditors, or suffering
any such petition or proceeding to be commenced by another which is consented
to, not timely contested or results in entry of an order for relief; (ii) the
seeking of the appointment of a receiver, trustee, custodian or similar official
for such party or an Affiliate or any substantial part of the property of
either; (iii) the appointment of a receiver, conservator, or manager for such
party or an Affiliate by any governmental agency or authority having the
jurisdiction to do so; (iv) the making or offering by such party or an Affiliate
of a composition with its creditors or a general assignment for the benefit of
creditors; (v) the admission by such party or an Affiliate of such party of its
inability to pay its debts or discharge its obligations as they become due or
mature; or (vi) that any governmental authority or agency or any person, agency
or entity acting or purporting to act under governmental authority shall have
taken any action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the property of such party or of any
of its Affiliates, or shall have taken any action to displace the management of
such party or of any of its Affiliates or to curtail its authority in the
conduct of the business of such party or of any of its Affiliates.
"Adjusted Tangible Net Worth" means, for any Person, Net Worth of
such Person plus Subordinated Debt (provided that Subordinated Debt shall not be
taken into account to the extent that it would be greater than 25% of Adjusted
Tangible Net Worth to be comprised of Subordinated Debt), minus all intangible
assets, including capitalized servicing rights, goodwill, patents, tradenames,
trademarks, copyrights, franchises, any organization expenses, deferred
expenses, receivables from shareholders, Affiliates or employees, and any other
asset as shown as an intangible asset on the balance sheet of the Sellers on a
consolidated basis as determined at a particular date in accordance with GAAP.
"Affiliate" means, with respect to any Person, any "affiliate" of
such Person, as such term is defined in the Bankruptcy Code.
"Aged Loan" means a Mortgage Loan which is an Aged 60 Day Loan or an
Aged 120 Day Loan.
"Aged 60 Day Loan" means a Mortgage Loan which has been subject to a
Transaction hereunder for a period of greater than 60 days but not greater than
120 days.
"Aged 120 Day Loan" means a Mortgage Loan which has been subject to
a Transaction hereunder for a period of greater than 120 days but not greater
than 150 days.
"Agency" means ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or GNMA, as applicable.
"Agency Security" means a mortgage-backed security issued by an
Agency.
"Agent" means Credit Suisse First Boston Mortgage Capital LLC or any
affiliate or successor thereto.
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"Agreement" means this Amended and Restated Master Repurchase
Agreement, as it may be amended, supplemented or otherwise modified from time to
time.
"Alt-A Mortgage Loan" means a first lien Mortgage Loan originated in
accordance with the criteria established by Buyer for Alt-A Mortgage Loans, as
approved by Buyer in its sole discretion and which has a FICO score of at least
620.
"Appraised Value" means the value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
"Approved Third Party Originator" shall mean an Approved Third Party
Originator of Eligible Mortgage Loans identified on Schedule 3 as amended from
time to time in accordance with Section 3(g) hereof.
"Asset Tape" means a remittance report on a monthly basis or
requested by Buyer pursuant to Section 17d hereof containing servicing
information, including, without limitation, those fields reasonably requested by
Buyer from time to time, on a loan-by-loan basis and in the aggregate, with
respect to the Purchased Mortgage Loans serviced by Sellers or any Servicer for
the month (or any portion thereof) prior to the Reporting Date.
"Assignment of Mortgage" means 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 sale of the Mortgage to Buyer.
"Bailee Letter" has the meaning assigned to such term in the
Custodial Agreement.
"Bankruptcy Code" means the United States Bankruptcy Code of 1978,
as amended from time to time.
"Bid" has the meaning set forth in Section 4(c) hereof.
"Bid Fee" has the meaning set forth in Section 4(c) hereof.
"BPO" means an opinion of the fair market value of a Mortgaged
Property given by a licensed real estate agent or broker which generally
includes three comparable sales and three comparable listings.
"Business Day" means any day other than (A) a Saturday or Sunday and
(B) a public or bank holiday in New York City.
"Buydown Amount" has the meaning set forth in Section 5(c) hereof.
"Buyer" means Credit Suisse First Boston Mortgage Capital LLC, and
any successor hereunder.
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"Buyer's Margin Amount" means with respect to any Transaction as of
any date of determination, an amount equal to the product of (A) Buyer's Margin
Percentage and (B) the Purchase Price for such Transaction.
"Buyer's Margin Percentage" means, with respect to any Transaction
as of any date, a percentage equal to the percentage obtained by dividing the
(A) Market Value of the Purchased Mortgage Loans on the Purchase Date for such
Transaction by (B) the Purchase Price on the Purchase Date for such Transaction;
provided, that, with respect to any Mortgage Loan which was not an Exception
Mortgage Loan on the related Purchase Date and which, as of the date of
determination, is an Exception Mortgage Loan, Buyer's Margin Percentage as of
such date of determination shall be equal to the percentage obtained by dividing
(A) the Market Value of such Mortgage Loan on the related Purchase Date by (B)
the amount the Purchase Price would have been on the Purchase Date if such
Mortgage Loan had been categorized as the type of Mortgage Loan (e.g., Exception
Mortgage Loan, etc.) that it is categorized on the date of determination.
"Capital Lease Obligations" means, 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.
"Change in Control" means:
(A) any transaction or event as a result of which New York
Mortgage Trust, Inc. shall cease to own, collectively, beneficially or of
record, 100% of the stock of Sellers;
(B) the sale, transfer, or other disposition of all or
substantially all of a Seller's or the Parent Guarantor's assets
(excluding any such action taken in connection with any securitization
transaction); or
(C) the consummation of a merger or consolidation of a Seller or
the Parent Guarantor with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the
continuing or surviving entity's stock outstanding immediately after such
merger, consolidation or such other reorganization is owned by persons who
were not stockholders of such Seller or the Parent Guarantor immediately
prior to such merger, consolidation or other reorganization.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" means one or more accounts established by the
Servicer for the benefit of Buyer, into which all collections and proceeds on or
in respect of the Mortgage Loans shall be deposited by Servicer.
"Committed Mortgage Loan" means a Mortgage Loan which is the subject
of a Take-out Commitment with a Take-out Investor.
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"Conforming Mortgage Loan" means a first lien Mortgage Loan
originated in accordance with the criteria of an Agency for purchase of Mortgage
Loans, including, without limitation, conventional Mortgage Loans, FHA Loans and
VA Loans, as determined by Buyer in its sole discretion.
"Consolidated" means for any Person, and any calculation, such
Person and its consolidated Subsidiaries.
"Construction Mortgage Loan" means a Committed Mortgage Loan
originated for the purpose of performing construction work on the Mortgaged
Property, eligible for purchase by at least two Takeout Investors.
"Credit Limit" means, with respect to each HELOC, the maximum amount
permitted under the terms of the related Credit Line Agreement.
"Credit Line Agreement" means, with respect to each HELOC, the
related home equity line of credit agreement, account agreement and promissory
note (if any) executed by the related Mortgagor and any amendment or
modification thereof.
"Custodial Agreement" means the custodial agreement dated as of the
date hereof, among Sellers, Buyer and Custodian as the same may be amended from
time to time.
"Custodial Mortgage Loan Schedule" has the meaning assigned to such
term in the Custodial Agreement.
"Custodian" means LaSalle Bank, National Association or such other
party specified by Buyer and agreed to by each Seller, which approval shall not
be unreasonably withheld.
"Default" means an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Draw" means, with respect to each HELOC, an additional borrowing by
the Mortgagor in accordance with the related Credit Line Agreement.
"Due Date" means the day of the month on which the Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace.
"Effective Date" means the date upon which the conditions precedent
set forth in Section 10 shall have been satisfied.
"Electronic Tracking Agreement" means an Electronic Tracking
Agreement among Buyer, Sellers, MERS and MERSCORP, Inc., to the extent
applicable as the same may be amended from time to time.
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"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means 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 either 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 either
Seller is a member.
"Escrow Instruction Letter" means the Escrow Instruction Letter from
the applicable Seller to the Settlement Agent, in the form of Exhibit M hereto,
as the same may be modified, supplemented and in effect from time to time.
"Escrow Payments" means, with respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
"Event of Default" has the meaning specified in Section 15 hereof.
"Event of Termination" means with respect to Sellers or the Parent
Guarantor (i) with respect to any Plan, a reportable event, as defined in
Section 4043 of ERISA, as to which the PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified with 30 days of the
occurrence of such event, or (ii) the withdrawal of either Seller, the Parent
Guarantor or any ERISA Affiliate thereof from a Plan during a plan year in which
it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or
(iii) the failure by either Seller, the Parent Guarantor or any ERISA Affiliate
thereof to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA with respect to any Plan, including, without limitation,
the failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, or (iv) the distribution
under Section 4041 of ERISA of a notice of intent to terminate any Plan or any
action taken by a Seller, the Parent Guarantor or any ERISA Affiliate thereof to
terminate any plan, or (v) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a part if
either Seller, the Parent Guarantor or any ERISA Affiliate thereof fails to
timely provide security to the Plan in accordance with the provisions of said
sections, or (vi) the institution by the PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan, or (vii) the receipt by either Seller, the Parent Guarantor or any
ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the
type described in the previous clause (vi) has been taken by the PBGC with
respect to such Multiemployer Plan, or (viii) any event or circumstance exists
which may reasonably be expected to constitute grounds for either Seller, the
Parent Guarantor or any ERISA Affiliate thereof to incur liability under Title
IV of ERISA or under Sections 412(c)(11) or 412(n) of the Code with respect to
any Plan.
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"Exception Mortgage Loan" means any Mortgage Loan which is otherwise
ineligible for purchase hereunder, or which otherwise becomes ineligible for
purchase hereunder and which is approved by Buyer in its sole discretion;
provided, however, that Sellers shall pay to Buyer a fee of $25 with respect to
any such approval of an Exception Mortgage Loan other than a Wet-Ink Mortgage
Loan and $10 with respect to any such approval of an Exception Mortgage Loan
which is a Wet-Ink Mortgage Loan; and provided, that upon 30 days' notice to the
Sellers, Buyer may change such Exception Mortgage Loan approval fee. Buyer's
approval of a Mortgage Loan as an Exception Mortgage Loan shall expire on the
earlier of (a) the date set forth by the Buyer in the written notice that such
Mortgage Loan is approved as an Exception Mortgage Loan (an "Exception Notice")
or (b) the occurrence of any additional event, other than that set forth in the
Exception Notice, which would cause the Mortgage Loan to become ineligible for
purchase hereunder. The Pricing Rate, Market Value, Purchase Price and Buyer's
Margin Percentage with respect to Exception Mortgage Loans shall be set in the
sole discretion of Buyer. Buyer may at any time, and in its sole discretion, no
longer consider a Mortgage Loan an Exception Mortgage Loan, in which case such
Mortgage Loan shall have a Market Value of zero.
"Existing Indebtedness" has the meaning specified in Section
13(a)(23) hereof.
"▇▇▇▇▇▇ ▇▇▇" means ▇▇▇▇▇▇ Mae, the government sponsored enterprise
formerly known as the Federal National Mortgage Association.
"FHA" means the Federal Housing Administration, an agency within the
United States Department of Housing and Urban Development, or any successor
thereto, and including the Federal Housing Commissioner and the Secretary of
Housing and Urban Development where appropriate under the FHA Regulations.
"FHA Approved Mortgagee" means a corporation or institution approved
as a mortgagee by the FHA under the National Housing Act, as amended from time
to time, and applicable FHA Regulations, and eligible to own and service
mortgage loans such as the FHA Loans.
"FHA Loan" means a Mortgage Loan which is the subject of an FHA
Mortgage Insurance Contract.
"FHA Mortgage Insurance" means, mortgage insurance authorized under
the National Housing Act, as amended from time to time, and provided by the FHA.
"FHA Mortgage Insurance Contract" means the contractual obligation
of the FHA respecting the insurance of a Mortgage Loan.
"FHA Regulations" means the regulations promulgated by the
Department of Housing and Urban Development under the National Housing Act, as
amended from time to time and codified in 24 Code of Federal Regulations, and
other Department of Housing and Urban Development issuances relating to FHA
Loans, including the related handbooks, circulars, notices and mortgagee
letters.
"FICO" means Fair ▇▇▇▇▇ & Co., or any successor thereto.
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"Fidelity Insurance" shall mean insurance coverage with respect to
employee errors, omissions, dishonesty, forgery, theft, disappearance and
destruction, robbery and safe burglary, property (other than money and
securities) and computer fraud in an aggregate amount acceptable to Sellers'
regulators.
"Foreclosed Loan" means a Mortgage Loan, the property securing which
has been foreclosed upon by a Seller.
"▇▇▇▇▇▇▇ Mac" means the Federal Home Loan Mortgage Corporation or
any successor thereto.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America and applied on a consistent basis.
"GNMA" means the Government National Mortgage Association and any
successor thereto.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions over either
Seller, Parent Guarantor or Buyer, as applicable.
"Gross Margin" means, with respect to each adjustable rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note.
"Guarantee" means, 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 required by 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.
"HELOC" means a home equity revolving line of credit secured by a
mortgage, deed of trust or other instrument creating a second lien on the
related Mortgaged Property, which lien secures the related line of credit and
(i) that is underwritten in accordance with each Seller's Underwriting
Guidelines and (ii) that either (a) will be sold or securitized by either Seller
or (b) is subject to a Take-out Commitment.
"High Cost Mortgage Loan" means a Mortgage Loan classified as (a) a
"high cost" loan under the Home Ownership and Equity Protection Act of 1994 or
(b) a "high cost," "threshold," "covered," or "predatory" loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law, regulation or ordinance
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imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees).
"Income" means with respect to any Purchased Mortgage Loan at any
time until repurchased by a Seller, any principal received thereon or in respect
thereof and all interest, dividends or other distributions thereon.
"Indebtedness" means, 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 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 the account of such Person; (e) Capital Lease Obligations of such Person;
(f) obligations of such Person under repurchase agreements, sale/buy-back
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; and (i) Indebtedness of
general partnerships of which such Person is a general partner.
"Index" means, with respect to any adjustable rate Mortgage Loan,
the index identified on the Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the applicable Mortgage Interest
Rate.
"Interest Rate Adjustment Date" means the date on which an
adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan
becomes effective.
"Interest Rate Protection Agreement" means, with respect to any or
all of the Purchased Mortgage Loans, any short sale of a US Treasury Security,
or futures contract, or mortgage related security, or Eurodollar futures
contract, or options related contract, or interest rate swap, cap or collar
agreement or Take-out Commitment, or similar arrangement providing for
protection against fluctuations in interest rates or the exchange of nominal
interest obligations, either generally or under specific contingencies, entered
into by a Seller and an Affiliate of Buyer or such other party acceptable to
Buyer in its sole discretion, which agreement is acceptable to Buyer in its sole
discretion.
"Jumbo Mortgage Loan" means an A quality first lien Mortgage Loan
which is not eligible for sale to an Agency.
"LIBOR" means for each day, the rate of interest (calculated on a
per annum basis) equal to the overnight British Bankers Association Rate as
reported on the display designated as "BBAM" "Page ▇▇▇ ▇▇" on Bloomberg (or such
other display as may replace
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"BBAM" "Page ▇▇▇ ▇▇" on Bloomberg) on such date of determination, and if such
rate shall not be so quoted, the rate per annum at which Buyer is offered Dollar
deposits at or about 11:00 a.m., (New York City time), on such day, by prime
banks in the interbank eurodollar market where the eurodollar and foreign
currency exchange operations in respect of its loans are then being conducted
for delivery on such day for an overnight period, and in an amount comparable to
the amount of the Purchase Price of Transactions to be outstanding on such day.
"Lien" means any mortgage, lien, pledge, charge, security interest
or similar encumbrance.
"Loan-to-Value Ratio or LTV" means with respect to any Mortgage
Loan, the ratio of the original outstanding principal amount of the Mortgage
Loan, with respect to a Mortgage Loan other than a HELOC, or the original Credit
Limit, with respect to a HELOC, and, with respect to any Second Lien Mortgage
Loan, the outstanding principal amount of any related first lien as of the date
of origination of such mortgage loan, to the lesser of (a) the Appraised Value
of the related Mortgaged Property at origination or (b) if the Mortgaged
Property was purchased within 12 months of the origination of such Mortgage
Loan, the purchase price of the related Mortgaged Property.
"Margin Call" has the meaning specified in Section 6(a) hereof.
"Margin Deadline" has the meaning specified in Section 6(b) hereof.
"Margin Deficit" has the meaning specified in Section 6(a) hereof.
"Market Value" means, with respect to any Purchased Mortgage Loan as
of any date of determination, the whole-loan servicing-released fair market
value of such Purchased Mortgage Loan on such date as determined by Buyer (or an
Affiliate thereof) in its sole discretion. Without limiting the generality of
the foregoing, each Seller acknowledges that (a) in the event that a Purchased
Mortgage Loan is not subject to a Take-out Commitment, Buyer may deem the Market
Value for such Mortgage Loan to be no greater than par and (b) the Market Value
of a Purchased Mortgage Loan may be reduced to zero by Buyer if:
(i) a breach of a representation, warranty or covenant made
by a Seller in this Agreement with respect to such Purchased
Mortgage Loan has occurred and is continuing;
(ii) such Purchased Mortgage Loan is a Non-Performing
Mortgage Loan;
(iii) such Purchased Mortgage Loan is a Construction Mortgage
Loan and has been subject to a Transaction for a period in excess of
thirty (30) calendar days;
(iv) such Purchased Mortgage Loan was originated by an
Approved Third Party Originator and not owned by a Seller for more
than two (2) Business Days prior to the related Purchase Date;
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(v) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement (other
than to a Take-out Investor pursuant to a Bailee Letter) for a
period in excess of ten (10) calendar days;
(vi) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement to a
Take-out Investor pursuant to a Bailee Letter for a period in excess
of 45 calendar days;
(vii) such Purchased Mortgage Loan has been subject to a
Transaction hereunder for a period of greater than (a) 60 days for
all Mortgage Loans other than Aged Loans (b) 120 days with respect
to each Aged 60 Day Loan or (c) 150 days with respect to each Aged
120 Day Loan;
(viii) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan
for which the Mortgage File has not been delivered to the Custodian
on or prior to the seventh Business Day after the related Purchase
Date;
(ix) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all Mortgage Loans that were originated by an
Approved Third Party Originator exceeds $100 million;
(x) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all Aged 60 Day Loans that are Purchased Mortgage
Loans exceeds $100 million;
(xi) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all Aged 120 Day Loans that are Purchased Mortgage
Loans exceeds $50 million;
(xii) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all Alt-A Mortgage Loans that are Purchased
Mortgage Loans exceeds $90 million;
(xiii) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all Sub-Prime Mortgage Loans that are Purchased
Mortgage Loans exceeds $20 million;
(xiv) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all Construction Mortgage Loans that are Purchased
Mortgage Loans exceeds $5 million;
(xv) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all
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Second Lien Mortgage Loans that are Purchased Mortgage Loans exceeds
$15 million;
(xvi) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all HELOCs that are Purchased Mortgage Loans
exceeds $8 million;
(xvii) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate
Purchase Price of all Wet-Ink Mortgage Loans that are Purchased
Mortgage Loans exceeds 30% of the Maximum Aggregate Purchase Price;
or
(xviii) such Purchased Mortgage Loan is no longer acceptable
for purchase by Buyer (or an Affiliate thereof) under any of the
flow purchase or conduit programs for which a Seller then has been
approved due to a Requirement of Law relating to consumer credit
laws or otherwise.
"Material Adverse Effect" means (a) a material adverse change in, or
a material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of either Seller, Parent Guarantor or any
Affiliate that is a party to any Program Agreement taken as a whole; (b) a
material impairment of the ability of a Seller, Parent Guarantor or any
Affiliate that is a party to any Program Agreement to perform under any Program
Agreement and to avoid any Event of Default; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability of any Program
Agreement against a Seller, Parent Guarantor or any Affiliate that is a party to
any Program Agreement.
"Maximum Aggregate Purchase Price" means TWO HUNDRED MILLION DOLLARS
($200,000,000).
"MERS" means Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
"MERS System" means the system of recording transfers of mortgages
electronically maintained by MERS.
"Monthly Payment" means the scheduled monthly payment of principal
and interest on a Mortgage Loan.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successors
thereto.
"Mortgage" means each mortgage, assignment of rents, security
agreement and fixture filing, or deed of trust, assignment of rents, security
agreement and fixture filing, deed to secure debt, assignment of rents, security
agreement and fixture filing, or similar instrument creating and evidencing a
lien on real property and other property and rights incidental thereto.
"Mortgage File" means, with respect to a Mortgage Loan, the
documents and instruments relating to such Mortgage Loan and set forth in
Exhibit F to the Custodial Agreement.
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"Mortgage Interest Rate" means the rate of interest borne on a
Mortgage Loan from time to time in accordance with the terms of the related
Mortgage Note.
"Mortgage Interest Rate Cap" means, with respect to an adjustable
rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set
forth in the related Mortgage Note.
"Mortgage Loan" means any Sub-Prime Mortgage Loan, Construction
Mortgage Loan, Exception Mortgage Loan, Jumbo Mortgage Loan, Alt-A Mortgage
Loan, HELOC's, Second Lien Mortgage Loan or Conforming Mortgage Loan which is a
closed-end, fixed or floating-rate, one-to-four-family residential mortgage or
home equity loan evidenced by a promissory note and secured by a mortgage, which
satisfies the requirements set forth in the Underwriting Guidelines and Section
13(b) hereof; provided, however, that, except as expressly approved in writing
by Buyer, Mortgage Loans shall not include any "high-LTV" loans (i.e., a
mortgage loan having a loan-to-value ratio in excess of 100% or in excess of
such lower percentage set forth in the Underwriting Guidelines or with respect
to Second Lien Mortgage Loans, a combined loan-to value ratio, in excess of the
lower of (i) the percentage specified in the Underwriting Guidelines or (ii)
100%) or any High Cost Mortgage Loans and; provided, further, that the
origination date with respect to such Mortgage Loan is no earlier than thirty
(30) days prior to the related Purchase Date.
"Mortgage Loan Documents" means the documents in the related
Mortgage File to be delivered to the Custodian.
"Mortgage Loan Schedule" means with respect to any Transaction as of
any date, a mortgage loan schedule in the form of either (a) Exhibit C attached
hereto or (b) a computer tape or other electronic medium generated by Sellers
and delivered to Buyer and Custodian, which provides information (including,
without limitation, the information set forth on Exhibit C attached hereto)
relating to the Purchased Mortgage Loans in a format acceptable to Buyer.
"Mortgage Note" means the promissory note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
"Mortgaged Property" means the real property securing repayment of
the debt evidenced by a Mortgage Note.
"Mortgagor" means the obligor or obligors on a Mortgage Note,
including any person who has assumed or guaranteed the obligations of the
obligor thereunder.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by either Seller or any ERISA Affiliate and that is covered by Title IV of
ERISA.
"Net Income" means, for any period and any Person, the net income of
such Person for such period as determined in accordance with GAAP.
"Net Worth" means, with respect to any Person, an amount equal to,
on a consolidated basis, such Person's stockholder equity (determined in
accordance with GAAP).
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"1934 Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Non-Performing Mortgage Loan" means (i) any Mortgage Loan for which
any payment of principal or interest is more than twenty-nine (29) days past
due, (ii) any Mortgage Loan with respect to which the related mortgagor is in
bankruptcy or (iii) any Mortgage Loan with respect to which the related
mortgaged property is in foreclosure.
"Notice Date" has the meaning given to it in Section 3(b) hereof.
"Obligations" means (a) all of Sellers' indebtedness, obligations to
pay the Repurchase Price on the Repurchase Date, the Price Differential on each
Price Differential Payment Date, and other obligations and liabilities, to
Buyer, its Affiliates or Custodian arising under, or in connection with, the
Program Agreements, whether now existing or hereafter arising; (b) any and all
sums paid by Buyer or on behalf of Buyer in order to preserve any Purchased
Mortgage Loan or its interest therein; (c) in the event of any proceeding for
the collection or enforcement of any of Sellers' 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 Mortgage Loan, or of any exercise by Buyer of its
rights under the Program Agreements, including, without limitation, attorneys'
fees and disbursements and court costs; and (d) all of Sellers' indemnity
obligations to Buyer or Custodian or both pursuant to the Program Agreements.
"OFAC" has the meaning set forth in Section 13(a)(28) hereof.
"Olympus" means Olympus Servicing L.P., or any successor in interest
thereto.
"Parent Guarantor" means New York Mortgage Trust, Inc., in its
capacity as guarantor under the Parent Guaranty.
"Parent Guaranty" means the guaranty of the Parent Guarantor dated
as of July 8, 2004, as amended from time to time, pursuant to which the Parent
Guarantor fully and unconditionally guarantees the obligations of the Sellers
hereunder pursuant to the terms thereof.
"PBCG" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Plan" means an employee benefit or other plan established or
maintained by any Seller or any ERISA Affiliate and covered by Title IV of
ERISA, other than a Multiemployer Plan.
"Post Default Rate" means an annual rate of interest equal to the
greater of (a) the Pricing Rate plus 3% or (b) the Mortgage Interest Rate.
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"Preferred Committed Mortgage Loan" means any Committed Mortgage
Loan subject to a Takeout Commitment with a Preferred Takeout Investor.
"Preferred Takeout Investor" means the Buyer-approved Takeout
Investors listed on Exhibit H hereto as supplemented from time to time at the
reasonable discretion of the Buyer; provided, that Buyer shall have the right to
notify the Sellers of its withdrawal of approval of any Preferred Takeout
Investor, in its reasonable discretion.
"Price Differential" means with respect to any Transaction as of any
date of determination, an amount equal to the product of (A) the Pricing Rate
for such Transaction and (B) the Purchase Price for such Transaction, calculated
daily on the basis of a 360-day year for the actual number of days during the
period commencing on (and including) the Purchase Date for such Transaction and
ending on (but excluding) the Repurchase Date.
"Price Differential Payment Date" means, with respect to a Purchased
Mortgage Loan, the 5th day of the month following the related Purchase Date and
each succeeding 5th day of the month thereafter; provided, that, with respect to
such Purchased Mortgage Loan, the final Price Differential Payment Date shall be
the related Repurchase Date; and provided, further, that if any such day is not
a Business Day, the Price Differential Payment Date shall be the next succeeding
Business Day.
"Pricing Rate" means LIBOR plus:
(a) 0.75% with respect to Transactions the subject of which
are Conforming Mortgage Loans (other than Wet-Ink Mortgage Loans or
Aged Loans);
(b) 0.75% with respect to Transactions the subject of which
are Jumbo Mortgage Loans (other than Wet-Ink Mortgage Loans or Aged
Loans);
(c) 0.75% with respect to Transactions the subject of which
are Alt-A Mortgage Loans (other than Wet-Ink Mortgage Loans or Aged
Loans);
(d) 0.75% with respect to Transactions the subject of which
are HELOCs (other than Wet-Ink Mortgage Loans or Aged Loans); (e)
0.90% with respect to Transactions the subject of which are
Sub-Prime Mortgage Loans (other than Wet-Ink Mortgage Loans or Aged
Loans);
(f) 0.90% with respect to Transactions the subject of which
are Construction Mortgage Loans (other than Wet-Ink Mortgage Loans
or Aged Loans);
(g) 1.375% with respect to Transactions the subject of which
are Second Lien Mortgage Loans (other than Wet-Ink Mortgage Loans or
Aged Loans);
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(h) 2.00% with respect to Transactions the subject of which
are Aged Loans; and
(i) the rate determined in the sole discretion of Buyer with
respect to Transactions the subject of which are Exception Mortgage
Loans and any other Transactions so identified by the Buyer in
agreeing to enter into a Transaction with respect to such Exception
Mortgage Loan.
The Pricing Rate shall change in accordance with LIBOR, as provided
in Section 5(a).
"Principal" has the meaning given to it in Annex I.
"Program Agreements" means, collectively, the Custodial Agreement,
this Agreement, the Electronic Tracking Agreement, if entered into, the Parent
Guaranty and, with respect to each Exception Mortgage Loan, a Purchase
Confirmation.
"Prohibited Person" has the meaning set forth in Section 13(a)(28)
hereof.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Purchase Confirmation" means a confirmation of a Transaction, in
the form attached as Exhibit B hereto.
"Purchase Date" means the date on which Purchased Mortgage Loans are
to be transferred by Sellers to Buyer.
"Purchase Price" means the price at which each Purchased Mortgage
Loan is transferred by a Seller to Buyer, which shall equal:
(a) on the Purchase Date, in the case of Purchased Mortgage
Loans which are Jumbo Mortgage Loans, Conforming Mortgage Loans or
Alt-A Mortgage Loans the lesser of either: (x) the product of (1)
the Market Value of such Purchased Mortgage Loan multiplied by (2)
the applicable Purchase Price Percentage for such Mortgage Loan or
(y) the outstanding principal amount thereof as set forth on the
related Mortgage Loan Schedule;
(b) on the Purchase Date, in the case of Purchased Mortgage
Loans which are Second Lien Mortgage Loans the lesser of either:
(i) (x) with respect to Mortgage Loans other than
Preferred Committed Mortgage Loans the product of (1) the
outstanding principal amount thereof as set forth in the
Mortgage Loan Schedule multiplied by (2) the applicable
Purchase Price Percentage for such Mortgage Loan and (y) with
respect to Purchased Mortgage Loans which are Preferred
Committed Mortgage Loans, the outstanding principal amount
thereof as set forth in the Mortgage Loan Schedule or (ii) the
product of (1) the
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Market Value of such Purchased Mortgage Loan multiplied by (2)
the applicable Purchase Price Percentage for such Mortgage
Loan; or
(c) on the Purchase Date, in the case of Purchased Mortgage
Loans which are Sub-Prime Mortgage Loans, the product of the
applicable Purchase Price Percentage for such Mortgage Loan
multiplied by the lesser of either: (1) the Market Value of such
Purchased Mortgage Loan or (2) the outstanding principal amount
thereof as set forth on the related Mortgage Loan Schedule; or
(d) on any day after the Purchase Date, except where Buyer
and the Sellers agree otherwise, the amount determined under the
immediately preceding clauses (i) or (ii) decreased by the amount of
any cash transferred by the Sellers to Buyer pursuant to Section
4(c) hereof or applied to reduce the Sellers' obligations under
clause (ii) of Section 4(b) hereof or under Section 6 hereof.
"Purchase Price Percentage" means, with respect to each Mortgage
Loan, the following percentage, as applicable:
(a) 98% with respect to Purchased Mortgage Loans that are
Alt-A Mortgage Loans;
(b) 98% with respect to Purchased Mortgage Loans that are
Jumbo Mortgage Loans;
(c) 98% with respect to Transactions the subject of which \
are first lien Conforming Mortgage Loans;
(d) 98% with respect to Transactions the subject of which
are Construction Mortgage Loans;
(e) 97% with respect to Transactions the subject of which
are Sub-Prime Mortgage Loans;
(f) 96% with respect to Transactions the subject of which
are Second Lien Mortgage Loans;
(g) 96% with respect to Transactions the subject of which
are HELOCs;
(h) with respect to Transactions the subject of which are
Exception Mortgage Loans, a percentage to be determined by Buyer in
its sole discretion.
"Purchased Mortgage Loans" means the collective reference to
Mortgage Loans together with the Repurchase Assets related to such Mortgage
Loans transferred by a Seller to Buyer in a Transaction hereunder, listed on the
related Mortgage Loan Schedule attached to the related Transaction Request,
which such Mortgage Loans the Custodian has been instructed to hold pursuant to
the Custodial Agreement.
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"Qualified Insurer" means a mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
"Qualified Originator" means an originator of Mortgage Loans which
is acceptable under the Underwriting Guidelines.
"Records" means all instruments, agreements and other books,
records, and reports and data generated by other media for the storage of
information maintained by Sellers or Servicer or any other person or entity with
respect to a Purchased Mortgage Loan. Records shall include the Mortgage Notes,
any Mortgages, the Mortgage Files, the credit files related to the Purchased
Mortgage Loan and any other instruments necessary to document or service a
Mortgage Loan.
"REIT" means a real estate investment trust, as defined in Section
856 of the Code.
"REIT Status" means, with respect to any Person, such Person's
status as a real estate investment trust, as defined in Section 856(a) of the
Code, that satisfies the conditions and limitations set forth in Section 856(b)
and 856(c) of the Code.
"REO Property" means real property acquired by Sellers, including a
Mortgaged Property acquired through foreclosure of a Mortgage Loan or by deed in
lieu of such foreclosure.
"Reporting Date" means the 5th day of each month or, if such day is
not a Business Day, the next succeeding Business Day.
"Repurchase Assets" has the meaning assigned thereto in Section 8
hereof.
"Repurchase Date" means the earlier of (i) the Termination Date,
(ii) the date set forth in the applicable Purchase Confirmation, (iii) the date
determined by application of Section 16 hereof or (iv) the date identified to
Buyer by Sellers as the date that the related Mortgage Loan is to be sold
pursuant to a Take-out Commitment.
"Repurchase Price" means the price at which Purchased Mortgage Loans
are to be transferred from Buyer to Sellers upon termination of a Transaction,
which will be determined in each case (including Transactions terminable upon
demand) as the sum of the Purchase Price and the accrued but unpaid Price
Differential as of the date of such determination.
"Request for Certification" means a notice sent to the Custodian
reflecting the sale of one or more Purchased Mortgage Loans to Buyer hereunder.
"Requirement of Law" means, with respect to any Person, any law,
treaty, rule or regulation or determination of an arbitrator, a court or other
governmental authority, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
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"Responsible Officer" means shall mean, as to any Person, the chief
executive officer or, with respect to financial matters, the chief financial
officer of such Person.
"S&P" means Standard & Poor's Ratings Services, or any successor
thereto.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Second Lien Mortgage Loan" means a Mortgage Loan which is has a
second lien on the related Mortgaged Property.
"Seller" means, as applicable, either of The New York Mortgage
Company, LLC or New York Mortgage Funding, LLC or its permitted successors and
assigns.
"Servicer" means Olympus, or any other servicer approved by Buyer in
its sole discretion, which may be a Seller.
"Settlement Agent" means, with respect to any Transaction the
subject of which is a Wet-Ink Mortgage Loan, the entity approved by Buyer, in
its sole good-faith discretion, which may be a title company, escrow company or
attorney in accordance with local law and practice in the jurisdiction where the
related Wet-Ink Mortgage Loan is being originated. A Settlement Agent is deemed
approved unless Buyer notifies Sellers otherwise at any time electronically or
in writing.
"SIPA" means the Securities Investor Protection Act of 1970, as
amended from time to time.
"Subordinated Debt" means, Indebtedness of either Seller which is
(i) unsecured, (ii) no part of the principal of such Indebtedness is required to
be paid (whether by way of mandatory sinking fund, mandatory redemption,
mandatory prepayment or otherwise) prior to the date which is one year following
the Termination Date and (iii) the payment of the principal of and interest on
such Indebtedness and other obligations of such Seller in respect of such
Indebtedness are subordinated to the prior payment in full of the principal of
and interest (including post-petition obligations) on the Transactions and all
other obligations and liabilities of such Seller to Buyer hereunder on terms and
conditions approved in writing by Buyer and all other terms and conditions of
which are satisfactory in form and substance to Buyer.
"Sub-Prime Mortgage Loan" means a first lien Mortgage Loan
originated in accordance with the sub-prime lending guidelines of one of the
following national sub-prime mortgage buyers: Residential Funding Corporation,
Impac Funding Corporation, Household Mortgage Services, Inc., Countrywide Home
Loan, Inc., New Century Mortgage Corporation, First Franklin Financial
Corporation, CitiFinancial Mortgage Company, Inc. and such others approved by
Buyer in writing from time to time.
"Subsidiary" means, 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
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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.
"Take-out Commitment" means a commitment of a Seller to either (a)
sell one or more identified Mortgage Loans to a Take-out Investor or (b) (i)
swap one or more identified Mortgage Loans with a Take-out Investor that is an
Agency for an Agency Security, and (ii) sell the related Agency Security to a
Take-out Investor, and in each case, the corresponding Take-out Investor's
commitment back to such Seller to effectuate any of the foregoing, as
applicable. With respect to any Take-out Commitment with an Agency, the
applicable agency documents list Buyer as sole subscriber.
"Take-out Investor" means (i) an Agency or (ii) other institution
which has made a Take-out Commitment and has been approved by Buyer.
"Termination Date" means the earlier of (a) March 31, 2006, and (b)
the date of the occurrence of an Event of Default.
"Test Period" means any calendar quarter.
"Transaction" has the meaning set forth in Section 1 hereof.
"Transaction Request" means a request from a Seller to Buyer, in the
form attached as Exhibit A hereto, to enter into a Transaction.
"Trust Receipt and Certification" means, with respect to any
Transaction as of any date, a receipt and certification in the form attached as
an exhibit to the Custodial Agreement.
"Underwriting Guidelines" means the standards, procedures and
guidelines of Agencies and any Takeout Investor or Investors listed on Exhibit G
hereto for underwriting and acquiring Mortgage Loans, which guidelines as
acceptable to Buyer in its sole discretion.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York or the Uniform Commercial
Code as in effect in the applicable jurisdiction.
"VA" means the U.S. Department of Veterans Affairs, an agency of the
United States of America, or any successor thereto including the Secretary of
Veterans Affairs.
"VA Approved Lender" means a lender which is approved by the VA to
act as a lender in connection with the origination of VA Loans.
"VA Loan" means a Mortgage Loan which is subject of a VA Loan
Guaranty Agreement as evidenced by a VA Loan Guaranty Agreement, or a Mortgage
Loan which is a vender loan sold by the VA.
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"VA Loan Guaranty Agreement" means the obligation of the United
States to pay a specific percentage of a Mortgage Loan (subject to a maximum
amount) upon default of the Mortgagor pursuant to the Servicemen's Readjustment
Act, as amended.
"Violation Deadline" has the meaning assigned thereto in Section
4(c) hereof.
"Wet-Ink Documents" means, with respect to any Wet-Ink Mortgage
Loan, the (a) Transaction Request and (b) Mortgage Loan Schedule.
"Wet-Ink Mortgage Loan" means a Mortgage Loan which a Seller is
selling to Buyer simultaneously with the origination thereof.
3. PROGRAM; INITIATION OF TRANSACTIONS
a. From time to time, in the sole discretion of Buyer, Buyer will
purchase from Sellers certain Mortgage Loans that have been either
originated by Sellers or purchased by Sellers from other
originators. THIS AGREEMENT IS NOT A COMMITMENT BY BUYER TO ENTER
INTO TRANSACTIONS WITH SELLERS BUT RATHER SETS FORTH THE PROCEDURES
TO BE USED IN CONNECTION WITH PERIODIC REQUESTS FOR BUYER TO ENTER
INTO TRANSACTIONS WITH SELLERS. EACH SELLER HEREBY ACKNOWLEDGES THAT
BUYER IS UNDER NO OBLIGATION TO AGREE TO ENTER INTO, OR TO ENTER
INTO, ANY TRANSACTION PURSUANT TO THIS AGREEMENT; PROVIDED, THAT,
BUYER SHALL GIVE THE SELLERS AT LEAST 60 DAYS PRIOR WRITTEN NOTICE
OF ITS DECISION NOT TO ENTER INTO ANY ADDITIONAL TRANSACTIONS
HEREUNDER UNLESS SUCH DECISION IS A RESULT OF FAILURE BY A SELLER TO
SATISFY A CONDITION PRECEDENT. All Purchased Mortgage Loans shall
exceed or meet the Underwriting Guidelines, and shall be serviced by
Servicer. The aggregate Purchase Price of Purchased Mortgage Loans
subject to outstanding Transactions shall not exceed the Maximum
Aggregate Purchase Price.
b. With respect to each Transaction involving Mortgage Loans which
are not Wet-Ink Mortgage Loans, Sellers shall give Buyer and
Custodian at least 1 Business Day's prior notice of any proposed
Purchase Date (the date on which such notice is given, the "Notice
Date"); provided, that if Sellers are delivering 25 or fewer
Mortgage Loans, which are not Wet-Ink Mortgage Loans, on a Purchase
Date, the notice shall be delivered on or before 10:30 a.m. (New
York City time) on the Purchase Date. With respect to Wet-Ink
Mortgage Loans, Sellers shall deliver notice of any proposed
purchase on or before 3:00 p.m. (New York City time) on the Purchase
Date. On the Notice Date, Sellers shall (i) request that Buyer enter
into a Transaction by furnishing to Buyer a Transaction Request,
(ii) deliver to Buyer and Custodian a Mortgage Loan Schedule and
(iii) deliver to Custodian a Request for Certification and each
Mortgage File or Wet-Ink Documents for each Wet-Ink Mortgage Loan in
accordance with Section 10(b)(3) and otherwise comply with the
procedures set forth herein. Following receipt of such request,
Buyer may enter into such requested Transaction or may notify
Sellers of its intention not to enter into such Transaction. In the
event the Mortgage Loan Schedule provided by Sellers contains
erroneous computer data,
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is not formatted properly or the computer fields are otherwise
improperly aligned, Buyer shall provide written or electronic notice
to Sellers describing such error and Sellers may either (a) give
Buyer written or electronic authority to correct the computer data,
reformat the Mortgage Loans or properly align the computer fields or
(b) correct the computer data, reformat or properly align the
computer fields itself and resubmit the Mortgage Loan Schedule as
required herein. In the event that the Sellers give Buyer authority
to correct the computer data, reformat the Mortgage Loan Schedule or
properly align the computer fields, the Sellers shall pay $10 per
change and any other direct expenses incurred by Buyer; provided,
that upon 30 days' notice to the Sellers, Buyer may change such
computer correction fee. The Sellers shall hold Buyer harmless for
such correction, reformatting or realigning, as applicable, except
as otherwise expressly provided herein.
c. With respect to each Exception Mortgage Loan, upon receipt of the
Transaction Request, Buyer shall, consistent with this Agreement,
specify the terms for such proposed Transaction, including the
Purchase Price, the Pricing Rate, the Market Value and the
Repurchase Date in respect of such Transaction. The terms thereof
shall be set forth in the Purchase Confirmation to be delivered to
Sellers on or prior to the Purchase Date.
d. With respect to each Exception Mortgage Loan, the Purchase
Confirmation, together with this Agreement, shall constitute
conclusive evidence of the terms agreed between Buyer and Sellers
with respect to the Transaction to which the Purchase Confirmation
relates, and Sellers' acceptance of the related proceeds shall
constitute Sellers' agreement to the terms of such Purchase
Confirmation. It is the intention of the parties that, with respect
to each Exception Mortgage Loan, each Purchase Confirmation shall
not be separate from this Agreement but shall be made a part of this
Agreement. In the event of any conflict between this Agreement and,
with respect to each Exception Mortgage Loan, a Purchase
Confirmation, the terms of the Purchase Confirmation shall control
with respect to the related Transaction.
e. Upon the satisfaction of the applicable conditions precedent set
forth in Section 10 hereof, all of Sellers' interest in the
Repurchase Assets shall pass to Buyer on the Purchase Date, against
the transfer of the Purchase Price to Sellers. Upon transfer of the
Mortgage Loans to Buyer as set forth in this Section and until
termination of any related Transactions as set forth in Sections 4
or 16 of this Agreement, ownership of each Mortgage Loan, including
each document in the related Mortgage File and Records, is vested in
Buyer; provided that, prior to the recordation by the Custodian as
provided for in the Custodial Agreement record title in the name of
the applicable Seller to each Mortgage shall be retained by the
applicable Seller in trust, for the benefit of Buyer, for the sole
purpose of facilitating the servicing and the supervision of the
servicing of the Mortgage Loans.
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f. With respect to each Wet-Ink Mortgage Loan, by no later than
12:00 noon, (New York City time) on the seventh Business Day
following the applicable Purchase Date, Sellers shall cause the
related Settlement Agent to deliver to the Custodian the remaining
documents in the Mortgage File.
g. Procedures for Amending Schedule of Approved Third Party
Originators. Each Approved Third Party Originator identified on
Schedule 3 from time to time shall be approved by the Buyer to
originate Mortgage Loans to be sold to the Buyer hereunder. Schedule
3 may be revised from time to time following written approval by the
Buyer. The Buyer shall provide at least ten (10) Business Days'
prior notice to the Sellers in the event that it determines that any
Approved Third Party Originator shall be removed from Schedule 3
attached hereto.
4. REPURCHASE
a. Sellers shall repurchase the related Purchased Mortgage Loans
from Buyer on each related Repurchase Date. Such obligation to
repurchase exists without regard to any prior or intervening
liquidation or foreclosure with respect to any Purchased Mortgage
Loan (but liquidation or foreclosure proceeds received by Buyer
shall be applied to reduce the Repurchase Price for such Purchased
Mortgage Loan on each Price Differential Payment Date except as
otherwise provided herein). Sellers are obligated to repurchase and
take physical possession of the Purchased Mortgage Loans from Buyer
or its designee (including the Custodian) at Sellers' expense on the
related Repurchase Date.
b. Provided that no Default shall have occurred and is continuing,
and Buyer has received the related Repurchase Price upon repurchase
of the Purchased Mortgage Loans, Buyer agrees to release its
ownership interest hereunder in the Purchased Mortgage Loans
(including, the Repurchase Assets related thereto) at the request of
Sellers. With respect to payments in full by the related Mortgagor
of a Purchased Mortgage Loan, Sellers agree to (i) provide Buyer
with a copy of a report from the related Servicer indicating that
such Purchased Mortgage Loan has been paid in full, (ii) remit to
Buyer, within two Business Days, the Repurchase Price with respect
to such Purchased Mortgage Loans and (iii) provide Buyer a notice
specifying each Purchased Mortgage Loan that has been prepaid in
full. Buyer agrees to release its ownership interest in Purchased
Mortgage Loans which have been prepaid in full after receipt of
evidence of compliance with clauses (i) through (iii) of the
immediately preceding sentence.
c. In the event that at any time any Purchased Mortgage Loan
violates the applicable sublimit set forth in the definition of
Market Value, Buyer may, in its sole discretion, redesignate such
Mortgage Loan as an Exception Mortgage Loan. If Buyer does not
redesignate such Mortgage Loan as an Exception Mortgage Loan, and if
Sellers fail to notify Buyer within five (5) Business Days following
notice or knowledge of such violation that Sellers do not want to
receive a bid for
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such Mortgage Loan as described below, Buyer or an Affiliate of
Buyer may offer to terminate Sellers' right and obligation to
repurchase such Mortgage Loan by paying Sellers a price to be set by
Buyer in its sole discretion (a "Bid"). Sellers, within five (5)
Business Days of receipt of Buyer's bid (the "Violation Deadline")
may, in its sole discretion, either (i) accept Buyer's bid,
terminating Sellers' right to repurchase such Mortgage Loan under
this Agreement or (ii) immediately repurchase the Mortgage Loan at
the Repurchase Price in accordance with this Section 4. Sellers
shall pay Buyer a bid fee equal to $250 (the "Bid Fee") with respect
to each Mortgage Loan on which Buyer or its Affiliate makes a Bid,
regardless of whether the Bid is accepted and such Bid Fee shall be
due and payable to Buyer on or before the Violation Deadline. Any
amount paid by Buyer or its Affiliate to terminate Sellers' right to
repurchase a Purchased Mortgage Loan if a Bid is accepted pursuant
to this Section shall be applied by Buyer toward the outstanding
Repurchase Price for the applicable Transaction.
5. DIFFERENTIAL.
a. On each Business Day that a Transaction is outstanding, the
Pricing Rate shall be reset and, unless otherwise agreed, the
accrued and unpaid Price Differential shall be settled in cash on
each related Price Differential Payment Date. Two Business Days
prior to the Price Differential Payment Date, Buyer shall give
Sellers written or electronic notice of the amount of the Price
Differential due on such Price Differential Payment Date. On the
Price Differential Payment Date, Sellers shall pay to Buyer the
Price Differential for such Price Differential Payment Date (along
with any other amounts to be paid pursuant to Sections 7 and 34
hereof), by wire transfer in immediately available funds.
b. If Sellers fail to pay all or part of the Price Differential by
3:00 p.m. (New York City time) on the related Price Differential
Payment Date, with respect to any Purchased Mortgage Loan, Sellers
shall be obligated to pay to Buyer (in addition to, and together
with, the amount of such Price Differential) interest on the unpaid
Repurchase Price at a rate per annum equal to the Post Default Rate
until the Price Differential is received in full by Buyer.
c. Seller may remit to Buyer funds in $100,000 increments up to
$15,000,000 the outstanding Purchase Price, to be held as
unsegregated cash margin and collateral for all Obligations under
the Repurchase Agreement (such amount, to the extent not applied to
Obligations under the Repurchase Agreement, the "Buydown Amount").
The Buydown Amount shall be used by Buyer in order to calculate the
Price Differential, which will accrue on the Purchase Price then
outstanding minus the Buydown Amount, applied to Transactions
involving Conforming Mortgage Loans. The Seller shall be entitled to
request a drawdown of the Buydown Amount or remit additional funds
to be added to the Buydown Amount in increments of $100,000 no more
than one time per week. Without limiting the generality of the
foregoing, in the event that a Margin Call or other Default exists,
the Buyer shall be entitled to use any or all of the Buydown
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Amount to cure such circumstance or otherwise exercise remedies
available to the Buyer without prior notice to, or consent from, the
Seller.
6. MARGIN MAINTENANCE
a. If at any time the Market Value of any Purchased Mortgage Loan
subject to a Transaction is less than Buyer's Margin Amount for such
Transaction (a "Margin Deficit"), then Buyer may by notice to any
Seller require Sellers to transfer to Buyer cash in an amount at
least equal to the Margin Deficit (such requirement, a "Margin
Call").
b. Notice delivered pursuant to Section 6(a) may be given by any
written means. Any notice given before 10:00 a.m. (New York City
time) on a Business Day shall be met, and the related Margin Call
satisfied, no later than 5:00 p.m. (New York City time) on such
Business Day; notice given after 10:00 a.m. (New York City time) on
a Business Day shall be met, and the related Margin Call satisfied,
no later than 5:00 p.m. (New York City time) on the following
Business Day (the foregoing time requirements for satisfaction of a
Margin Call are referred to as the "Margin Deadlines"). The failure
of Buyer, on any one or more occasions, to exercise its rights
hereunder, 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. Sellers 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 Sellers.
c. In the event that a Margin Deficit exists with respect to any
Purchased Mortgage Loan, Buyer may retain any funds received by it
to which the Sellers would otherwise be entitled hereunder, which
funds (i) shall be held by Buyer against the related Margin Deficit
and (ii) may be applied by Buyer against any Purchased Mortgage Loan
for which the related Margin Deficit remains otherwise unsatisfied.
Notwithstanding the foregoing, the Buyer retains the right, in its
sole discretion, to make a Margin Call in accordance with the
provisions of this Section 6.
7. INCOME PAYMENTS
a. If Income is paid in respect of any Purchased Mortgage Loan
during the term of a Transaction, such Income shall be the property
of Buyer. Notwithstanding the foregoing, and provided no Event of
Default has occurred and is continuing, Buyer agrees that if a
third-party Servicer is in place for any Purchased Mortgage Loans,
such Servicer shall deposit such Income to the Collection Account.
Sellers shall deposit all Income received in its capacity as
Servicer of any Purchased Mortgage Loans to the Collection Account
in accordance with Section 12(c) hereof.
b. Provided no Event of Default has occurred and is continuing, on
each Price Differential Payment Date, Sellers shall remit to Buyer
an amount equal to the
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Price Differential out of the interest portion of the Income paid in
respect to the Purchased Mortgage Loans for the preceding month in
accordance with Section 5 of this Agreement. Upon termination of any
Transaction, to the extent that there is any excess Income after
repayment of all amounts to be transferred to Buyer by Sellers,
Buyer, in its sole option, may apply the excess income to reduce the
Repurchase Price due upon termination of any other outstanding
Transactions.
c. In the event that an Event of Default has occurred and is
continuing, notwithstanding any provision set forth herein, Sellers
shall remit to Buyer all Income received with respect to each
Purchased Mortgage Loan on the related Price Differential Payment
Date or on such other date or dates as Buyer notifies Sellers in
writing.
d. Notwithstanding any provision to the contrary in this Section 7,
within two (2) Business Days of receipt by Sellers of any prepayment
of principal in full, with respect to a Purchased Mortgage Loan,
Sellers shall remit such amount to Buyer and Buyer shall immediately
apply any such amount received by Buyer to reduce the amount of the
Repurchase Price due upon termination of the related Transaction.
e. Notwithstanding anything to the contrary set forth herein, upon
notice by Buyer to Sellers, Sellers shall remit to Buyer all
collections received by Servicer or Sellers on the Purchased
Mortgage Loans in accordance with Buyer's directions no later than
the day on which aggregate collections of principal and interest
(excluding principal prepayments) on the Purchased Mortgaged Loans
reaches an amount to be indicated by Buyer in its sole discretion.
8. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be sales
and purchases and not loans, in the event any such Transactions are deemed to be
loans, each Seller hereby pledges to Buyer as security for the performance by
Sellers of their Obligations and hereby grants, assigns and pledges to Buyer a
fully perfected first priority security interest in the Purchased Mortgage
Loans, the Records, and all related servicing rights, the Program Agreements (to
the extent such Program Agreements and Sellers' right thereunder relate to the
Purchased Mortgage Loans), any related Take-out Commitments, any Property
relating to the Purchased Mortgage Loans, all insurance policies and insurance
proceeds relating to any Purchased Mortgage Loan or the related Mortgaged
Property, including, but not limited to, any payments or proceeds under any
related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts
and VA Loan Guaranty Agreements (if any), Income, the Collection Account, the
Buydown Amount and any account to which such amount is deposited, Interest Rate
Protection Agreements, accounts (including any interest of Sellers in escrow
accounts) and any other contract rights, instruments, accounts, payments, rights
to payment (including payments of interest or finance charges) general
intangibles and other assets relating to the Purchased Mortgage Loans
(including, without limitation, any other accounts) or any interest in the
Purchased Mortgage Loans, and any proceeds (including the related securitization
proceeds) and distributions with respect to any of the foregoing and any other
property, rights, title or
-26-
interests as are specified on a Transaction Request and/or Trust Receipt and
Certification, in all instances, whether now owned or hereafter acquired, now
existing or hereafter created (collectively, the "Repurchase Assets"). Sellers
agree to execute, deliver and/or file such documents and perform such acts as
may be reasonably necessary to fully perfect Buyer's security interest created
hereby. Furthermore, the Sellers hereby authorize the Buyer to file financing
statements relating to the Repurchase Assets, as the Buyer, at its option, may
deem appropriate. The Sellers shall pay the filing costs for any financing
statement or statements prepared pursuant to this Section.
9. PAYMENT AND TRANSFER
Unless otherwise mutually agreed in writing, all transfers of funds
to be made by Sellers hereunder shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to Buyer at the
following account maintained by Buyer: Account No. 3051-2445, for the account of
CSFB-Buyer/ NY Mortgage Seller--Inbound Account, Citibank, ABA No. 021 100 089
or such other account as Buyer shall specify to Sellers in writing. Each Seller
acknowledges that it has no rights of withdrawal from the foregoing account. All
Purchased Mortgage Loans transferred by one party hereto to the other party
shall be in the case of a purchase by Buyer in suitable form for transfer or
shall be accompanied by duly executed instruments of transfer or assignment in
blank and such other documentation as Buyer may reasonably request. All
Purchased Mortgage Loans shall be evidenced by a Trust Receipt and
Certification. Any Repurchase Price received by Buyer after 2:00 p.m. (New York
City time) shall be deemed received on the next succeeding Business Day.
10. CONDITIONS PRECEDENT
a. Initial Transaction. As conditions precedent to the initial
Transaction, Buyer shall have received on or before the day of such
initial Transaction the following, in form and substance
satisfactory to Buyer and duly executed by Sellers, the Parent
Guarantor and each other party thereto:
(1) Program Agreements. The Program Agreements
(including without limitation the Parent Guaranty, and a Custodial
Agreement in a form acceptable to Buyer) duly executed and delivered
by the parties thereto and being in full force and effect, free of
any modification, breach or waiver.
(2) Security Interest. Evidence that all other actions
necessary or, in the opinion of Buyer, desirable to perfect and
protect Buyer's interest in the Purchased Mortgage Loans and other
Repurchase Assets have been taken, including, without limitation,
duly executed and filed Uniform Commercial Code financing statements
on Form UCC-1.
(3) Organizational Documents. A certificate of the
corporate secretary of each Seller and the Parent Guarantor
substantially in the form of Exhibit I hereto, attaching certified
copies of each Seller's and Parent Guarantor's charter, bylaws and
corporate resolutions approving the Program Agreements and
transactions thereunder (either specifically or by general
resolution) and all
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documents evidencing other necessary corporate action or
governmental approvals as may be required in connection with the
Program Agreements.
(4) Good Standing Certificate. A certified copy of a
good standing certificate of each Seller and the Parent Guarantor,
dated as of no earlier than the date 10 Business Days prior to the
Purchase Date with respect to the initial Transaction hereunder.
(5) Incumbency Certificate. An incumbency certificate of
the corporate secretary of each Seller and the Parent Guarantor,
certifying the names, true signatures and titles of the
representatives duly authorized to request transactions hereunder
and to execute the Program Agreements.
(6) Opinion of Counsel. An opinion of each Seller's and
the Parent Guarantor's counsel, in form and substance substantially
as set forth in Exhibit F attached hereto.
(7) Underwriting Guidelines. A true and correct copy of
the Underwriting Guidelines certified by an officer of each Seller.
(8) Fees. Payment of any fees due to Buyer hereunder.
(9) Insurance. Evidence that Sellers have added Buyer as
a loss payee under the Sellers' Fidelity Insurance.
b. All Transactions. The obligation of Buyer to enter into each
Transaction pursuant to this Agreement is subject to the following
conditions precedent:
(1) Due Diligence Review. Without limiting the
generality of Section 35 hereof, Buyer shall have completed, to its
satisfaction, its due diligence review of the related Mortgage
Loans, Sellers and the Parent Guarantor.
(2) Required Documents.
(a) With respect to each Purchased Mortgage Loan which is not
a Wet-Ink Mortgage Loan, the Mortgage File has been delivered to the
Custodian (i) with respect to any purchase of 25 or fewer Mortgage
Loans on a single Purchase Date, on or prior to 3:00 p.m. (New York
City time) on the Purchase Date, and (ii) with respect to any
purchase of 26 or more Mortgage Loans on a single Purchase Date, at
least 24 hours prior to the Purchase Date;
(b) With respect to each Wet-Ink Mortgage Loan, the Wet-Ink
Documents have been delivered to Buyer or Custodian, as the case may
be, by 3:00 p.m. (New York City time) on the Purchase Date.
(3) Transaction Documents. Buyer or its designee shall
have received on or before the day of such Transaction (unless
otherwise specified in
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this Agreement) the following, in form and substance satisfactory to
Buyer and (if applicable) duly executed:
(a) A Transaction Request delivered pursuant to Section 3(c)
hereof and a Purchase Confirmation.
(b) The Request for Certification and the related Custodial
Mortgage Loan Schedule, and the Trust Receipt.
(c) Such certificates, opinions of counsel or other documents
as Buyer may reasonably request.
(4) No Default. No Default or Event of Default shall
have occurred and be continuing;
(5) Requirements of Law. Buyer shall not have determined
that the introduction of or a change in any Requirement of Law or in
the interpretation or administration of any Requirement of Law
applicable to Buyer has made it unlawful, and no Governmental
Authority shall have asserted that it is unlawful, for Buyer to
enter into Transactions with a Pricing Rate based on LIBOR.
(6) Representations and Warranties. Both immediately
prior to the related Transaction and also after giving effect
thereto and to the intended use thereof, the representations and
warranties made by each Seller in each Program Agreement shall be
true, correct and complete on and as of such Purchase Date in all
material respects 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).
(7) Electronic Tracking Agreement. To the extent either
Seller is selling Mortgage Loans which are registered on the MERS(R)
System, an Electronic Tracking Agreement entered into, duly executed
and delivered by the parties thereto and being in full force and
effect, free of any modification, breach or waiver.
(8) Material Adverse Change. None of the following shall
have occurred and/or be continuing:
(a) Credit Suisse First Boston, New York Branch's corporate
bond rating as calculated by S&P or ▇▇▇▇▇'▇ has been lowered or
downgraded to a rating below investment grade by S&P or ▇▇▇▇▇'▇;
(b) an event or events shall have occurred in the good faith
determination of Buyer resulting in the effective absence of a "repo
market" or comparable "lending market" for financing debt
obligations secured by mortgage loans or securities or an event or
events shall have occurred resulting in Buyer not being able to
finance Purchased Mortgage Loans through the "repo market" or
"lending
-29-
market" with traditional counterparties at rates which would have
been reasonable prior to the occurrence of such event or events; or
(c) an event or events shall have occurred resulting in the
effective absence of a "securities market" for securities backed by
mortgage loans or an event or events shall have occurred resulting
in Buyer not being able to sell securities backed by mortgage loans
at prices which would have been reasonable prior to such event or
events; or
(d) there shall have occurred a material adverse change in the
financial condition of Buyer which affects (or can reasonably be
expected to affect) materially and adversely the ability of Buyer to
fund its obligations under this Agreement.
11. PROGRAM; COSTS
a. Sellers shall reimburse Buyer for any of Buyer's reasonable
out-of-pocket costs, including due diligence review costs and
reasonable attorney's fees, incurred by Buyer in determining the
acceptability to Buyer of any Mortgage Loans. Sellers shall also
pay, or reimburse Buyer if Buyer shall pay, any termination fee,
which may be due any servicer. Sellers shall pay the fees and
expenses of Buyer's counsel in connection with the Program
Agreements. Legal fees for any subsequent amendments to this
Agreement or related documents shall be borne by Sellers. Sellers
shall pay ongoing custodial and bank fees and expenses as set forth
on Exhibit N hereto, and any other ongoing fees and expenses under
any other Program Document.
b. If Buyer determines that, due to the introduction of, any change
in, or the compliance by Buyer with (i) any eurocurrency reserve
requirement or (ii) the interpretation of any law, regulation or any
guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be
an increase in the cost to Buyer in engaging in the present or any
future Transactions, then Sellers agree to pay to Buyer, from time
to time, upon demand by Buyer (with a copy to Custodian) the actual
cost of additional amounts as specified by Buyer to compensate Buyer
for such increased costs.
c. With respect to any Transaction, Buyer may conclusively rely
upon, and shall incur no liability to Sellers 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 Sellers' behalf, whether or not such person is listed
on the certificate delivered pursuant to Section 10(a)(5) hereof. In
each such case, Sellers hereby waive the right to dispute Buyer's
record of the terms of the Purchase Confirmation, request or other
communication.
d. Notwithstanding the assignment of the Program Agreements with
respect to each Purchased Mortgage Loan to Buyer, Sellers agree and
covenant with Buyer
-30-
to enforce diligently Sellers' rights and remedies set forth in the
Program Agreements.
e. Any payments made by Sellers or the Parent Guarantor to Buyer
shall be free and clear of, and without deduction or withholding
for, any taxes; provided, however, that if such payer shall be
required by law to deduct or withhold any taxes from any sums
payable to Buyer, then such payer shall (A) make such deductions or
withholdings and pay such amounts to the relevant authority in
accordance with applicable law, (B) pay to Buyer the sum that would
have been payable had such deduction or withholding not been made,
and (C) at the time Price Differential is paid, pay to Buyer all
additional amounts as specified by Buyer to preserve the after-tax
yield Buyer would have received if such tax had not been imposed,
and otherwise indemnify Buyer for any such taxes imposed.
12. SERVICING
a. Sellers, on Buyer's behalf, shall contract with Servicer to, or
if a Seller is the Servicer, such Seller shall, service the Mortgage
Loans consistent with the degree of skill and care that Sellers
customarily requires with respect to similar Mortgage Loans owned or
managed by it and in accordance with Accepted Servicing Practices.
The Servicer shall (i) comply with all applicable Federal, State and
local laws and regulations, (ii) maintain all state and federal
licenses necessary for it to perform its servicing responsibilities
hereunder and (iii) not impair the rights of Buyer in any Mortgage
Loans or any payment thereunder. Buyer may terminate the servicing
of any Mortgage Loan with the then-existing servicer in accordance
with Section 12(e) hereof.
▇. ▇▇▇▇▇▇▇ shall cause the Servicer to hold or cause to be held all
escrow funds collected by Servicer with respect to any Purchased
Mortgage Loans in trust accounts and shall apply the same for the
purposes for which such funds were collected.
▇. ▇▇▇▇▇▇▇ shall cause the Servicer to deposit all collections
received by Servicer on the Purchased Mortgage Loans in the
Collection Account no later than the 5th Business Day following
receipt; provided, however, that any amounts required to be remitted
to Buyer shall be deposited in the Collection Account on or prior to
the day on which such remittance is to occur.
d. Upon Buyer's request, Sellers shall provide promptly to Buyer (i)
a Servicer Notice addressed to and agreed to by the Servicer of the
related Purchased Mortgage Loans, advising such Servicer of such
matters as Buyer may reasonably request, including, without
limitation, recognition by the Servicer of Buyer's interest in such
Purchased Mortgage Loans and the Servicer's agreement that upon
receipt of notice of an Event of Default from Buyer, it will follow
the instructions of Buyer with respect to the Purchased Mortgage
Loans and any related Income with respect thereto.
-31-
e. Upon the occurrence of an Event of Default hereunder or a
material default under the Servicing Agreement, Buyer shall have the
right to immediately terminate the Servicer's right to service the
Purchased Mortgage Loans without payment of any penalty or
termination fee. Sellers and the Servicer shall cooperate in
transferring the servicing of the Purchased Mortgage Loans to a
successor servicer appointed by Buyer in its sole discretion.
f. If Sellers should discover that, for any reason whatsoever,
Sellers or any entity responsible to Sellers for managing or
servicing any such Purchased Mortgage Loan has failed to perform
fully Sellers' obligations under the Program Agreements or any of
the obligations of such entities with respect to the Purchased
Mortgage Loans, Sellers shall promptly notify Buyer.
13. REPRESENTATIONS AND WARRANTIES
a. Each Seller and the Parent Guarantor represents and warrants to
Buyer as of the date hereof and as of each Purchase Date for any
Transaction that:
(1) Sellers' and Parent Guarantor Existence. Each Seller
has been duly organized and is validly existing as a limited
liability company in good standing under the laws of the State of
New York. The Parent Guarantor has been duly organized and is
validly existing as a corporation in good standing under the laws of
the State of Maryland.
(2) Licenses. Each Seller and the Parent Guarantor is
duly licensed or is otherwise qualified in each jurisdiction in
which it transacts business for the business which it conducts and
is not in default of any applicable federal, state or local laws,
rules and regulations unless, in either instance, the failure to
take such action is not reasonably likely (either individually or in
the aggregate) to cause a Material Adverse Effect and is not in
default of such state's applicable laws, rules and regulations. Each
Seller and the Parent Guarantor has the requisite power and
authority and legal right to originate and purchase Mortgage Loans
(as applicable) and to own, sell and ▇▇▇▇▇ ▇ ▇▇▇▇ on all of its
right, title and interest in and to the Mortgage Loans, and to
execute and deliver, engage in the transactions contemplated by, and
perform and observe the terms and conditions of, this Agreement,
each Program Agreement and any Transaction Request or, if
applicable, Purchase Confirmation. Each Seller is an FHA Approved
Mortgagee and VA Approved Lender.
(3) Power. Each Seller and the Parent Guarantor 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.
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(4) Due Authorization. Each Seller and the Parent
Guarantor has all necessary corporate or other power, authority and
legal right to execute, deliver and perform its obligations under
each of the Program Agreements, as applicable. This Agreement, any
Transaction Request, Purchase Confirmation and the Program
Agreements have been (or, in the case of Program Agreements and any
Transaction Request, Purchase Confirmation not yet executed, will
be) duly authorized, executed and delivered by each Seller and the
Parent Guarantor, all requisite or other corporate action having
been taken, and each is valid, binding and enforceable against each
Seller and the Parent Guarantor in accordance with its terms except
as such enforcement may be affected by bankruptcy, by other
insolvency laws, or by general principles of equity.
(5) Financial Statements. The Sellers and the Parent
Guarantor have heretofore furnished to Buyer a copy of (a) their
Consolidated balance sheet and the Consolidated balance sheets of
their consolidated Subsidiaries for the fiscal year of the Sellers
ended December 31, 2003 and the related Consolidated statements of
income and retained earnings and of cash flows for the Sellers, the
Parent Guarantor and their consolidated Subsidiaries for such fiscal
year, setting forth in each case in comparative form the figures for
the previous year, with the opinion thereon of ▇▇▇▇▇▇, ▇▇▇▇▇ &
Company LLP and (b) their Consolidated balance sheet and the
Consolidated balance sheets of their consolidated Subsidiaries for
the quarterly fiscal period of the Sellers and the Parent Guarantor
ended March 31, 2004, June 30, 2004 and September 30, 2004 and the
related Consolidated statements of income and retained earnings and
of cash flows for the Sellers, the Parent Guarantor and their
consolidated Subsidiaries for such quarterly fiscal period, setting
forth in each case in comparative form the figures for the previous
year. All such financial statements are complete and correct and
fairly present, in all material respects, the Consolidated financial
condition of the Sellers, the Parent Guarantor and their
Subsidiaries and the Consolidated results of their operations as at
such dates and for such fiscal periods, all in accordance with GAAP
applied on a consistent basis. Since December 31, 2003, there has
been no material adverse change in the consolidated business,
operations or financial condition of the Sellers, the Parent
Guarantor and their consolidated Subsidiaries taken as a whole from
that set forth in said financial statements nor are Sellers or the
Parent Guarantor aware of any state of facts which (without notice
or the lapse of time) would or could result in any such material
adverse change. Neither the Sellers nor the Parent Guarantor have,
on the date of the statements delivered pursuant to this Section
(the "Statement Date") any liabilities, direct or indirect, fixed or
contingent, matured or unmatured, known or unknown, or liabilities
for taxes, long-term leases or unusual forward or long-term
commitments not disclosed by, or reserved against in, said balance
sheet and related statements, and at the present time there are no
material unrealized or anticipated losses from any loans, advances
or other commitments of Sellers or the Parent Guarantor except as
heretofore disclosed to Buyer in writing.
(6) Event of Default. There exists no Event of Default
under Section 15(b) hereof, which default gives rise to a right to
accelerate indebtedness
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as referenced in Section 15(b) hereof, under any mortgage, borrowing
agreement or other instrument or agreement pertaining to
indebtedness for borrowed money or to the repurchase of mortgage
loans or securities.
(7) Solvency. Each Seller and the Parent Guarantor is
solvent and will not be rendered insolvent by any Transaction and,
after giving effect to such Transaction, will not be left with an
unreasonably small amount of capital with which to engage in its
business. Neither Sellers nor the Parent Guarantor intend to incur,
nor does it believe that it has incurred, debts beyond its ability
to pay such debts as they mature and is not contemplating the
commencement of insolvency, bankruptcy, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of such entity
or any of its assets. The amount of consideration being received by
each Seller upon the sale of the Purchased Mortgage Loans to Buyer
constitutes reasonably equivalent value and fair consideration for
such Purchased Mortgage Loans. Sellers are not transferring any
Purchased Mortgage Loans with any intent to hinder, delay or defraud
any of its creditors.
(8) No Conflicts. The execution, delivery and
performance by each Seller and the Parent Guarantor of this
Agreement, any Transaction Request or Purchase Confirmation
hereunder and the Program Agreements do not conflict with any term
or provision of the certificate of incorporation or by-laws of
Sellers or the Parent Guarantor or any law, rule, regulation, order,
judgment, writ, injunction or decree applicable to Sellers or the
Parent Guarantor of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Sellers or the
Parent Guarantor, which conflict would have a Material Adverse
Effect and will not result in any violation of any such mortgage,
instrument, agreement or obligation to which either Seller or the
Parent Guarantor is a party.
(9) True and Complete Disclosure. All information,
reports, exhibits, schedules, financial statements or certificates
of each Seller, the Parent Guarantor, or any Affiliate thereof or
any of their officers furnished or to be furnished to Buyer in
connection with the initial or any ongoing due diligence of Sellers,
the Parent Guarantor, or any Affiliate or officer thereof,
negotiation, preparation, or delivery of the Program Agreements are
true and complete and do not omit to disclose any material facts
necessary to make the statements herein or therein, in light of the
circumstances in which they are made, not misleading. All financial
statements have been prepared in accordance with GAAP.
(10) Approvals. No consent, approval, authorization or
order of, registration or filing with, or notice to any governmental
authority or court is required under applicable law in connection
with the execution, delivery and performance by Sellers or the
Parent Guarantor of this Agreement, any Transaction Request,
Purchase Confirmation and the Program Agreements.
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(11) Litigation. There is no action, proceeding or
investigation pending with respect to which either Seller or the
Parent Guarantor has received service of process or, to the best of
either Seller's or the Parent Guarantor's knowledge threatened
against it before any court, administrative agency or other tribunal
(A) asserting the invalidity of this Agreement, any Transaction,
Transaction Request, Purchase Confirmation or any Program Agreement,
(B) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, any Transaction Request, Purchase
Confirmation or any Program Agreement, (C) makes a claim
individually in an amount greater than $1 million or in an aggregate
amount greater than $3 million, (D) which requires filing with the
Securities and Exchange Commission in accordance with the 1934 Act
or any rules thereunder or (E) which might materially and adversely
affect the validity of the Mortgage Loans or the performance by it
of its obligations under, or the validity or enforceability of, this
Agreement, any Transaction Request, Purchase Confirmation or any
Program Agreement.
(12) Material Adverse Change. There has been no material
adverse change in the business, operations, financial condition,
properties or prospects of either Seller, the Parent Guarantor or
their Affiliates since the date set forth in the most recent
financial statements supplied to Buyer.
(13) Ownership. Upon payment of the Purchase Price and
the filing of the financing statement and delivery of the Mortgage
Files to the Custodian and the Custodian's receipt of the related
Request for Certification, Buyer shall become the sole owner of the
Purchased Mortgage Loans and related Repurchase Assets, free and
clear of all liens and encumbrances.
(14) Underwriting Guidelines. The Underwriting
Guidelines provided to Buyer are the true and correct Underwriting
Guidelines of Sellers.
(15) Taxes. Each Seller and their Subsidiaries, and the
Parent Guarantor 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 as 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 Sellers and their Subsidiaries, and the Parent
Guarantor in respect of taxes and other governmental charges are, in
the opinion of Sellers or the Parent Guarantor, as applicable,
adequate.
(16) Investment Company. Neither Seller, the Parent
Guarantor nor any of their 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.
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(17) Chief Executive Office; Jurisdiction of
Organization. On the Effective Date, Sellers' chief executive
offices, are, and have been, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. On the Effective Date, Sellers'
jurisdiction of organization is New York. Sellers shall provide
Buyer with thirty days advance notice of any change in Sellers'
principal office or place of business or jurisdiction. Neither
Seller has a trade name. During the preceding five years, Sellers
have not been known by or done business under any other names,
corporate or fictitious, and have not filed or had filed against
them any bankruptcy receivership or similar petitions nor have they
made any assignments for the benefit of creditors.
(18) Location of Books and Records. The location where
Sellers keep their books and records, including all computer tapes
and records relating to the Purchased Mortgage Loans and the related
Repurchase Assets is their chief executive office.
(19) Adjusted Tangible Net Worth. On the Effective Date,
the Parent Guarantor's Adjusted Tangible Net Worth is not less than
$115 Million.
(20) ERISA. Each Plan to which a Seller or its
Subsidiaries make direct contributions, and, to the knowledge of a
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.
(21) Adverse Selection. Sellers have not selected the
Purchased Mortgage Loans in a manner so as to adversely affect
Buyer's interests.
(22) Agreements. Neither Seller nor any Subsidiary of
Seller is a party to any agreement, instrument, or indenture or
subject to any restriction materially and adversely affecting its
business, operations, assets or financial condition, except as
disclosed in the financial statements described in Section 13(a)(5)
hereof. Neither Seller nor any Subsidiary of Seller is in default in
the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement,
instrument, or indenture which default could have a material adverse
effect on the business, operations, properties, or financial
condition of a Seller as a whole. No holder of any indebtedness of
any Seller or of any of its Subsidiaries has given notice of any
asserted default thereunder.
(23) Other Indebtedness. All Indebtedness (other than
Indebtedness evidenced by this Agreement) of each Seller existing on
the date hereof is listed on Exhibit K hereto (the "Existing
Indebtedness").
(24) Agency Approvals. With respect to each Agency
Security and to the extent necessary, each Seller and the Parent
Guarantor is an FHA Approved Mortgagee, a VA Approved Lender and a
GNMA Approved Lender.
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Each Seller and the Parent Guarantor are also approved by ▇▇▇▇▇▇ ▇▇▇
as an approved lender and ▇▇▇▇▇▇▇ Mac as an approved
seller/servicer, and, to the extent necessary, approved by the
Secretary of Housing and Urban Development pursuant to Sections 203
and 211 of the National Housing Act. In each such case, each Seller
and the Parent Guarantor are in good standing, with no event having
occurred or any Seller or the Parent Guarantor having any reason
whatsoever to believe or suspect will occur prior to the issuance of
the Agency Security or the consummation of the Take-out Commitment,
as the case may be, including, without limitation, a change in
insurance coverage which would either make either Seller or the
Parent Guarantor unable to comply with the eligibility requirements
for maintaining all such applicable approvals or require
notification to the relevant Agency or to the Department of Housing
and Urban Development, FHA or VA. Should a Seller or the Parent
Guarantor for any reason cease to possess all such applicable
approvals, or should notification to the relevant Agency or to the
Department of Housing and Urban Development, FHA or VA be required,
such Seller shall so notify Buyer immediately in writing. Each
Seller and the Parent Guarantor have adequate financial standing,
servicing facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same types as may
from time to time constitute Mortgage Loans and in accordance with
Accepted Servicing Practices.
(25) No Reliance. Each Seller and the Parent Guarantor
have made their own independent decisions to enter into the Program
Agreements and each Transaction and as to whether such Transaction
is appropriate and proper for it based upon its own judgment and
upon advice from such advisors (including without limitation, legal
counsel and accountants) as it has deemed necessary. Neither Sellers
nor the Parent Guarantor are relying upon any advice from Buyer as
to any aspect of the Transactions, including without limitation, the
legal, accounting or tax treatment of such Transactions.
(26) Plan Assets. Neither Seller is an employee benefit
plan as defined in Section 3 of Title I of ERISA, or a plan
described in Section 4975(e)(1) of the Code, and the Purchased
Mortgage Loans are not "plan assets" within the meaning of 29 CFR
Section 2510.3-101 in the Seller's hands.
(27) No Prohibited Persons. Neither Seller nor any of
their Affiliates, officers, directors, partners or members, is an
entity or person (or to a Seller's knowledge, owned or controlled by
an entity or person): (i) that is listed in the Annex to, or is
otherwise subject to the provisions of Executive Order 13224 issued
on September 24, 2001 ("EO13224"); (ii) whose name appears on the
United States Treasury Department's Office of Foreign Assets Control
("OFAC") most current list of "Specifically Designated National and
Blocked Persons" (which list may be published from time to time in
various mediums including, but not limited to, the OFAC website,
http:▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇/▇▇▇▇▇▇.▇▇▇); (iii) who commits, threatens to
commit or supports "terrorism", as that term is defined in EO13224;
or (iv) who is otherwise affiliated with any entity or person listed
above (any and all parties or persons
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described in clauses (i) through (iv) above are herein referred to
as a "Prohibited Person").
(28) Real Estate Investment Trust. NYMF has not engaged
in any material "prohibited transactions" as defined in Section
857(b)(6)(B)(iii) and (C) of the Code. NYMF for its current "tax
year" (as defined in the Code) is entitled to a dividends paid
deduction under the requirements of Section 857 of the Code with
respect to any dividends paid by it with respect to each such year
for which it claims a deduction in its Form 1120-REIT filed with the
United States Internal Revenue Service for such year.
b. With respect to every Purchased Mortgage Loan, each Seller and
the Parent Guarantor jointly and severally represent and warrant to
Buyer as of the applicable Purchase Date for any Transaction and
each date thereafter that each representation and warranty set forth
on Schedule 1 is true and correct.
c. The representations and warranties set forth in this Agreement
shall survive transfer of the Purchased Mortgage Loans to Buyer and
shall continue for so long as the Purchased Mortgage Loans are
subject to this Agreement. Upon discovery by any Seller, Servicer or
Buyer of any breach of any of the representations or warranties set
forth in this Agreement, the party discovering such breach shall
promptly give notice of such discovery to the others. Buyer has the
right to require, in its unreviewable discretion, Sellers to
repurchase within three (3) Business Days after receipt of notice
from Buyer any Purchased Mortgage Loan (i) for which a breach of one
or more of the representations and warranties referenced in Section
13(b) exists and which breach has a material adverse effect on the
value of such Mortgage Loan or the interests of Buyer or (ii) which
is determined by Buyer, in its good faith discretion, to be
unacceptable for inclusion in a securitization.
14. COVENANTS
Each Seller and the Parent Guarantor covenant with Buyer that,
during the term of this facility:
a. Adjusted Tangible Net Worth. The Parent Guarantor shall maintain
an Adjusted Tangible Net Worth of at least $115 million.
b. Indebtedness to Adjusted Tangible Net Worth Ratio. The Parent
Guarantor's consolidated ratio of Indebtedness to Adjusted Tangible
Net Worth shall not exceed 15:1.
c. Litigation. Each Seller and the Parent Guarantor will promptly,
and in any event within ten (10) days after service of process on
any of the following, give to Buyer notice of all litigation,
actions, suits, arbitrations, investigations (including, without
limitation, any of the foregoing which are threatened or pending) or
other legal or arbitrable proceedings affecting such Seller, the
Parent Guarantor or any
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of their Subsidiaries or affecting any of the Property of any of
them before any Governmental Authority that (i) questions or
challenges the validity or enforceability of any of the Program
Agreements or any action to be taken in connection with the
transactions contemplated hereby, (ii) makes a claim individually in
an amount greater than $1 million or in an aggregate amount greater
than $3 million, or (iii) which, individually or in the aggregate,
if adversely determined, could be reasonably likely to have a
Material Adverse Effect. Each Seller and the Parent Guarantor will
promptly provide notice of any judgment, which with the passage of
time, could cause an Event of Default hereunder.
d. Prohibition of Fundamental Changes. Neither Seller nor the Parent
Guarantor shall enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation, winding up or dissolution) or
sell all or substantially all of its assets; provided, that either
Seller or the Parent Guarantor may merge or consolidate with (a) any
wholly owned subsidiary of Seller or the Parent Guarantor,
respectively, or (b) any other Person if such Seller or the Parent
Guarantor is the surviving corporation; and provided further, that
if after giving effect thereto, no Default would exist hereunder.
e. Maintenance of Profitability. Parent Guarantor shall not permit
on a consolidated basis, for any Test Period, Net Income for such
Test Period, before income taxes for such Test Period and
distributions made during such Test Period, to be less than $1.00.
f. Servicer; Asset Tape. Upon the occurrence of any of the following
(a) the occurrence and continuation of an Event of Default, (b) upon
any Purchased Mortgage Loan becoming an Aged Loan, (c) the fifth
Business Day of each month, or (d) upon the request of Buyer,
Sellers shall cause Servicer to provide to Buyer, electronically, in
a format mutually acceptable to Buyer and Sellers, an Asset Tape by
no later than the Reporting Date. Sellers shall not cause the
Mortgage Loans to be serviced by any servicer other than a servicer
expressly approved in writing by Buyer, which approval shall be
deemed granted by Buyer with respect to Sellers with the execution
of this Agreement.
g. Insurance. Sellers, the Parent Guarantor or their Affiliates,
will continue to maintain, for Seller, the Parent Guarantor and
their Subsidiaries, insurance coverage with respect to employee
dishonesty, forgery or alteration, theft, disappearance and
destruction, robbery and safe burglary, property (other than money
and securities) and computer fraud in an aggregate amount acceptable
to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac.
h. No Adverse Claims. Sellers warrant and will defend, and shall
cause any Servicer to defend, the right, title and interest of Buyer
in and to all Purchased Mortgage Loans and the related Repurchase
Assets against all adverse claims and demands.
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i. Assignment. Except as permitted herein, neither Seller nor any
Servicer shall sell, assign, transfer or otherwise dispose of, or
grant any option with respect to, or pledge, hypothecate or grant a
security interest in or lien on or otherwise encumber (except
pursuant to the Program Agreements), any of the Purchased Mortgage
Loans or any interest therein, provided that this Section shall not
prevent any transfer of Purchased Mortgage Loans in accordance with
the Program Agreements.
j. Security Interest. Sellers shall do all things necessary to
preserve the Purchased Mortgage Loans and the related Repurchase
Assets so that they remain subject to a first priority perfected
security interest hereunder. Without limiting the foregoing, Sellers
will comply with all rules, regulations and other laws of any
Governmental Authority and cause the Purchased Mortgage Loans or the
related Repurchase Assets to comply with all applicable rules,
regulations and other laws. Sellers will not allow any default for
which Sellers are responsible to occur under any Purchased Mortgage
Loans or the related Repurchase Assets or any Program Agreement and
Sellers shall fully perform or cause to be performed when due all of
its obligations under any Purchased Mortgage Loans or the related
Repurchase Assets and any Program Agreement.
k. Records.
(1) Sellers shall collect and maintain or cause to be
collected and maintained all Records relating to the Purchased
Mortgage Loans in accordance with industry custom and practice for
assets similar to the Purchased Mortgage Loans, including those
maintained pursuant to the preceding subparagraph, and all such
Records shall be in Custodian's possession unless Buyer otherwise
approves. Sellers will not allow any such papers, records or files
that are an original or an only copy to leave Custodian's
possession, except for individual items removed in connection with
servicing a specific Mortgage Loan, in which event Sellers will
obtain or cause to be obtained a receipt from a financially
responsible person for any such paper, record or file. Sellers or
the Servicer of the Purchased Mortgage Loans will maintain all such
Records not in the possession of Custodian in good and complete
condition in accordance with industry practices for assets similar
to the Purchased Mortgage Loans and preserve them against loss.
(2) For so long as Buyer has an interest in or lien on
any Purchased Mortgage Loan, Sellers will hold or cause to be held
all related Records in trust for Buyer. Sellers shall notify, or
cause to be notified, every other party holding any such Records of
the interests and liens in favor of Buyer granted hereby.
(3) Upon reasonable advance notice from Custodian or
Buyer, Sellers shall (x) make any and all such Records available to
Custodian or Buyer to examine any such Records, either by its own
officers or employees, or by agents or contractors, or both, and
make copies of all or any portion thereof, and (y) permit Buyer or
its authorized agents to discuss the affairs, finances and accounts
of Sellers with their chief operating officer and chief financial
officer
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and to discuss the affairs, finances and accounts of Sellers with
their independent certified public accountants.
l. Books. Sellers shall keep or cause to be kept in reasonable
detail books and records of account of its assets and business and
shall clearly reflect therein the transfer of Purchased Mortgage
Loans to Buyer.
m. Approvals. Each Seller shall maintain all licenses, permits or
other approvals necessary for such Seller to conduct its business
and to perform its obligations under the Program Agreements, and
such Seller shall conduct its business strictly in accordance with
applicable law.
n. Material Change in Business. Neither Sellers nor the Parent
Guarantor shall make any material change in the nature of their
business as carried on at the date hereof. There shall be no
material change in the senior management of either Seller or the
Parent Guarantor.
o. Underwriting Guidelines. Without the prior written consent of
Buyer, Sellers shall not amend or otherwise modify the Underwriting
Guidelines. Without limiting the foregoing, in the event that a
Seller makes any amendment or modification to the Underwriting
Guidelines, such Seller shall promptly deliver to Buyer a complete
copy of the amended or modified Underwriting Guidelines.
p. Distributions. Neither Seller nor the Parent Guarantor shall pay
any dividends greater than Net Income in any given calendar year. If
an Event of Default has occurred and is continuing, neither Seller
nor the Parent Guarantor shall pay any dividends with respect to any
capital stock or other equity interests in such entity, whether now
or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property
or in obligations of Sellers or the Parent Guarantor.
q. Applicable Law. Each Seller and the Parent Guarantor shall comply
with the requirements of all applicable laws, rules, regulations and
orders of any Governmental Authority.
r. Existence. Each Seller and the Parent Guarantor shall preserve
and maintain its legal existence and all of its material rights,
privileges, licenses and franchises.
s. Chief Executive Office; Jurisdiction of Organization. Neither
Seller shall move its chief executive office from the address
referred to in Section 13(a)(17) or change its jurisdiction of
organization from the jurisdiction referred to in Section 13(a)(17)
unless it shall have provided Buyer 30 days' prior written notice of
such change.
t. Taxes. Sellers and the Parent Guarantor shall timely file all tax
returns that are required to be filed by them and shall timely pay
and discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its
property prior to the date on which penalties attach thereto,
-41-
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained.
u. Transactions with Affiliates. Neither Seller nor the Parent
Guarantor will enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate unless such transaction
is (a) otherwise permitted under the Program Agreements, (b) in the
ordinary course of such Seller's or the Parent Guarantor's business
and (c) upon fair and reasonable terms no less favorable to such
Seller or the Parent Guarantor than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate, or
make a payment that is not otherwise permitted by this Section to
any Affiliate.
v. Guarantees. Neither Seller nor the Parent Guarantor shall create,
incur, assume or suffer to exist any Guarantees, except (i) to the
extent reflected in such Seller's or Parent Guarantor's financial
statements or notes thereto and (ii) to the extent the aggregate
Guarantees of Sellers or the Parent Guarantor do not exceed
$500,000.
w. Indebtedness. Sellers shall not incur any additional material
Indebtedness (other than (i) the Existing Indebtedness in amounts
not to exceed the amounts specified on Exhibit K hereto and (ii)
usual and customary accounts payable for a mortgage company) without
the prior written consent of Buyer.
x. Hedging. Sellers have entered into Interest Rate Protection
Agreements with respect to the Alt-A Mortgage Loans, Jumbo Mortgage
Loans and Conforming Mortgage Loans, having terms with respect to
protection against fluctuations in interest rates acceptable to
Buyer in its sole discretion.
y. True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of either Seller,
the Parent Guarantor, any Affiliate thereof or any of their officers
furnished to Buyer hereunder and during Buyer's diligence of Sellers
and the Parent Guarantor are and will be true and complete and do
not omit to disclose any material facts necessary to make the
statements herein or therein, in light of the circumstances in which
they are made, not misleading. All required financial statements,
information and reports delivered by either Seller to Buyer pursuant
to this Agreement shall be prepared in accordance with U.S. GAAP,
or, if applicable, to SEC filings, the appropriate SEC accounting
regulations.
z. Agency Approvals; Servicing. Sellers shall maintain their status
with ▇▇▇▇▇▇ ▇▇▇ as an approved lender and ▇▇▇▇▇▇▇ Mac as an approved
seller/servicer, in each case in good standing. Sellers shall
service all Purchased Mortgage Loans which are Committed Mortgage
Loans in accordance with the applicable agency guide. Should a
Seller, for any reason, cease to possess all such applicable Agency
Approvals, or should notification to the relevant Agency or to the
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Department of Housing and Urban Development, FHA or VA be required,
such Seller shall so notify Buyer immediately in writing.
Notwithstanding the preceding sentence, Sellers shall take all
necessary action to maintain all of their applicable Agency
Approvals at all times during the term of this Agreement and each
outstanding Transaction. Sellers have adequate financial standing,
servicing facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same types as may
from time to time constitute Mortgage Loans and in accordance with
Accepted Servicing Practices.
aa. Take-out Payments. With respect to each Committed Mortgage Loan,
Sellers shall arrange that all payments under the related Take-out
Commitment shall be paid directly to Buyer at the account set forth
in Section 9 hereof, or to an account approved by Buyer in writing
prior to such payment. With respect to any Agency Take-out
Commitment, if applicable, (1) with respect to the wire transfer
instructions as set forth in ▇▇▇▇▇▇▇ Mac Form 987 (Wire Transfer
Authorization for a Cash Warehouse Delivery) such wire transfer
instructions are identical to Buyer's wire instructions or Buyer has
approved such wire transfer instructions in writing in its sole
discretion, or (2) the Payee Number set forth on ▇▇▇▇▇▇ Mae Form
1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan
Schedule) or ▇▇▇▇▇▇ ▇▇▇ Form 1069 (Adjustable-Rate Mortgage Loan
Schedule), as applicable, is identical to the Payee Number that has
been identified by Buyer in writing as Buyer's Payee Number or Buyer
has previously approved the related Payee Number in writing in its
sole discretion; with respect to any Take-out Commitment with an
Agency, the applicable agency documents list Buyer as sole
subscriber, unless otherwise agreed to in writing by Buyer, in
Buyer's sole discretion.
bb. No Pledge. Sellers shall not pledge, transfer or convey any
security interest in the Collection Account to any Person without
the express written consent of Buyer.
cc. Plan Assets. Neither Seller shall be an employee benefit plan as
defined in Section 3 of Title I of ERISA, or a plan described in
Section 4975(e)(1) of the Code and neither Seller shall use "plan
assets" within the meaning of 29 CFR Section 2510.3-101 to engage in
this Repurchase Agreement or any Transaction hereunder.
dd. HELOC Provisions. With respect to each HELOC, if a Mortgagor
requests an increase in the related Credit Limit, the related
Seller, shall, in its sole discretion, either accept or reject the
Mortgagor's request in accordance with such Seller's Underwriting
Guidelines and notify the Buyer in writing of such Seller's
decision. If the request for a Credit Limit increase is accepted by
a Seller, the increase will be effected by such Seller through
modification of the Mortgage Loan with the Mortgagor. Sellers shall
deliver to the Buyer an updated Mortgage Loan Schedule reflecting
the modification to the Mortgage Loan and shall deliver any modified
Mortgage Loan Documents to the Custodian. Notwithstanding anything
to the contrary herein, in no event shall Buyer have any obligation
to fund any
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Draws with respect to any HELOC, which obligations shall be retained
by the Sellers.
15. EVENTS OF DEFAULT
Each of the following shall constitute an "Event of Default"
hereunder:
a. Payment Failure. Failure of a Seller to (i) make any payment of
Price Differential or Repurchase Price or any other sum which has
become due, on a Price Differential Payment Date or a Repurchase
Date or otherwise, whether by acceleration or otherwise, under the
terms of this Agreement, any other warehouse and security agreement
or any other document evidencing or securing Indebtedness of Sellers
to Buyer or to any Affiliate of Buyer, or (ii) cure any Margin
Deficit when due pursuant to Section 6 hereof.
b. Cross Default. (i) A Seller, any of Sellers' Affiliates or the
Parent Guarantor shall be in default under (i) any Indebtedness of a
Seller, Seller's Affiliate or the Parent Guarantor which default (1)
involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or
beneficiary with respect to such Indebtedness, or (ii) any other
contract to which a Seller, Seller's Affiliate or the Parent
Guarantor is a party which default (1) involves the failure to pay a
matured obligation, or (2) permits the acceleration of the maturity
of obligations by any other party to or beneficiary of such
contract.
c. Assignment. Assignment or attempted assignment by either Seller
or the Parent Guarantor of this Agreement or any rights hereunder
without first obtaining the specific written consent of Buyer, or
the granting by either Seller of any security interest, lien or
other encumbrances on any Purchased Mortgage Loans to any person
other than Buyer.
d. Insolvency. An Act of Insolvency shall have occurred with respect
to either Seller, the Parent Guarantor or any Affiliate.
e. Material Adverse Change. Any material adverse change in the
Property, business, financial condition or operations of either
Seller, the Parent Guarantor or any of their Affiliates shall occur,
in each case as determined by Buyer in its sole good faith
discretion, or any other condition shall exist which, in Buyer's
sole good faith discretion, constitutes a material impairment of
either Seller's ability to perform its obligations under this
Agreement or any other Program Agreement.
f. Breach of Financial Representation or Covenant or Obligation. A
breach by either Seller or the Parent Guarantor of any of the
representations, warranties or covenants or obligations set forth in
Sections 13(a)(1), 13(a)(7), 13(a)(12), 13(a)(19), 13(a)(24), ▇▇▇,
▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇▇, 14cc or 14dd of this Agreement.
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g. Breach of Non-Financial Representation or Covenant. A breach by
either Seller or the Parent Guarantor of any other material
representation, warranty or covenant set forth in this Agreement
(and not otherwise specified in Section 15(f) above), if such breach
is not cured within five (5) Business Days (other than the
representations and warranties set forth in Schedule 1, which shall
be considered solely for the purpose of determining the Market
Value, the existence of a Margin Deficit and the obligation to
repurchase such Mortgage Loan) unless (i) such party shall have made
any such representations and warranties with knowledge that they
were materially false or misleading at the time made, (ii) any such
representations and warranties have been determined by Buyer in its
sole discretion to be materially false or misleading on a regular
basis, or (iii) Buyer, in its sole discretion, determines that such
breach of a material representation, warranty or covenant materially
and adversely affects (A) the condition (financial or otherwise) of
such party, its Subsidiaries or Affiliates; or (B) Buyer's
determination to enter into this Agreement or Transactions with such
party, then such breach shall constitute an immediate Event of
Default and Sellers shall have no cure right hereunder).
h. Guarantor Breach. A breach by the Parent Guarantor of any
material representation, warranty or covenant set forth in the
Parent Guaranty or any other Program Agreement, any "event of
default" by the Parent Guarantor under the Parent Guaranty, any
repudiation of the Parent Guaranty by the Parent Guarantor, or if
the Parent Guaranty is not enforceable against the Parent Guarantor.
i. Change of Control. The occurrence of a Change in Control.
j. Failure to Transfer. Either Seller fails to transfer the
Purchased Mortgage Loans to Buyer on the applicable Purchase Date
(provided Buyer has tendered the related Purchase Price).
k. Judgment. A final judgment or judgments for the payment of money
in excess of the lesser of (a) $3 million or (b) 50% of the Sellers'
Adjusted Tangible Net Worth in the aggregate shall be rendered
against a Seller or any of their Affiliates by one or more courts,
administrative tribunals or other bodies having jurisdiction and the
same shall not be satisfied, discharged (or provision shall not be
made for such discharge) or bonded, or a stay of execution thereof
shall not be procured, within 30 days from the date of entry
thereof.
l. Government Action. Any Governmental Authority or any person,
agency or entity acting or purporting to act under governmental
authority shall have taken any action to condemn, seize or
appropriate, or to assume custody or control of, all or any
substantial part of the Property of either Seller, the Parent
Guarantor or any Affiliate thereof, or shall have taken any action
to displace the management of either Seller, the Parent Guarantor or
any Affiliate thereof or to curtail its authority in the conduct of
the business of either Seller, the Parent Guarantor or any Affiliate
thereof, or takes any action in the nature of enforcement to remove,
limit or restrict the approval of either Seller, the Parent
Guarantor or Affiliate as
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an issuer, buyer or a seller/servicer of Mortgage Loans or
securities backed thereby, and such action provided for in this
subparagraph (m) shall not have been discontinued or stayed within
30 days.
m. Inability to Perform. An officer of a Seller the Parent Guarantor
shall admit its inability to, or its intention not to, perform any
of such Seller's Obligations or the Parent Guarantor's obligations
hereunder or under the Parent Guaranty.
n. Security Interest. This Agreement shall for any reason cease to
create a valid, first priority security interest in any material
portion of the Purchased Mortgage Loans or other Repurchase Assets
purported to be covered hereby.
o. Financial Statements. A Seller's or Parent Guarantor's audited
annual financial statements or the notes thereto or other opinions
or conclusions stated therein shall be qualified or limited by
reference to the status of such Seller or the Parent Guarantor as a
"going concern" or a reference of similar import.
p. REIT Status. The failure of NYMF to at any time continue to be
(i) qualified as a real estate investment trust as defined in
Section 856 of the Code and (ii) entitled to a dividend paid
deduction under Section 857 of the Code with respect to dividends
paid by it with respect to each taxable year for which it claims a
deduction on its Form 1120-REIT filed with the United States
Internal Revenue Service for such year, or the entering into by REIT
of any material "prohibited transactions" as defined in Sections
857(b) and 856(c) of the Code.
q. REIT Asset and Income Tests. The failure of NYMF to satisfy any
of the following asset or income tests and Buyer has delivered
notice of an Event of Default to NYMF with respect thereto:
(i) At the close of each taxable year, at least 75
percent of NYMF's gross income consists of (i) "rents from real
property" within the meaning of Section 856(c)(3)(A) of the Code,
(ii) interest on obligations secured by mortgages on real property
or on interests in real property, within the meaning of Section
856(c)(3)(B) of the Code, (iii) gain from the sale or other
disposition of real property (including interests in real property
and interests in mortgages on real property) which is not property
described in Section 1221(a)(1) of the Code, within the meaning of
Section 856(c)(3)(C) of the Code, (iv) dividends or other
distributions on, and gain (other than gain from "prohibited
transactions" within the meaning of Section 857(b)(6)(B)(iii) of the
Code) from the sale or other disposition of, transferable shares (or
transferable certificates of beneficial interest) in other
qualifying REITs within the meaning of Section 856(d)(3)(D) of the
Code, and (v) amounts described in Sections 856(c)(3)(E) through
856(c)(3)(I) of the Code.
(ii) At the close of each taxable year, at least 95
percent of NYMF's gross income consists of (i) the items of income
described in paragraph 1 hereof (other than those described in
Section 856(c)(3)(I) of the Code), (ii) gain realized
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from the sale or other disposition of stock or securities which are
not property described in Section 1221(a)(1) of the Code, (iii)
interest and (iv) dividends, in each case within the meaning of
Section 856(c)(2) of the Code.
(iii) At the close of each quarter of NYMF's taxable
years, at least 75 percent of the value of NYMF's total assets (as
determined in accordance with Treasury Regulations Section
1.856-2(d)) has consisted of and will consist of real estate assets
within the meaning of Sections 856(c)(4) and 856(c)(5)(B) of the
Code, cash and cash items (including receivables which arise in the
ordinary course of NYMF's operations, but not including receivables
purchased from another person), and Government Securities; unless
(a) the test described in this paragraph (iii) has been satisfied as
of the end of the immediately preceding quarter of NYMF's taxable
year, (b) such test is not satisfied as the result of the
acquisition of a security or property during the current quarter of
NYMF's taxable year, (c) NYMF delivers within 10 days of the end of
the current quarter of NYMF's taxable year to Buyer notice that such
test is not satisfied, (d) such test is satisfied within the 30 day
period as provided under section 856(c)(4), and (e) an officer of
NYMF certifies as to such satisfaction within such 30 day period,
and provides documentation, reasonably satisfactory to Buyer
evidencing such satisfaction.
(iv) At the close of each quarter of each of NYMF's
taxable years, (a) not more than 25 percent of NYMF's total asset
value will be represented by securities (other than those described
in paragraph 3), (b) not more than 20 percent of NYMF's total asset
value will be represented by securities of one or more taxable REIT
subsidiaries, and (c) (i) not more than 5 percent of the value of
NYMF's total assets will be represented by securities of any one
issuer (other than Government Securities and securities of taxable
REIT subsidiaries), and (ii) NYMF will not hold securities
possessing more than 10 percent of the total voting power or value
of the outstanding securities of any one issuer (other than
Government Securities, securities of taxable REIT subsidiaries, and
securities of a qualified REIT subsidiary within the meaning of
Section 856(i) of the Code); unless (d) the tests described in this
paragraph (iv) have been satisfied as of the end of the immediately
preceding quarter of NYMF's taxable year, (e) any of the tests
described in this paragraph (iv) are not satisfied as the result of
the acquisition of a security or property during the current quarter
of NYMF's taxable year, (f) NYMF delivers within 10 days of the end
of the current quarter of NYMF's taxable year to Buyer notice that
such test is not satisfied, (g) such test is satisfied within the 30
day period as provided under section 856(c)(4), and (h) an officer
of NYMF certifies as to such satisfaction within such 30 day period,
and provides documentation, reasonably satisfactory to Buyer
evidencing such satisfaction.
An Event of Default shall be deemed to be continuing unless
expressly waived by Buyer in writing.
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16. REMEDIES UPON DEFAULT
In the event that an Event of Default shall have occurred:
a. Buyer may, at its option (which option shall be deemed to have
been exercised immediately upon the occurrence of an Act of
Insolvency of either Seller, Seller's Affiliate or the Parent
Guarantor), declare an Event of Default to have occurred hereunder
and, upon the exercise or deemed exercise of such option, the
Repurchase Date for each Transaction hereunder shall, if it has not
already occurred, be deemed immediately to occur (except that, in
the event that the Purchase Date for any Transaction has not yet
occurred as of the date of such exercise or deemed exercise, such
Transaction shall be deemed immediately canceled). Buyer shall
(except upon the occurrence of an Act of Insolvency) give notice to
Sellers and the Parent Guarantor of the exercise of such option as
promptly as practicable.
b. If Buyer exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Section, (i) Sellers'
obligations in such Transactions to repurchase all Purchased
Mortgage Loans, at the Repurchase Price therefor on the Repurchase
Date determined in accordance with subparagraph (a) of this Section,
shall thereupon become immediately due and payable, (ii) all Income
paid after such exercise or deemed exercise shall be retained by
Buyer and applied, in Buyer's sole discretion, to the aggregate
unpaid Repurchase Prices for all outstanding Transactions and any
other amounts owing by each Seller hereunder, and (iii) each Seller
shall immediately deliver to Buyer the Mortgage Files relating to
any Purchased Mortgage Loans subject to such Transactions then in
Sellers' possession or control.
c. Buyer also shall have the right to obtain physical possession,
and to commence an action to obtain physical possession, of all
Records and files of each Seller relating to the Purchased Mortgage
Loans and all documents relating to the Purchased Mortgage Loans
(including, without limitation, any legal, credit or servicing files
with respect to the Purchased Mortgage Loans) which are then or may
thereafter come in to the possession of each Seller or any third
party acting for such Seller. To obtain physical possession of any
Purchased Mortgage Loans held by Custodian, Buyer shall present to
Custodian a Trust Receipt and Certification. Buyer shall be entitled
to specific performance of all agreements of each Seller contained
in this Agreement.
d. Buyer shall have the right to direct all servicers then servicing
any Purchased Mortgage Loans to remit all collections thereon to
Buyer, and if any such payments are received by a Seller, such
Seller shall not commingle the amounts received with other funds of
such Seller and shall promptly pay them over to Buyer. Buyer shall
also have the right to terminate any one or all of the servicers
then servicing any Purchased Mortgage Loans with or without cause.
In addition, Buyer shall have the right to immediately sell the
Purchased Mortgage Loans and liquidate all Repurchase Assets. Such
disposition of Purchased Mortgage Loans
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may be, at Buyer's option, on either a servicing-released or a
servicing-retained basis. Buyer shall be entitled to place the
Purchased Mortgage Loans in a pool for issuance of mortgage-backed
securities at the then-prevailing price for such securities and to
sell such securities for such prevailing price in the open market.
Buyer shall also be entitled to sell any or all of such Mortgage
Loans individually for the prevailing price. Buyer shall also be
entitled, in its sole discretion to elect, in lieu of selling all or
a portion of such Purchased Mortgage Loans, to give each Seller
credit for such Purchased Mortgage Loans and the Repurchase Assets
in an amount equal to the Market Value of the Purchased Mortgage
Loans against the aggregate unpaid Repurchase Price and any other
amounts owing by each Seller hereunder.
e. Upon the happening of one or more Events of Default, Buyer may
apply any proceeds from the liquidation of the Purchased Mortgage
Loans and Repurchase Assets to the Repurchase Prices hereunder and
all other Obligations in the manner Buyer deems appropriate in its
sole discretion.
▇. ▇▇▇▇▇▇▇ shall be liable to Buyer for (i) the amount of all
reasonable legal or other expenses (including, without limitation,
all costs and expenses of Buyer in connection with the enforcement
of this Agreement or any other agreement evidencing a Transaction,
whether in action, suit or litigation or bankruptcy, insolvency or
other similar proceeding affecting creditors' rights generally,
further including, without limitation, the reasonable fees and
expenses of counsel (including the costs of internal counsel of
Buyer) incurred in connection with or as a result of an Event of
Default, (ii) damages in an amount equal to the cost (including all
fees, expenses and commissions) of entering into replacement
transactions and entering into or terminating hedge transactions in
connection with or as a result of an Event of Default, and (iii) any
other loss, damage, cost or expense directly arising or resulting
from the occurrence of an Event of Default in respect of a
Transaction.
g. To the extent permitted by applicable law, Sellers shall be
liable to Buyer for interest on any amounts owing by Sellers
hereunder, from the date a Seller becomes liable for such amounts
hereunder until such amounts are (i) paid in full by such Seller or
(ii) satisfied in full by the exercise of Buyer's rights hereunder.
Interest on any sum payable by a Seller under this Section 16(g)
shall be at a rate equal to the Post-Default Rate.
h. Buyer shall have, in addition to its rights hereunder, any rights
otherwise available to it under any other agreement or applicable
law.
i. Buyer may exercise one or more of the remedies available to Buyer
immediately upon the occurrence of an Event of Default and, except
to the extent provided in subsections (a) and (d) of this Section,
at any time thereafter without notice to Sellers. All rights and
remedies arising under this Agreement as amended from time to time
hereunder are cumulative and not exclusive of any other rights or
remedies which Buyer may have.
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j. Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and Sellers hereby expressly waive any
defenses Sellers might otherwise have to require Buyer to enforce
its rights by judicial process. Sellers also waive any defense
(other than a defense of payment or performance) Sellers might
otherwise have arising from the use of nonjudicial process,
enforcement and sale of all or any portion of the Repurchase Assets,
or from any other election of remedies. Sellers recognize that
nonjudicial remedies are consistent with the usages of the trade,
are responsive to commercial necessity and are the result of a
bargain at arm's length.
k. Buyer shall have the right to perform reasonable due diligence
with respect to Sellers and the Mortgage Loans, which review shall
be at the expense of Sellers.
17. REPORTS
a. Notices. Sellers and the Parent Guarantor shall furnish to Buyer
(x) promptly, copies of any material and adverse notices (including,
without limitation, notices of defaults, breaches, potential
defaults or potential breaches) and any material financial
information that is not otherwise required to be provided by Sellers
or the Parent Guarantor hereunder which is given to a Seller's and
Parent Guarantor's lenders, (y) immediately, notice of the
occurrence of any Event of Default hereunder or default or breach by
a Seller or Servicer or the Parent Guarantor of any obligation under
any Program Agreement or any material contract or agreement of a
Seller or Servicer or the Parent Guarantor or the occurrence of any
event or circumstance that such party reasonably expects has
resulted in, or will, with the passage of time, result in, a
Material Adverse Effect or an Event of Default or such a default or
breach by such party and (z) the following:
(1) as soon as available and in any event within sixty
(60) calendar days after the end of each calendar month, the
unaudited consolidated balance sheets of Sellers, their consolidated
Subsidiaries and the Parent Guarantor as at the end of such period
and the related unaudited consolidated statements of income and
retained earnings and of cash flows for the Sellers, their
consolidated Subsidiaries and the Parent Guarantor for such period
and the portion of the fiscal year through the end of such period,
accompanied by a certificate of a Responsible Officer of the Sellers
and the Parent Guarantor, which certificate shall state that said
consolidated financial statements fairly present in all material
respects the consolidated financial condition and results of
operations of Sellers, their consolidated Subsidiaries and the
Parent Guarantor in accordance with GAAP, consistently applied, as
at the end of, and for, such period (subject to normal year-end
adjustments);
(2) as soon as available and in any event within ninety
(90) days after the end of each fiscal year of the Sellers and the
Parent Guarantor, the Consolidated balance sheets of the Sellers,
their consolidated Subsidiaries and the Parent Guarantor as at the
end of such fiscal year and the related Consolidated
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statements of income and retained earnings and of cash flows for the
Sellers, their consolidated Subsidiaries and the Parent Guarantor
for such year, setting forth in each case in comparative form the
figures for the previous year, accompanied by an opinion thereon of
independent certified public accountants of recognized national
standing, which opinion and the scope of audit shall be acceptable
to Buyer in its sole discretion, shall have no "going concern"
qualification and shall state that said consolidated financial
statements fairly present the consolidated financial condition and
results of operations of Sellers, their respective consolidated
Subsidiaries and the Parent Guarantor as at the end of, and for,
such fiscal year in accordance with GAAP;
(3) such other prepared statements that Buyer may
reasonably request;
(4) if applicable, copies of any 10-Ks, 10-Qs,
registration statements and other "corporate finance" SEC filings
(other than 8-Ks) by each Seller and the Parent Guarantor, within 5
Business Days of their filing with the SEC; provided, that, each
Seller, the Parent Guarantor or any Affiliate will provide Buyer and
Credit Suisse First Boston Corporation with a copy of the annual
10-K filed with the SEC by each Seller, the Parent Guarantor or its
Affiliates, no later than 90 days after the end of the year;
(5) (as soon as available, and in any event within
thirty (30) days of receipt, copies of relevant portions of all
final written Agency, FHA, VA, Governmental Authority and investor
audits, examinations, evaluations, monitoring reviews and reports of
its operations (including those prepared on a contract basis) which
provide for or relate to (i) material corrective action required,
(ii) material sanctions proposed, imposed or required, including
without limitation notices of defaults, notices of termination of
approved status, notices of imposition of supervisory agreements or
interim servicing agreements, and notices of probation, suspension,
or non-renewal, or (iii) "report cards," "grades" or other
classifications of the quality of Sellers' operations;
(6) from time to time such other information regarding
the financial condition, operations, or business of each Seller and
the Parent Guarantor as Buyer may reasonably request;
(7) as soon as reasonably possible, and in any event
within thirty (30) days after a Responsible Officer of a Seller or
the Parent Guarantor has knowledge of the occurrence of any Event of
Termination, stating the particulars of such Event of Termination in
reasonable detail;
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(8) As soon as reasonably possible, notice of any of the
following events:
(a) change in the insurance coverage required of Sellers,
Servicer or any other Person pursuant to any Program Agreement, with
a copy of evidence of same attached;
(b) any material dispute, litigation, investigation,
proceeding or suspension between a Seller or Servicer, on the one
hand, and any Governmental Authority or any Person;
(c) any material change in accounting policies or financial
reporting practices of a Seller or Servicer;
(d) with respect to any Purchased Mortgage Loan, immediately
upon receipt of notice or knowledge thereof, that the underlying
Mortgaged Property has been damaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty, or
otherwise damaged so as to affect adversely the value of such
Mortgaged Loan;
(e) any material issues raised upon examination of a Seller or
a Seller's facilities by any Governmental Authority;
(f) any material change in the Indebtedness of a Seller or the
Parent Guarantor, including, without limitation, any default,
renewal, non-renewal, termination, increase in available amount or
decrease in available amount related thereto;
(g) promptly upon receipt of notice or knowledge of (i) any
default related to any Repurchase Asset, (ii) any lien or security
interest (other than security interests created hereby or by the
other Program Agreements) on, or claim asserted against, any of the
Purchased Mortgage Loans; and
(h) any other event, circumstance or condition that has
resulted, or has a possibility of resulting, in a Material Adverse
Effect with respect to a Seller or Servicer.
b. Officer's Certificates. Each Seller will furnish to Buyer, at the
time such Seller furnishes each set of financial statements pursuant
to Section 17(a)(1) or (2) above, a certificate of a Responsible
Officer of such Seller in the form of Exhibit D hereto.
c. Mortgage Loan Reports. Each Seller will furnish to Buyer monthly
electronic Mortgage Loan performance data, including, without
limitation, delinquency reports (i.e., delinquency, foreclosure and
net charge-off reports).
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d. Asset Tape. Each Seller shall provide to Buyer, electronically,
in a format mutually acceptable to Buyer and Sellers, an Asset Tape
by no later than the Reporting Date.
e. Other. Each Seller shall deliver to Buyer any other reports or
information reasonably requested by Buyer or as otherwise required
pursuant to this Agreement.
18. REPURCHASE TRANSACTIONS
Buyer may, in its sole election, engage in repurchase transactions
with the Purchased Mortgage Loans or otherwise pledge, hypothecate, assign,
transfer or otherwise convey the Purchased Mortgage Loans with a counterparty of
Buyer's choice. Unless an Event of Default shall have occurred, no such
transaction shall relieve Buyer of its obligations to transfer Purchased
Mortgage Loans to Sellers pursuant to Section 4 hereof, or of Buyer's obligation
to credit or pay Income to, or apply Income to the obligations of, Sellers
pursuant to Section 7 hereof. In the event Buyer engages in a repurchase
transaction with any of the Purchased Mortgage Loans or otherwise pledges or
hypothecates any of the Purchased Mortgage Loans, Buyer shall have the right to
assign to Buyer's counterparty any of the applicable representations or
warranties herein and the remedies for breach thereof, as they relate to the
Purchased Mortgage Loans that are subject to such repurchase transaction.
19. SINGLE AGREEMENT
Buyer and Sellers acknowledge that, and have entered hereunto, and
will enter into each Transaction hereunder, in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, each of Buyer and Sellers agree (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to
set-off claims and apply property held by them in respect of any Transaction
against obligations owing to them in respect of any other Transactions hereunder
and (iii) that payments, deliveries and other transfers made by either of them
in respect of any Transaction shall be deemed to have been made in consideration
of payments, deliveries and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries and other
transfers may be applied against each other and netted.
20. NOTICES AND OTHER COMMUNICATIONS
Any and all notices (with the exception of Transaction Requests or
Purchase Confirmations, which shall be delivered via facsimile only),
statements, demands or other communications hereunder may be given by a party to
the other by mail, facsimile, messenger or otherwise to the address specified
below, or so sent to such party at any other place specified in a notice of
change of address hereafter received by the other. All notices, demands and
requests
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hereunder may be made orally, to be confirmed promptly in writing, or by other
communication as specified in the preceding sentence.
If to Seller:
The New York Mortgage Company, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
New York Mortgage Funding, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Parent Guarantor:
New York Mortgage Trust, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
For Transaction Requests and Purchase Confirmations:
Credit Suisse First Boston Mortgage Capital LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Phone Number: ▇▇▇-▇▇▇-▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
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For all other Notices:
Credit Suisse First Boston Mortgage Capital LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone Number: ▇▇▇-▇▇▇-▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Credit Suisse First Boston Mortgage Capital LLC
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Legal Department
21. ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the
parties containing general terms and conditions for repurchase transactions.
Each provision and agreement herein shall be treated as separate and independent
from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or agreement.
22. NON ASSIGNABILITY
The Program Agreements are not assignable by either Seller or the
Parent Guarantor. Buyer may from time to time assign all or a portion of its
rights and obligations under this Agreement and the Program Agreements;
provided, however that Buyer shall maintain as agent of Sellers, for review by
Sellers upon written request, a register of assignees and a copy of an executed
assignment and acceptance by Buyer and assignee ("Assignment and Acceptance"),
specifying the percentage or portion of such rights and obligations assigned.
Upon such assignment, (a) such assignee shall be a party hereto and to each
Program Agreement to the extent of the percentage or portion set forth in the
Assignment and Acceptance, and shall succeed to the applicable rights and
obligations of Buyer hereunder, and (b) Buyer shall, to the extent that such
rights and obligations have been so assigned by it to either (i) an Affiliate of
Buyer which assumes the obligations of Buyer or (ii) to another Person approved
by Sellers (such approval not to be unreasonably withheld) which assumes the
obligations of Buyer, be released from its obligations hereunder and under the
Program Agreements. Unless otherwise stated in the Assignment and Acceptance,
Sellers shall continue to take directions solely from Buyer unless otherwise
notified by Buyer in writing. Buyer may distribute to any prospective assignee
any document or other information delivered to Buyer by Sellers.
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23. SET-OFF
In addition to any rights and remedies of Buyer provided by law,
Buyer shall have the right, without prior notice to Sellers or the Parent
Guarantor, any such notice being expressly waived by Sellers or the Parent
Guarantor to the extent permitted by applicable law, upon any amount becoming
due and payable by Sellers or the Parent Guarantor hereunder (whether at the
stated maturity, by acceleration or otherwise) to set-off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by Buyer or any branch or agency thereof to or for the credit or the
account of Sellers or the Parent Guarantor. Buyer agrees promptly to notify
Sellers and the Parent Guarantor after any such set-off and application made by
Buyer; provided, that the failure to give such notice shall not affect the
validity of such set-off and application.
24. BINDING EFFECT; GOVERNING LAW; JURISDICTION
a. This Agreement shall be binding and inure to the benefit of the
parties hereto and their respective successors and permitted
assigns. Each Seller acknowledges that the obligations of Buyer
hereunder or otherwise are not the subject of any guaranty by, or
recourse to, any direct or indirect parent or other Affiliate of
Buyer. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
b. EACH SELLER AND THE PARENT GUARANTOR HEREBY WAIVE TRIAL BY JURY.
EACH SELLER AND THE PARENT GUARANTOR HEREBY IRREVOCABLY CONSENT TO
THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY
ACTION OR PROCEEDING. EACH SELLER AND THE PARENT GUARANTOR HEREBY
SUBMIT TO, AND WAIVE ANY OBJECTION THEY MAY HAVE TO, EXCLUSIVE
PERSONAL JURISDICTION AND VENUE IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇ AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING
TO THE PROGRAM AGREEMENTS.
25. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party
shall constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to exercise
any other remedy hereunder. No
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modification or waiver of any provision of this Agreement and no consent by any
party to a departure herefrom shall be effective unless and until such shall be
in writing and duly executed by both of the parties hereto. Without limitation
on any of the foregoing, the failure to give a notice pursuant to Section 6(a),
16(a) or otherwise, will not constitute a waiver of any right to do so at a
later date.
26. INTENT
a. The parties recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the
United States Code, as amended (except insofar as the type of
Purchased Mortgage Loans subject to such Transaction or the term of
such Transaction would render such definition inapplicable), and a
"securities contract" as that term is defined in Section 741 of
Title 11 of the United States Code, as amended (except insofar as
the type of assets subject to such Transaction would render such
definition inapplicable).
b. It is understood that either party's right to liquidate Purchased
Mortgage Loans delivered to it in connection with Transactions
hereunder or to exercise any other remedies pursuant to Section 16
hereof is a contractual right to liquidate such Transaction as
described in Sections 555 and 559 of Title 11 of the United States
Code, as amended.
c. The parties agree and acknowledge that if a party hereto is an
"insured depository institution," as such term is defined in the
Federal Deposit Insurance Act, as amended ("FDIA"), then each
Transaction hereunder is a "qualified financial contract," as that
term is defined in FDIA and any rules, orders or policy statements
thereunder (except insofar as the type of assets subject to such
Transaction would render such definition inapplicable).
d. It is understood that this Agreement constitutes a "netting
contract" as defined in and subject to Title IV of the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and
each payment entitlement and payment obligation under any
Transaction hereunder shall constitute a "covered contractual
payment entitlement" or "covered contractual payment obligation",
respectively, as defined in and subject to FDICIA (except insofar as
one or both of the parties is not a "financial institution" as that
term is defined in FDICIA).
27. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that:
a. in the case of Transactions in which one of the parties is a
broker or dealer registered with the SEC under Section 15 of the
1934 Act, the Securities Investor Protection Corporation has taken
the position that the provisions of the SIPA do not protect the
other party with respect to any Transaction hereunder;
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b. in the case of Transactions in which one of the parties is a
government securities broker or a government securities dealer
registered with the SEC under Section 15C of the 1934 Act, SIPA will
not provide protection to the other party with respect to any
Transaction hereunder; and
c. in the case of Transactions in which one of the parties is a
financial institution, funds held by the financial institution
pursuant to a Transaction hereunder are not a deposit and therefore
are not insured by the Federal Deposit Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.
28. POWER OF ATTORNEY
Sellers hereby authorize Buyer to file such financing statement or
statements relating to the Repurchase Assets without Sellers' signature thereon
as Buyer, at its option, may deem appropriate. Sellers hereby appoint Buyer as
Sellers' agent and attorney-in-fact to execute any such financing statement or
statements in Sellers' name and to perform all other acts which Buyer deems
appropriate to perfect and continue its ownership interest in and/or the
security interest granted hereby, if applicable, and to protect, preserve and
realize upon the Repurchase Assets, including, but not limited to, the right to
endorse notes, complete blanks in documents, transfer servicing, and sign
assignments on behalf of Sellers as their agent and attorney-in-fact. This
agency and power of attorney is coupled with an interest and is irrevocable
without Buyer's consent. Notwithstanding the foregoing, the power of attorney
hereby granted may be exercised only during the occurrence and continuance of
any Event of Default hereunder. Sellers shall pay the filing costs for any
financing statement or statements prepared pursuant to this Section 28.
29. BUYER MAY ACT THROUGH AFFILIATES
Buyer may, from time to time, designate one or more affiliates for
the purpose of performing any action hereunder.
30. INDEMNIFICATION; OBLIGATIONS
a. Each Seller and the Parent Guarantor agree to hold Buyer and each
of its respective Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party")
harmless from and indemnify each Indemnified Party (and will
reimburse each Indemnified Party as the same is incurred) against
all liabilities, losses, damages, judgments, costs and expenses
(including, without limitation, reasonable fees and expenses of
counsel) of any kind which may be imposed on, incurred by, or
asserted against any Indemnified Party relating to or arising out of
this Agreement, any Transaction Request, Purchase Confirmation, any
Program Agreement or any transaction contemplated hereby or thereby
resulting from anything other than the Indemnified Party's gross
negligence or willful misconduct. Each Seller and the Parent
Guarantor also agree to reimburse each Indemnified Party for all
reasonable expenses in connection with the enforcement of this
Agreement and the exercise of any right or remedy provided for
herein, any Transaction Request, Purchase Confirmation and any
Program
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Agreement, including, without limitation, the reasonable fees and
disbursements of counsel. Each Seller's and the Parent Guarantor's
agreements in this Section 30 shall survive the payment in full of
the Repurchase Price and the expiration or termination of this
Agreement. Each Seller and the Parent Guarantor hereby acknowledge
that their obligations hereunder are recourse obligations of such
Seller and the Parent Guarantor and are not limited to recoveries
each Indemnified Party may have with respect to the Purchased
Mortgage Loans. Each Seller and the Parent Guarantor also agree not
to assert any claim against Buyer or any of their Affiliates, or any
of their respective officers, directors, employees, attorneys and
agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise
relating to the facility established hereunder, the actual or
proposed use of the proceeds of the Transactions, this Agreement or
any of the transactions contemplated thereby. THE FOREGOING
INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES,
WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
b. Without limitation to the provisions of Section 4, if any payment
of the Repurchase Price of any Transaction is made by Sellers other
than on the then scheduled Repurchase Date thereto as a result of an
acceleration of the Repurchase Date pursuant to Section 16 or for
any other reason, Sellers shall, upon demand by Buyer, pay to Buyer
an amount sufficient to compensate Buyer for any losses, costs or
expenses that it may reasonably incur as of a result of such
payment.
c. Without limiting the provisions of Section 30(a) hereof, if
Sellers fail to pay when due any costs, expenses or other amounts
payable by it under this Agreement, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be
paid on behalf of Sellers by Buyer, in its sole discretion.
31. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument.
32. CONFIDENTIALITY
This Agreement and its terms, provisions, supplements and
amendments, and notices hereunder, are proprietary to Buyer and Agent and shall
be held by Sellers and the Parent Guarantor in strict confidence and shall not
be disclosed to any third party without the written consent of Buyer except for
(i) disclosure to Sellers' or Parent Guarantor's direct and indirect Affiliates
and Subsidiaries, attorneys or accountants, but only to the extent such
disclosure is necessary and such parties agree to hold all information in strict
confidence, or (ii) disclosure
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required by law, rule, regulation or order of a court or other regulatory body.
Notwithstanding the foregoing or anything to the contrary contained herein or in
any other Program Agreement, the parties hereto may disclose to any and all
Persons, without limitation of any kind, the federal, state and local tax
treatment of the Transactions, any fact relevant to understanding the federal,
state and local tax treatment of the Transactions, and all materials of any kind
(including opinions or other tax analyses) relating to such federal, state and
local tax treatment and that may be relevant to understanding such tax
treatment; provided that neither Seller may disclose the name of or identifying
information with respect to Buyer or Agent or any pricing terms (including,
without limitation, the Pricing Rate, Non-Utilization Fee, Purchase Price
Percentage and Purchase Price) or other nonpublic business or financial
information (including any sublimits and financial covenants) that is unrelated
to the federal, state and local tax treatment of the Transactions and is not
relevant to understanding the federal, state and local tax treatment of the
Transactions, without the prior written consent of the Buyer.
33. RECORDING OF COMMUNICATIONS
Buyer, Sellers and the Parent Guarantor shall have the right (but
not the obligation) from time to time to make or cause to be made tape
recordings of communications between its employees and those of the other party
with respect to Transactions. Buyer, Sellers and the Parent Guarantor consent to
the admissibility of such tape recordings in any court, arbitration, or other
proceedings. The parties agree that a duly authenticated transcript of such a
tape recording shall be deemed to be a writing conclusively evidencing the
parties' agreement.
34. NON-UTILIZATION FEE
No later than the Price Differential Payment Date following the end
of each calendar month, Sellers shall pay in immediately available funds to
Buyer a non-refundable fee calculated in accordance with the formula set forth
in the schedule attached hereto as Annex II. Such payment shall be made in
Dollars, in immediately available funds, without deduction, set-off or
counterclaim, to Buyer at such account designated by Buyer.
35. PERIODIC DUE DILIGENCE REVIEW
Each Seller acknowledges that Buyer has the right to perform
continuing due diligence reviews with respect to the Sellers and the Mortgage
Loans, for purposes of verifying compliance with the representations, warranties
and specifications made hereunder, or otherwise, and each Seller agrees that
upon reasonable (but no less than one (1) Business Day's) prior notice unless an
Event of Default shall have occurred, in which case no notice is required, to
Sellers, Buyer or its authorized representatives will be permitted during normal
business hours to examine, inspect, and make copies and extracts of, the
Mortgage Files and any and all documents, records, agreements, instruments or
information relating to such Mortgage Loans in the possession or under the
control of Sellers and/or the Custodian. Each Seller also shall make available
to Buyer a knowledgeable financial or accounting officer for the purpose of
answering questions respecting the Mortgage Files and the Mortgage Loans.
Without limiting the generality of the foregoing, each Seller acknowledges that
Buyer may purchase Mortgage Loans from Sellers based solely upon the information
provided by Sellers to Buyer in the Purchased
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Assets Schedule and the representations, warranties and covenants contained
herein, and that Buyer, at its option, has the right at any time to conduct a
partial or complete due diligence review on some or all of the Mortgage Loans
purchased in a Transaction, including, without limitation, ordering Broker's
price opinions, new credit reports and new appraisals on the related Mortgaged
Properties and otherwise re-generating the information used to originate such
Mortgage Loan. Buyer may underwrite such Mortgage Loans itself or engage a
mutually agreed upon third party underwriter to perform such underwriting. Each
Seller agrees to cooperate with Buyer and any third party underwriter in
connection with such underwriting, including, but not limited to, providing
Buyer and any third party underwriter with access to any and all documents,
records, agreements, instruments or information relating to such Mortgage Loans
in the possession, or under the control, of Sellers. Sellers further agree that
Sellers shall pay all out-of-pocket costs and expenses incurred by Buyer in
connection with Buyer's activities pursuant to this Section 35 ("Due Diligence
Costs").
36. AUTHORIZATIONS
Any of the persons whose signatures and titles appear on Schedule 2
are authorized, acting singly, to act for Sellers or Buyer, as the case may be,
under this Agreement.
37. ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES
Buyer has in place internal policies and procedures that expressly
prohibit its purchase of any High Cost Mortgage Loan.
38. DOCUMENTS MUTUALLY DRAFTED
Each Seller and the Buyer agree that this Agreement each other
Program Agreement prepared in connection with the Transactions set forth herein
have been mutually drafted and negotiated by each party, and consequently such
documents shall not be construed against either party as the drafter thereof.
39. JOINT AND SEVERAL
Each Seller, the Parent Guarantor and the Buyer hereby acknowledge
and agree that Sellers and the Parent Guarantor are each jointly and severally
liable to Buyer for all of their respective obligations hereunder.
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[Signature Page Follows]
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IN WITNESS WHEREOF, each Seller, the Parent Guarantor and the Buyer
have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the date first above written.
Credit Suisse First Boston Mortgage Capital LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Date: Vice President
The New York Mortgage Company, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: President / CEO
New York Mortgage Funding, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: President / CEO
New York Mortgage Trust, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Date: Chairman / Co-CEO
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED MORTGAGE LOANS
(a) Payments Current. All payments required to be made up to the
Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent at any
time since the origination of the Mortgage Loan. The first Monthly Payment shall
be made, or shall have been made, with respect to the Mortgage Loan on its Due
Date or within the grace period, all in accordance with the terms of the related
Mortgage Note.
(b) No Outstanding Charges. All taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and payable.
Neither Sellers nor the Qualified Originator from which a Seller acquired the
Mortgage Loan has advanced funds, or induced, solicited or knowingly received
any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or date of
disbursement of the proceeds of the Mortgage Loan, whichever is earlier, to the
day which precedes by one month the Due Date of the first installment of
principal and interest thereunder.
(c) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination; except by a written instrument which has been
recorded, if necessary to protect the interests of Buyer, and which has been
delivered to the Custodian and the terms of which are reflected in the Custodial
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required, and
its terms are reflected on the Custodial Mortgage Loan Schedule. No Mortgagor in
respect of the Mortgage Loan has been released, in whole or in part, except in
connection with an assumption agreement approved by the title insurer, to the
extent required by such policy, and which assumption agreement is part of the
Mortgage File delivered to the Custodian and the terms of which are reflected in
the Custodial Mortgage Loan Schedule.
(d) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor in respect of the Mortgage Loan was a debtor
in any state or Federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated. Neither Seller has knowledge nor has it received
any notice that any Mortgagor in respect of the Mortgage Loan is a debtor in any
state or federal bankruptcy or insolvency proceeding.
O-1
(e) Hazard Insurance. The Mortgaged Property is insured by a fire
and extended perils insurance policy, issued by a Qualified Insurer, and such
other hazards as are customary in the area where the Mortgaged Property is
located, and to the extent required by the related Seller as of the date of
origination consistent with the Underwriting Guidelines, against earthquake and
other risks insured against by Persons operating like properties in the locality
of the Mortgaged Property, in an amount not less than the greatest of (i) 100%
of the replacement cost of all improvements to the Mortgaged Property, (ii) the
outstanding principal balance of the Mortgage Loan, or (iii) the amount
necessary to avoid the operation of any co-insurance provisions with respect to
the Mortgaged Property, and consistent with the amount that would have been
required as of the date of origination in accordance with the Underwriting
Guidelines. If any portion of the Mortgaged Property is in an area identified by
any federal Governmental Authority as having special flood hazards, and flood
insurance is available, a flood insurance policy meeting the current guidelines
of the Federal Emergency Management Agency is in effect with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (1) the outstanding principal balance of the Mortgage Loan and,
with respect to any Second Lien Mortgage Loan, the outstanding principal balance
of the prior mortgage loan, (2) the full insurable value of the Mortgaged
Property, and (3) the maximum amount of insurance available under the National
Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of
1974. All such insurance policies (collectively, the "hazard insurance policy")
contain a standard mortgagee clause naming each Seller, its successors and
assigns (including, without limitation, subsequent owners of the Mortgage Loan),
as mortgagee, and may not be reduced, terminated or canceled without 30 days'
prior written notice to the mortgagee. No such notice has been received by
either Seller. All premiums on such insurance policy have been paid. The related
Mortgage obligates the Mortgagor to maintain all such insurance and, at such
Mortgagor's failure to do so, authorizes the mortgagee to maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement therefor
from such Mortgagor. Where required by state law or regulation, the Mortgagor
has been given an opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a "master" or "blanket" hazard insurance
policy covering a condominium, or any hazard insurance policy covering the
common facilities of a planned unit development. The hazard insurance policy is
the valid and binding obligation of the insurer and is in full force and effect.
Neither Seller has engaged in, and has no knowledge of the Mortgagor's having
engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity and
binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
Person, and no such unlawful items have been received, retained or realized by
either Seller.
(f) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and the related
Seller shall maintain or shall cause its agent to maintain in its possession,
available for the inspection of Buyer, and shall deliver to Buyer, upon demand,
evidence of compliance with all such requirements.
O-2
(g) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. Neither Seller has waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has
either Seller waived any default resulting from any action or inaction by the
Mortgagor.
(h) Location and Type of Mortgaged Property. The Mortgaged Property
is located in an Acceptable State as identified in the Custodial Mortgage Loan
Schedule and consists of a single parcel of real property with a single family
residence erected thereon, or a two- to four-family dwelling, or an individual
condominium unit in a low-rise or high-rise condominium project, or an
individual unit in a planned unit development or a de minimis planned unit
development; provided, however, that any condominium unit or planned unit
development shall conform with the applicable ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac
requirements regarding such dwellings or shall conform to underwriting
guidelines acceptable to Buyer in its sole discretion and that no residence or
dwelling is a mobile home. No portion of the Mortgaged Property is used for
commercial purposes; provided, that, the Mortgaged Property may be a mixed use
property if such Mortgaged Property conforms to underwriting guidelines
acceptable to Buyer in its sole discretion. (i) Valid First or Second Lien. The
Mortgage is a valid, subsisting, enforceable and perfected (a) with respect to
each first lien Mortgage Loan, first priority lien and first priority security
interest, or (b) with respect to each Second Lien Mortgage Loan, second priority
lien and second priority security interest, in each case, on the real property
included in the Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
a. the lien of current real property taxes and assessments not yet due
and payable;
b. covenants, conditions and restrictions, rights of way, easements and
other matters of the public record as of the date of recording acceptable
to prudent mortgage lending institutions generally and specifically
referred to in Buyer's title insurance policy delivered to the originator
of the Mortgage Loan and (a) referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which do not
adversely affect the Appraised Value of the Mortgaged Property set forth
in such appraisal;
c. 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
d. with respect to each Mortgage Loan which is a Second Lien Mortgage
Loan, a first lien on the Mortgaged Property.
O-3
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable first lien and first priority
security interest or (b) with respect to each Second Lien Mortgage Loan, second
priority lien and second priority security interest on the property described
therein and Sellers have full right to pledge and assign the same to Buyer. The
Mortgaged Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secure debt or other security
instrument creating a lien subordinate to the lien of the Mortgage.
(j) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor or
guarantor, if applicable, in connection with a Mortgage Loan are genuine, and
each is the legal, valid and binding obligation of the maker thereof enforceable
in accordance with its terms. All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by such related parties. To best
of the each Seller's knowledge, no fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
on the part of any Person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. Each Seller has reviewed all of the documents
constituting the Mortgage File and has made such inquiries as it deems necessary
to make and confirm the accuracy of the representations set forth herein. To the
best of each Seller's knowledge, except as disclosed to Buyer in writing, all
tax identifications and property descriptions are legally sufficient; and tax
segregation, where required, has been completed.
(k) Full Disbursement of Proceeds. Except with respect to HELOCs and
Construction Mortgage Loans, there is no further requirement for future advances
under the Mortgage Loan, and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and the recording of the Mortgage were paid,
and the Mortgagor is not entitled to any refund of any amounts paid or due under
the Mortgage Note or Mortgage.
(l) Ownership. Sellers have full right to sell the Mortgage Loan to
Buyer free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest, and has full right and authority
subject to no interest or participation of, or agreement with, any other party,
to sell each Mortgage Loan pursuant to this Agreement and following the sale of
each Mortgage Loan, Buyer will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest except any such security interest created pursuant to the
terms of this Agreement.
(m) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (i) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (ii) either (A) organized
under the laws of such state, (B) qualified to do business in such state,
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(C) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (D) not doing business in such
state.
(n) Title Insurance. Other than HELOCs where the Underwriting
Guidelines provide for origination without title insurance and the Take-out
Investor does not require title insurance for its purchase thereof, the Mortgage
Loan is covered by either (i) an attorney's opinion of title and abstract of
title, the form and substance of which is acceptable to prudent mortgage lending
institutions making mortgage loans in the area wherein the Mortgaged Property is
located or (ii) an ALTA lender's title insurance policy or other generally
acceptable form of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac
and each such title insurance policy is issued by a title insurer acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the related Seller, its successors
and assigns, as to the first or second priority lien of the Mortgage, as
applicable, in the original principal amount of the Mortgage Loan, with respect
to a Mortgage Loan other than a HELOC, or the original Credit Limit, with
respect to a HELOC (or to the extent a Mortgage Note provides for negative
amortization, the maximum amount of negative amortization in accordance with the
Mortgage), subject only to the exceptions contained in clauses (1), (2) and (3)
and, with respect to Second Lien Mortgage Loans, clause (4) of paragraph (i) of
this Schedule 1, and in the case of adjustable rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress and against encroachments by or upon
the Mortgaged Property or any interest therein. The title policy does not
contain any special exceptions (other than the standard exclusions) for zoning
and uses and has been marked to delete the standard survey exception or to
replace the standard survey exception with a specific survey reading. The
related Seller, its successors and assigns, are the sole insureds of such
lender's title insurance policy, and such lender's title insurance policy is
valid and remains in full force and effect and will be in force and effect upon
the consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and no prior holder
or servicer of the related Mortgage, including the related Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other Person, and no
such unlawful items have been received, retained or realized by the related
Seller.
(o) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event has
occurred which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation or event
of acceleration, and neither Seller nor their predecessors have waived any
default, breach, violation or event of acceleration.
(p) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the
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law could give rise to such liens) affecting the Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(q) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lie wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning and building law, ordinance or
regulation.
(r) Origination; Payment Terms. The Mortgage Loan was originated by
or in conjunction with a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National Housing Act,
a savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or similar banking institution which is supervised and
examined by a federal or state authority. Other than with respect to HELOCs,
principal and/or interest payments on the Mortgage Loan commenced no more than
60 days after funds were disbursed in connection with the Mortgage Loan. With
respect to adjustable rate Mortgage Loans, the Mortgage Interest Rate is
adjusted on each Interest Rate Adjustment Date to equal the Index plus the Gross
Margin (rounded up or down to the nearest .125%), subject to the Mortgage
Interest Rate Cap. Other than with respect to a HELOC, or the Credit Limit, with
respect to a HELOC, the Mortgage Note is payable on the first day of each month
in equal monthly installments of principal and/or interest (subject to an
"interest only" period in the case of Interest Only Loans), which installments
of interest (a) with respect to adjustable rate Mortgage Loans are subject to
change on the Interest Rate Adjustment Date due to adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date and (b) with respect to
Interest Only Loans are subject to change on the Interest Only Adjustment Date
due to adjustments to the Mortgage Interest Rate on each Interest Only
Adjustment Date, in both cases with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than 30 years from commencement of amortization.
The Due Date of the first payment under the Mortgage Note is no more than 60
days from the date of the Mortgage Note. With respect to HELOCs, the related
Mortgagor may request advances up to the Credit Limit within the first ten years
following the date of origination. Each HELOC will amortize within 30 years from
the date of origination.
(s) Customary Provisions. The Mortgage Note has a stated maturity.
The Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. Upon default by a
Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage. The Mortgage Note and
Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae.
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(t) Occupancy of the Mortgaged Property. As of the Purchase Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities. Neither Seller has received notification from any
Governmental Authority that the Mortgaged Property is in material non-compliance
with such laws or regulations, is being used, operated or occupied unlawfully or
has failed to have or obtain such inspection, licenses or certificates, as the
case may be. Neither Seller has received notice of any violation or failure to
conform with any such law, ordinance, regulation, standard, license or
certificate. With respect to any Mortgage Loan originated with an
"owner-occupied" Mortgaged Property, the Mortgagor represented at the time of
origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged
Property as the Mortgagor's primary residence.
(u) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (i) above.
(v) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Custodian or
Buyer to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor.
(w) Transfer of Mortgage Loans. Except with respect to Mortgage
Loans intended for purchase by GNMA and for Mortgage Loans registered with MERS,
the Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located.
(x) Due-On-Sale. Except with respect to Mortgage Loans intended for
purchase by GNMA, the Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder.
(y) No Buydown Provisions; No Graduated Payments or Contingent
Interests. Except with respect to Agency Mortgage Loans, the Mortgage Loan does
not contain provisions pursuant to which Monthly Payments are paid or partially
paid with funds deposited in any separate account established by each Seller,
the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other
than the Mortgagor nor does it contain any other similar provisions which may
constitute a "buydown" provision. The Mortgage Loan is not a graduated payment
mortgage loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature.
(z) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Purchase Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the
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consolidated principal amount is expressly insured as having first or, in the
case of Second Lien Mortgage Loans, a second lien priority by a title insurance
policy, an endorsement to the policy insuring the mortgagee's consolidated
interest or by other title evidence acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac.
The consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan.
(aa) No Condemnation Proceeding. There have not been any
condemnation proceedings with respect to the Mortgaged Property and neither
Seller has any knowledge of any such proceedings.
(bb) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination and collection practices used by the originator,
each servicer of the Mortgage Loan and the related Seller with respect to the
Mortgage Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all respects legal
and proper. With respect to escrow deposits and Escrow Payments, (other than
with respect to each Second Lien Mortgage Loan and for which the mortgagee under
the first lien is collecting Escrow Payments) all such payments are in the
possession of, or under the control of, either Seller and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or payments due
the related Seller have been capitalized under the Mortgage or the Mortgage
Note. All Mortgage Interest Rate adjustments have been made in strict compliance
with state and federal law and the terms of the related Mortgage Note. Any
interest required to be paid pursuant to state, federal and local law has been
properly paid and credited.
(cc) Conversion to Fixed Interest Rate. Except as allowed by ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac or otherwise as expressly approved in writing by Buyer, with
respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible
to a fixed interest rate Mortgage Loan.
(dd) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, PMI Policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with the
placement of any such insurance, no commission, fee, or other compensation has
been or will be received by either Seller or by any officer, director, or
employee of either Seller or any designee of either Seller or any corporation in
which either Seller or any officer, director, or employee had a financial
interest at the time of placement of such insurance.
(ee) Servicemembers Civil Relief Act. The Mortgagor has not notified
either Seller, and neither Seller has any knowledge, of any relief requested or
allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.
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(ff) Appraisal. Except with respect to HELOCs originated in
accordance with the Underwriting Guidelines, the Mortgage File contains an
appraisal of the related Mortgaged Property signed prior to the funding of the
Mortgage Loan, duly appointed by the related Seller, who had no interest, direct
or indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan, and the appraisal and appraiser both satisfy the
requirements of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and Title XI of the Federal
Institutions Reform, Recovery, and Enforcement Act of 1989 as amended and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
(gg) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of adjustable rate mortgage loans, and
each Seller maintains such statement in the Mortgage File.
(hh) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property.
(ii) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Purchase Date (whether or not known to either Seller
on or prior to such date) which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any private mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of either Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay.
(jj) Capitalization of Interest. The Mortgage Note does not by its
terms provide for the capitalization or forbearance of interest.
(kk) No Equity Participation. No document relating to the Mortgage
Loan provides for any contingent or additional interest in the form of
participation in the cash flow of the Mortgaged Property or a sharing in the
appreciation of the value of the Mortgaged Property. The indebtedness evidenced
by the Mortgage Note is not convertible to an ownership interest in the
Mortgaged Property or the Mortgagor and neither Seller has financed nor does it
own directly or indirectly, any equity of any form in the Mortgaged Property or
the Mortgagor.
(ll) Proceeds of Mortgage Loan. The proceeds of the Mortgage Loan
have not been and shall not be used to satisfy, in whole or in part, any debt
owed or owing by the Mortgagor to any Seller or any Affiliate or correspondent
of any Seller, except in connection with a refinanced Mortgage Loan; provided,
however, that no such refinanced Mortgage Loan shall have been originated
pursuant to a streamlined mortgage loan refinancing program.
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(mm) Origination Date. The origination date is no earlier than
thirty (30) days prior to the related Purchase Date.
(nn) No Exception. The Custodian has not noted any material
exceptions on a Custodial Mortgage Loan Schedule with respect to the Mortgage
Loan which would materially adversely affect the Mortgage Loan or Buyer's
interest in the Mortgage Loan.
(oo) Mortgage Submitted for Recordation. The Mortgage either has
been or will promptly be submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.
(pp) Documents Genuine. Such Purchased Mortgage Loan and all
accompanying collateral documents are complete and authentic and all signatures
thereon are genuine. Such Purchased Mortgage Loan is a "closed" loan fully
funded by the related Seller and held in the related Seller's name.
(qq) Bona Fide Loan. Such Purchased Mortgage Loan arose from a bona
fide loan, complying with all applicable State and Federal laws and regulations,
to persons having legal capacity to contract and is not subject to any defense,
set-off or counterclaim.
(rr) Other Encumbrances. To the best of each Seller's knowledge, any
property subject to any security interest given in connection with such
Purchased Mortgage Loan is not subject to any other encumbrances other than a
stated first mortgage, if applicable, and encumbrances which may be allowed
under the Underwriting Guidelines.
(ss) Description. Each Purchased Mortgage Loan conforms to the
description thereof as set forth on the related Custodial Mortgage Loan Schedule
delivered to the Custodian and Buyer.
(tt) Located in U.S. No collateral (including, without limitation,
the related real property and the dwellings thereon and otherwise) relating to a
Purchased Mortgage Loan is located in any jurisdiction other than in one of the
fifty (50) states of the United States of America or the District of Columbia.
(uu) Underwriting Guidelines. Each Purchased Mortgage Loan has been
originated in accordance with the Underwriting Guidelines (including all
supplements or amendments thereto) previously provided to Buyer.
(vv) Committed Mortgage Loans. Each Committed Mortgage Loan is
covered by a Take-out Commitment, does not exceed the availability under such
Take-out Commitment (taking into consideration mortgage loans which have been
purchased by the respective Take-out Investor under the Take-out Commitment and
mortgage loan which each Seller has identified to Buyer as covered by such
Take-out Commitment) and conforms to the requirements and the specifications set
forth in such Take-out Commitment and the related regulations, rules,
requirements and/or handbooks of the applicable Take-out Investor and is
eligible for sale to and insurance or guaranty by, respectively the applicable
Take-out Investor and applicable insurer. Each Take-out Commitment is a legal,
valid and binding obligation of each Seller enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar
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laws affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(ww) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans are classified as High Cost Mortgage Loans.
(xx) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that
is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing
by each Seller to hold the related Mortgage Loan Documents as agent and bailee
for Buyer or Buyer agent and to promptly forward such Mortgage Loan Documents in
accordance with the provisions of the Custodial Agreement and the Escrow
Instruction Letter.
(yy) FHA Mortgage Insurance; VA Loan Guaranty. With respect to the
FHA Loans, the FHA Mortgage Insurance Contract is in full force and effect and
there exists no impairment to full recovery without indemnity to the Department
of Housing and Urban Development or the FHA under FHA Mortgage Insurance. With
respect to the VA Loans, the VA Loan Guaranty Agreement is in full force and
effect to the maximum extent stated therein. All necessary steps have been taken
to keep such guaranty or insurance valid, binding and enforceable and each of
such is the binding, valid and enforceable obligation of the FHA and the VA,
respectively, to the full extent thereof, without surcharge, set-off or defense.
Each FHA Loan and VA Loan was originated in accordance with the criteria of an
Agency for purchase of such Mortgage Loans.
(zz) Revolving Period. Each HELOC provides for an initial period
(the "Revolving Period") during which the Mortgagor is required to make monthly
payments of interest payable in arrears and requires repayment of the unpaid
principal balance thereof over a period following the Revolving Period (the
"Repayment Period") which is not in excess of 120 months. As of the Purchase
Date no HELOC was in its Repayment Period. The Mortgage Interest Rate on each
Mortgage Loan adjusts periodically in accordance with the Credit Line Agreement
to equal the sum of the Index and the related Gross Margin. On each Adjustment
Date the related Seller has made interest rate adjustments on the Mortgage Loan
which are in compliance with the related Mortgage and Mortgage Note and
applicable law.
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