EXHIBIT 10.16.2
AMENDED AND RESTATED LOAN AGREEMENT
By and Among:
AHM SPV I, LLC,
As the Borrower,
LA FAYETTE ASSET SECURITIZATION LLC,
As an Issuer,
AMSTERDAM FUNDING CORPORATION,
As an Issuer,
▇▇▇▇▇▇ CAPITAL LLC,
As an Issuer,
PARK AVENUE RECEIVABLES COMPANY,
As an Issuer,
CALYON NEW YORK BRANCH,
As a Bank, a Managing Agent and as the Administrative Agent,
LLOYDS TSB BANK PLC,
As a Bank,
ABN AMRO BANK N.V.,
As a Bank and as a Managing Agent,
SOCIETE GENERALE,
As a Bank and as a Managing Agent,
JPMORGAN CHASE BANK, N.A.
As a Bank and as a Managing Agent,
and
AMERICAN HOME MORTGAGE SERVICING, INC.,
As the Servicer
Dated as of November 22, 2005
TABLE OF CONTENTS
Page
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ARTICLE I GENERAL TERMS......................................................2
1.1. Certain Definitions..............................................2
1.2. Other Definitional Provisions...................................32
ARTICLE II AMOUNT AND TERMS OF COMMITMENT...................................33
2.1. Maximum Facility Amount.........................................33
2.2. Promissory Notes................................................35
2.3. Notice and Manner of Obtaining Borrowings.......................35
2.4. Fees............................................................37
2.5. Prepayments.....................................................38
2.6. Business Days...................................................38
2.7. Payment Procedures..............................................38
2.8. The Reserve Account.............................................42
2.9. Interest Allocations............................................44
2.10. Interest Rates..................................................44
2.11. Quotation of Rates..............................................44
2.12. Default Rate....................................................44
2.13. Interest Recapture..............................................44
2.14. Interest Calculations...........................................45
2.15. Interest Period.................................................45
2.16. Additional Costs................................................46
2.17. Additional Interest on Advances Bearing a Eurodollar Rate.......48
2.18. Consequential Loss..............................................48
2.19. Taxes...........................................................48
2.20. Replacement Banks...............................................50
2.21. LIBOR Determination Date........................................51
ARTICLE III COLLATERAL......................................................51
3.1. Collateral......................................................51
3.2. Delivery of Collateral to Collateral Agent......................52
3.3. Redemption of Mortgage Collateral...............................53
3.4. Releases of Mortgage Notes for Servicing........................56
3.5. Collateral Reporting............................................56
3.6. Hedge Reporting.................................................56
3.7. Servicer Monthly Reporting......................................56
3.8. Approved Take-Out Investor Reporting............................57
ARTICLE IV CONDITIONS PRECEDENT.............................................57
4.1. Initial Borrowing under this Agreement..........................57
4.2. All Borrowings..................................................58
ARTICLE V REPRESENTATIONS AND WARRANTIES....................................60
5.1. Representations of the Borrower and the Servicer................60
5.2. Additional Representations of the Borrower......................63
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5.3. Additional Representations and Warranties of the
Servicer........................................................65
5.4. Survival of Representations.....................................66
ARTICLE VI AFFIRMATIVE COVENANTS............................................66
6.1. Financial Statements and Reports................................66
6.2. Taxes and Other Liens...........................................68
6.3. Maintenance.....................................................68
6.4. Further Assurances..............................................68
6.5. Compliance with Laws............................................69
6.6. Insurance.......................................................69
6.7. Accounts and Records............................................70
6.8. Periodic Visits.................................................70
6.9. Notice of Certain Events........................................70
6.10. Performance of Certain Obligations..............................71
6.11. Use of Proceeds; Margin Stock...................................71
6.12. Notice of Default...............................................72
6.13. [Reserved]......................................................72
6.14. Compliance with Material Agreements.............................72
6.15. Operations and Properties.......................................72
6.16. ▇▇▇▇▇▇..........................................................72
6.17. Full Disclosure.................................................72
6.18. Environmental Compliance........................................72
6.19. Closing Instructions............................................73
6.20. Special Affirmative Covenants Concerning Collateral.............73
6.21. Corporate Separateness..........................................73
ARTICLE VII NEGATIVE COVENANTS..............................................75
7.1. Limitations on Mergers and Acquisitions.........................75
7.2. Fiscal Year.....................................................75
7.3. Business........................................................75
7.4. Use of Proceeds.................................................75
7.5. Actions with Respect to Collateral..............................76
7.6. Liens...........................................................76
7.7. Employee Benefit Plans..........................................76
7.8. Change of Principal Office......................................76
7.9. No Commercial, A&D, Etc. Loans..................................77
7.10. [Reserved]......................................................77
7.11. Indebtedness....................................................77
7.12. Deposits to Collection Account..................................77
7.13. Transaction Documents...........................................77
7.14. Distributions, Etc..............................................77
7.15. Limited Liability Company Agreement.............................77
7.16. Minimum Tangible Net Worth......................................78
7.17. Positive Net Income of Performance Guarantor....................78
7.18. Collateral Value to Adjusted Consolidated Funded Debt Ratio.....78
ARTICLE VIII EVENTS OF DEFAULT..............................................78
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8.1. Nature of Event.................................................78
8.2. Default Remedies................................................83
8.3. Paydowns........................................................84
8.4. Waivers of Notice, Etc..........................................84
ARTICLE IX THE ADMINISTRATIVE AGENT.........................................85
9.1. Authorization...................................................85
9.2. Reliance by Agent...............................................85
9.3. Agent and Affiliates............................................86
9.4. Lender Decision.................................................86
9.5. Rights of the Administrative Agent..............................86
9.6. Indemnification of Administrative Agent.........................86
9.7. UCC Filings.....................................................86
9.8. Notices and Payments to Managing Agents.........................87
ARTICLE X INDEMNIFICATION...................................................87
10.1. Indemnities by the Borrower.....................................87
ARTICLE XI ADMINISTRATION AND COLLECTION OF MORTGAGE LOANS..................88
11.1. Designation of Servicer.........................................88
11.2. Duties of Servicer..............................................88
11.3. Certain Rights of the Administrative Agent......................89
11.4. Rights and Remedies.............................................89
11.5. Indemnities by the Servicer.....................................90
ARTICLE XII THE MANAGING AGENTS.............................................91
12.1. Authorization...................................................91
12.2. Reliance by Agent...............................................91
12.3. Agent and Affiliates............................................92
12.4. Notices.........................................................92
12.5. Lender Decision.................................................92
12.6. Indemnification of Managing Agents..............................92
ARTICLE XIII MISCELLANEOUS..................................................93
13.1. Notices.........................................................93
13.2. Amendments, Etc.................................................96
13.3. Invalidity......................................................97
13.4. Restrictions on Informal Amendments.............................97
13.5. Cumulative Rights...............................................98
13.6. Construction; Governing Law.....................................98
13.7. Interest........................................................98
13.8. Right of Offset.................................................99
13.9. Successors and Assigns..........................................99
13.10. Survival of Termination.......................................101
13.11. Exhibits......................................................101
13.12. Titles of Articles, Sections and Subsections..................101
13.13. Counterparts..................................................101
13.14. No Proceedings................................................101
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13.15. Confidentiality...............................................102
13.16. Recourse Against Directors, Officers, Etc.....................102
13.17. Waiver of Jury Trial..........................................103
13.18. Consent to Jurisdiction; Waiver of Immunities.................103
13.19. Costs, Expenses and Taxes.....................................103
13.20. Entire Agreement..............................................104
13.21. Excess Funds..................................................104
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SCHEDULES AND EXHIBITS
Schedule I Bank Commitments and Percentages - ss.3.2(b)
Schedule II Approved Take-Out Investors - ss.3.2(b)
Schedule III Litigation - ss.5.1(g)(i)
Exhibit A Form of Assignment and Acceptance - ss.1.1
Exhibit B Form of Subordination Agreement - ss.4.1(f)
Exhibit C Form of Borrowing Report - ss.2.3(a)(i)
Exhibit D Collateral Agency Agreement - ss.1.1
Exhibit D-1 Definitions - ss.1
Exhibit D-2 Form of Security Agreement - ss.3.1(a)
Exhibit D-3 Form of Collection Account Control Agreement - ss.3.1(b)
Exhibit D-4 Form of Assignment - ss.3.1(c) and ss.3.2(a)
Exhibit D-5 Form of Transfer Request - ss. 3.3(a)
Exhibit D-5A Form of Shipping Request - ss.3.3(b)
Exhibit D-6(a) Form of Bailee and Security Agreement Letter - ss.
3.4(b)(i)
Exhibit D-6(b) Form of Bailee and Security Agreement Letter for Pool
Custodian ss. 3.4(b)(i)
Exhibit D-7 Form of Trust Receipt and Security Agreement for
Approved Take-Out Investors - ss.3.5
Exhibit D-8 Collateral Agent Daily Report - ss.3.5
Exhibit D-9 Borrowing Report
Exhibit D-10 UCC Financing Statements - ss.3.1(d)
Exhibit D-11 Collection Account Release Notice
Exhibit D-12 Assignment of Trade
Exhibit E Form of Promissory Note - ss. 2.2
Exhibit F Form of Servicer Monthly Report - ss. 3.7
Exhibit G-1 Form of Servicer Performance Guaranty
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Exhibit G-2 Form of Originator Performance Guaranty
Exhibit H-1 Servicer's Quarterly Officer's Certificate - ss. 6.1(e)
Exhibit H-2 Borrower's Quarterly Officer's Certificate - ss. 6.1(e)
Exhibit I [Reserved].
Exhibit J [Reserved].
Exhibit K Form of Hedge Report - ss. 3.6
Exhibit L Form of Reserve Account Control Agreement
Exhibit M Each Originator's Underwriting Guidelines
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AMENDED AND RESTATED LOAN AGREEMENT
Dated as of November 22, 2005
THIS AMENDED AND RESTATED LOAN AGREEMENT, among AHM SPV I, LLC, a Delaware
limited liability company (hereinafter, together with its successors and
assigns, the "Borrower"), LA FAYETTE ASSET SECURITIZATION LLC, a Delaware
limited liability company (hereinafter, together with its successors and
assigns, "La Fayette"), AMSTERDAM FUNDING CORPORATION, a Delaware corporation
(hereinafter, together with its successors and assigns, "Amsterdam"), ▇▇▇▇▇▇
CAPITAL LLC, a Delaware limited liability company (hereinafter, together with
its successors and assigns, "▇▇▇▇▇▇"), PARK AVENUE RECEIVABLES COMPANY, a
Delaware corporation (hereinafter, together with its successors and assigns,
"Park Avenue"), CALYON NEW YORK BRANCH ("Calyon"), as a Bank, as a Managing
Agent and the Administrative Agent, LLOYDS TSB BANK PLC ("Lloyds"), as a Bank,
ABN AMRO BANK N.V. ("ABN AMRO"), as a Bank and as a Managing Agent, SOCIETE
GENERALE ("SG"), as a Bank and as a Managing Agent, JPMORGAN CHASE BANK, N.A.
("JPMorgan"), as a Bank and as a Managing Agent, and AMERICAN HOME MORTGAGE
SERVICING, INC., a Maryland corporation, as the Servicer (hereinafter, together
with its successors and assigns, the "Servicer").
RECITALS
1. Capitalized terms used in these Recitals and not defined in the
preamble above have the meanings set forth in Article I.
2. The Borrower, La Fayette as an Issuer, Calyon as a Bank and as the
Administrative Agent, and American Home Mortgage Corp. have entered into that
certain Loan Agreement dated as of August 8, 2003, as amended from time to time
(the "Original Loan Agreement").
3. Pursuant to an Assignment and Assumption Agreement dated April 6, 2005,
Lloyds became a party to the Original Loan Agreement.
4. The Borrower, La Fayette as an Issuer, and Calyon as a Bank and as the
Administrative Agent, and Lloyds, as a Bank, now wish to amend and restate the
Original Loan Agreement in order to replace American Home Mortgage Corp. with
American Home Mortgage Servicing, Inc. as the Servicer, to add Amsterdam,
▇▇▇▇▇▇, Park Avenue, ABN AMRO, SG and JPMorgan as parties thereto and to amend
certain other provisions thereof.
5. The Originators are engaged in the business of originating, acquiring,
investing in, marketing and selling, for their own account, mortgage loans that
are made either to finance the purchase of one- to four-family owner-occupied
homes or to refinance loans secured by such properties.
6. The Borrower has purchased, and may continue to purchase, Eligible
Mortgage Loans from the Originators, as determined from time to time by the
Borrower and the Originators.
7. In order to finance such purchases, the Borrower has requested that the
Lenders provide the Borrower with credit in the form of revolving loans on the
terms and conditions set forth herein.
8. The Issuers may, in their sole discretion (except that ▇▇▇▇▇▇ shall),
and the Banks (other than the Banks in the SG Group) shall, in each case subject
to the terms and conditions contained in this Agreement, make Advances to the
Borrower secured by a lien on, and security interest in, the Mortgage Loans and
certain other Collateral.
9. The Lenders have appointed the Administrative Agent as their agent to
perform certain administrative duties for the Lenders including, among other
things, the administration of the funding of the transactions hereunder and the
making of certain determinations hereunder and in connection herewith.
AGREEMENTS
In consideration of the recitals and the representations, warranties,
conditions, covenants and agreements made in this Agreement, the sufficiency of
which are acknowledged by all parties hereto, the Borrower, the Lenders, the
Servicer, the Managing Agents and the Administrative Agent, intending to be
legally bound, hereby establish a warehouse line of credit in the amount of the
Maximum Facility Amount. Accordingly, the Borrower, the Lenders, the
Administrative Agent, the Managing Agents and the Servicer covenant and agree as
follows:
ARTICLE I
GENERAL TERMS
1.1. Certain Definitions.
As used in this Agreement, the following terms have the following meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"ABN AMRO" has the meaning specified in the preamble of this Agreement.
"ABN AMRO Group" means Amsterdam and ABN AMRO.
"ABR Allocation" means all or any portion of Principal Debt if interest
thereon is calculated by reference to the Eurodollar Rate or the Alternate Base
Rate.
"Accepted Servicing Standards" means the same manner in which the Servicer
services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to any relationship that the Servicer or any Affiliate of the Servicer
may have with the related Obligor, or the Servicer's right to receive
compensation for its services hereunder.
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"Adjusted Consolidated Funded Debt" means, on any date of determination,
the sum of (a) the Consolidated Funded Debt of AHMIC and any other Person which
would be reflected on the consolidated balance sheet of AHMIC prepared in
accordance with GAAP if such balance sheet were prepared as of such date of
determination, less (b) 50% of any Subordinated Debt, less (c) the mortgage debt
associated with the building and the land located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Administrative Agent" means Calyon, in its capacity as administrative
agent for the Lenders, or any successor administrative agent.
"Administrative Agent's Account" means, the special account (account
number 01-50576-0001-00-001, ABA No. ▇▇▇▇▇▇▇▇▇) of Calyon maintained at the
office of Calyon New York Branch at 1301 Avenue of the Americas, New York, New
York.
"Advance" means any amount disbursed by the Lenders to the Borrower
pursuant to Section 2.1, whether such amount constitutes an original
disbursement of funds to the Borrower under this Agreement or a continuation of
an amount outstanding.
"Advance Rate" means (i) with respect to a Conforming Loan, ninety-eight
percent (98%) or, if a Conforming FICO Score Trigger Event or Conforming
Loan-to-Value Ratio Trigger Event has occurred and is continuing, as reported to
the Collateral Agent by the Administrative Agent, then zero, (ii) with respect
to a Jumbo Loan (other than a Super Jumbo Loan), ninety-eight percent (98%) or,
if a Non-Conforming FICO Score Trigger Event or Non-Conforming Loan-to-Value
Ratio Trigger Event has occurred and is continuing, as reported to the
Collateral Agent by the Administrative Agent, then zero, (iii) with respect to a
Super Jumbo Loan, ninety-five percent (95%) or, if a Non-Conforming FICO Score
Trigger Event or Non-Conforming Loan-to-Value Ratio Trigger Event has occurred
and is continuing, as reported to the Collateral Agent by the Administrative
Agent, then zero and (iv) with respect to an Alt-A Loan, ninety seven percent
(97%) or, if a Non-Conforming FICO Score Trigger Event or Non-Conforming
Loan-to-Value Ratio Trigger Event has occurred and is continuing, as reported to
the Collateral Agent by the Administrative Agent, then zero.
"Advanced Funds" means funds advanced to an escrow agent for purposes of
funding a Mortgage Loan to be pledged hereunder.
"Affected Party" means each Lender, the Administrative Agent, each
Managing Agent, any bank party to a Liquidity Agreement, any party providing
credit enhancement or liquidity to any issuer, and any permitted assignee or
participant of any such bank, and any holding company of an Affected Party.
"Affiliate" of any Person means (a) any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person, or (b) any other Person who is a director, officer or employee (i) of
such Person, or (ii) of any Person described in the preceding clause (a). For
purposes of this definition, the term "control" (and the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession or ownership, directly or indirectly, of the power either (x) to
direct or cause the direction of the management and policies of such Person,
whether by contract or
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otherwise, or (y) vote 10% or more of the securities having ordinary power in
the election of directors of such Person.
"Aggregate Collateral Value" means an amount equal to the sum of the
products of the book values (as determined in accordance with GAAP) of the
consolidated assets of AHMIC and its Subsidiaries, such assets being categorized
in the classes set forth on the calculation schedule that is part of Exhibit E
attached to the Credit Agreement, times the percentage multiplier for each such
class set forth on such calculation schedule.
"Agreement" or the "Loan Agreement" means this Amended and Restated Loan
Agreement, as amended, restated, modified or supplemented from time to time.
"AHMIC" means American Home Mortgage Investment Corp., a Maryland
corporation.
"Alt-A Loan" means a Mortgage Loan (other than a Conforming Loan or a
Jumbo Loan) that (1) does not conform to the conventional underwriting standards
of ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae but that is underwritten in a manner
designed to be purchased by an Approved Take-Out Investor (other than ▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae), within guidelines generally acceptable to
industry norms for "Alt-A" loans, (2) has a demonstrated secondary market and is
readily securitizable, and (3) matches all applicable requirements for purchase
under the requirements of a Take Out Commitment or Hedge specifically issued for
the purchase of such Mortgage Loan.
"Alternate Base Rate" means, with respect to any Group Bank, on any date,
a fluctuating rate of interest per annum equal to the higher of:
(a) the rate of interest most recently announced by such Group Bank as its
base rate, changing when and as said base rate changes; or
(b) the Federal Funds Rate (as defined below) most recently determined by
the Administrative Agent plus 1.0% per annum.
For purposes of this definition, "Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal (for each day during such period) to
(i) the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
immediately preceding Business Day) by the Federal Reserve Bank of New York; or
(ii) if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by any Group Bank in connection with
extensions of credit.
"Amended and Restated Administrative Agent Fee Letter" means that certain
letter, dated as of the date hereof, among the Administrative Agent, the
Borrower and the Servicer, regarding fees for the Administrative Agent.
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"Amsterdam" has the meaning specified in the preamble of this Agreement.
"Annual Extension Date" shall mean (i) November 21, 2006, and (ii)
thereafter, if consented to by the Lenders, the Managing Agents and the
Administrative Agent pursuant to Section 2.1(a), the date that is specified by
the Lenders, the Managing Agents and the Administrative Agent in the applicable
consent, which date shall not be more than 364 days following the then effective
Annual Extension Date.
"Approved Hedge Counterparty" means:
(a) ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae, or
(b) any Person with short-term ratings of at least P-1 from ▇▇▇▇▇'▇ and
either at least A-1 from S&P or at least F1 from Fitch, or long-term unsecured
debt ratings (or in the case of a bank without such ratings that is the
principal subsidiary of a bank holding company, the rating of the bank holding
company) of at least Aa2 by ▇▇▇▇▇'▇, and either at least AA from S&P or at least
AA from Fitch, or
(c) any Person with short-term ratings of at least P-1 from ▇▇▇▇▇'▇, and
either at least A-1 from S&P or at least F1 from Fitch, or long-term unsecured
debt ratings (or in the case of a bank without such ratings that is the
principal subsidiary of a bank holding company, the rating of the bank holding
company) of at least A2 from ▇▇▇▇▇'▇, and either at least A from S&P or at least
A from Fitch, limited to a concentration limit of 50% of the concentration
percentage for such Person as shown on Schedule II, or such other concentration
percentage approved by the Majority Banks, or
(d) all other Persons as may be approved by the Majority Banks, which
approvals may be subject to certain concentration limits;
provided that (i) except for an Approved Hedge Counterparty defined above in
section (d), if an Approved Hedge Counterparty has a short-term rating or a
long-term unsecured debt rating at the time such Person becomes an "Approved
Hedge Counterparty" and such Person's short-term ratings or long-term unsecured
debt ratings are subsequently downgraded or withdrawn, such Person shall cease
to be an "Approved Hedge Counterparty"; provided, further, that with respect to
any ▇▇▇▇▇▇ issued by such Person prior to the date of such downgrade or
withdrawal, such Person shall cease to be an "Approved Hedge Counterparty" sixty
(60) days following such downgrade or withdrawal; and (ii) if an Approved Hedge
Counterparty does not have a short-term rating or a long-term unsecured debt
rating, such Person shall cease to be an "Approved Hedge Counterparty" upon
prior written notice from the Administrative Agent, which shall provide such
notice if the Administrative Agent has (or if the Majority Banks notify the
Administrative Agent that they have) good faith concerns about the future
performance of such Person; provided, further, that with respect to any ▇▇▇▇▇▇
issued by such Person prior to such notice, such Person shall cease to be an
"Approved Hedge Counterparty" sixty (60) days following such notice.
"Approved Take-Out Investor" means:
(a) ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae, or
5
(b) any Person with short-term ratings of at least P-1 from ▇▇▇▇▇'▇, and
either at least A-1 from S&P or at least F1 from Fitch, or long-term unsecured
debt ratings (or in the case of a bank without such ratings that is the
principal subsidiary of a bank holding company, the rating of the bank holding
company) of at least Aa2 by ▇▇▇▇▇'▇, and either at least AA from S&P or at least
AA from Fitch, or
(c) any Person with short-term ratings of at least P-1 from ▇▇▇▇▇'▇, and
either at least A-1 from S&P or at least F1 from Fitch, or long-term unsecured
debt ratings (or in the case of a bank without such ratings that is the
principal subsidiary of a bank holding company, the rating of the bank holding
company) of at least A2 from ▇▇▇▇▇'▇, and either at least A from S&P or at least
A from Fitch, limited to a concentration limit of 50% of the concentration
percentage for such Person as shown on Schedule II, or such other concentration
percentage approved by the Majority Banks, or
(d) all other Persons as may be approved by the Majority Banks, which
approvals may be subject to certain concentration limits;
provided that (i) except for an Approved Take-Out Investor defined above in
section (d), if an Approved Take-Out Investor has a short-term rating or a
long-term unsecured debt rating at the time such Person becomes an "Approved
Take-Out Investor" and such Person's short-term ratings or long-term unsecured
debt ratings are subsequently downgraded or withdrawn, such Person shall cease
to be an "Approved Take-Out Investor"; provided, further, that with respect to
any Take-Out Commitments issued by such Person prior to the date of such
downgrade or withdrawal, such Person shall cease to be an "Approved Take-Out
Investor" sixty (60) days following such downgrade or withdrawal; and (ii) if an
Approved Take-Out Investor does not have a short-term rating or a long-term
unsecured debt rating, such Person shall cease to be an "Approved Take-Out
Investor" upon prior written notice from the Administrative Agent, which shall
provide such notice if the Administrative Agent has (or if the Majority Banks
notify the Administrative Agent that they have) good faith concerns about the
future performance of such Person; provided, further, that with respect to any
Take-Out Commitments issued by such Person prior to such notice, such Person
shall cease to be an "Approved Take-Out Investor" sixty (60) days following such
notice.
As of the date of this Agreement, Schedule II hereto sets forth the Approved
Take-Out Investors pursuant to the preceding clauses (b) and (c) (and any
applicable concentration limits). Schedule II shall be updated from time to time
as Approved Take-Out Investors are added or deleted or concentration limits are
changed pursuant to the preceding clauses (b) and (c).
"Assignment" is defined in the Collateral Agency Agreement.
"Assignment and Acceptance" means an assignment and acceptance agreement
entered into by a Bank, an Eligible Assignee and the Administrative Agent,
pursuant to which such Eligible Assignee may become a party to this Agreement,
in substantially the form of Exhibit A hereto.
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"Availability" means, at the time determined, the Maximum Facility Amount
minus the Principal Debt.
"Available Collateral Value" means, at the time determined, the excess of
the Collateral Value of all Eligible Mortgage Collateral over the Principal
Debt.
"Bailee and Security Agreement Letter" is defined in Section 3.4(b)(i) of
the Collateral Agency Agreement.
"Bank" means each of Calyon, Lloyds, ABN AMRO, SG, JPMorgan and each
respective Eligible Assignee that shall become a party to this Agreement
pursuant to an Assignment and Acceptance and in accordance with Section 13.9
hereof.
"Bank Commitment" means, (a) with respect to Calyon, Lloyds, ABN AMRO,
JPMorgan and SG, the amounts set forth on Schedule I hereto, and (b) with
respect to a Bank that has entered into an Assignment and Acceptance, the amount
set forth therein as such Bank's Bank Commitment, in each case as such amount
may be reduced by each Assignment and Acceptance entered into between such Bank
and an Eligible Assignee, and as may be further reduced (or terminated) pursuant
to the next sentence. Any reduction (or termination) of the Maximum Facility
Amount pursuant to the terms of this Agreement shall (unless otherwise agreed by
all the Banks) reduce ratably (or terminate) each Bank's Bank Commitment. At no
time shall the aggregate Bank Commitments of all Banks exceed the Maximum
Facility Amount. Notwithstanding anything to the contrary herein, the Group
Banks related to ▇▇▇▇▇▇ shall have no commitment hereunder to make Advances, but
▇▇▇▇▇▇ shall have a commitment equal to the Bank Commitment of its related Group
Banks.
"Bank Commitment Percentage" means, for any Bank as of any date, the
amount obtained by dividing such Bank's Bank Commitment on such date by the
aggregate Bank Commitments of all related Group Banks on such date. As of the
date of this Agreement, the Bank Commitment Percentage for each Bank is as set
forth on Schedule I hereto.
"Bank Margin" means the margin set forth in the Managing Agents Fee
Letter.
"▇▇▇▇▇▇" has the meaning specified in the preamble of this Agreement.
"Base Rate Advance" means an Advance that bears interest at a rate per
annum determined on the basis of the Alternate Base Rate.
"Borrower" has the meaning specified in the preamble of this Agreement.
"Borrowing" means Advances by the Lenders under this Agreement.
"Borrowing Date" means the date, identified by the Borrower in the
relevant Borrowing Report, as the date on which a Borrowing is to be made.
"Borrowing Report" means a request, in the form of Exhibit C to this
Agreement, for a Borrowing pursuant to Article II.
7
"Business Day" means (a) a day on which (i) commercial banks in New York
City, New York and Chicago, Illinois, are not authorized or required to be
closed and (ii) commercial banks in the State in which the Collateral Agent has
its principal office are not authorized or required to be closed, and (b) if
this definition of "Business Day" is utilized in connection with a Eurodollar
Advance, a day on which dealings in United States dollars are carried out in the
London interbank market.
"Calyon" has the meaning set forth in the preamble of this Agreement and
its successors and assigns.
"Calyon Group" means La Fayette, and each Group Bank of La Fayette.
"Closing Protection Rights" means any rights of the Originators or the
Borrower to or under (i) a letter issued by a title insurance company to any of
the Originators assuming liability for certain acts or failure to act on behalf
of a named closing escrow agent, approved attorney or similar Person in
connection with the closing of a Mortgage Loan transaction, (ii) a bond,
insurance or trust fund established to protect a mortgage lender against a loss
or damage resulting from certain acts or failure to act of a closing escrow
agent, approved attorney, title insurance company or similar Person, or (iii)
any other right or claim that any of the Originators or the Borrower may have
against any Person for any loss or damage resulting from such Person's acts or
failure to act in connection with the closing of a Mortgage Loan and the
delivery of the related Mortgage Loan Collateral to the Collateral Agent, any of
the Originators or to the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means Property that is subject to a Lien for the benefit of
the holders of the Obligations.
"Collateral Agency Agreement" means the Amended and Restated Collateral
Agency Agreement, dated as of the date hereof, among the Borrower, the
Collateral Agent and the Administrative Agent, substantially in the form of
Exhibit D hereto, as amended, supplemented, restated or otherwise modified from
time to time.
"Collateral Agent" means Deutsche Bank National Trust Company, and its
successors and assigns.
"Collateral Agent Daily Report" is defined in Section 3.8(a) of the
Collateral Agency Agreement.
"Collateral Deficiency" means, at any time, the amount by which the
Principal Debt exceeds the lesser of (a) the Collateral Value of all Eligible
Mortgage Collateral and (b) if the Collateral Agent holds no Eligible Mortgage
Collateral, zero.
"Collateral Proceeds" means all amounts received by the Borrower, the
Servicer, the Administrative Agent, the Lenders, the Collateral Agent or any
other Person, in respect of the Collateral, whether in respect of principal,
interest, fees or other amounts, including, without limitation, (i) all amounts
received pursuant to Take Out Commitments or ▇▇▇▇▇▇, and (ii) with
8
respect to any Mortgage Loan, all funds that are received from or on behalf of
the related Obligors in payment of any amounts owed (including, without
limitation, purchase prices, finance charges, escrow payments, interest and all
other charges) in respect of such Mortgage Loan, or applied to such amounts owed
by such Obligors (including, without limitation, insurance payments that
Borrower or Servicer applies in the ordinary course of its business to amounts
owed in respect of such Mortgage Loan and net proceeds of sale or other
disposition of Property of the Obligor or any other party directly or indirectly
liable for payment of such Mortgage Loan and available to be applied thereon).
"Collateral Value" means
(A) with respect to each Eligible Mortgage Loan and at all times, an
amount equal to the Advance Rate for such Eligible Mortgage Loan times the least
of:
(1) the lesser of the original principal amount of such Eligible
Mortgage Loan or the acquisition price paid by the related Originator on the
closing and funding of such Eligible Mortgage Loan;
(2) a ratable amount determined by multiplying (a) the weighted
average Market Value of all Mortgage Loans owned by the Originators or the
Borrower, as reflected on the most recent Collateral Agent Daily Report (it
being understood that the Servicer shall provide to the Collateral Agent such
Market Values as of the close of business on the last Business Day of the
previous week (or, while a Default or Event of Default is continuing, more
frequently if so directed by the Administrative Agent) times (b) the original
principal amount of such Eligible Mortgage Loan; and
(3) while a Default or Event of Default is continuing or upon the
direction of any Managing Agent, the Market Value of such Eligible Mortgage
Loan; and
(B) with respect to the Collection Account, the balance of collected funds
therein that is not subject to any Lien in favor of any Person other than the
Lien in favor of the Administrative Agent for the benefit of the holders of the
Obligations;
provided, however, that
(a) at any time, the portion of total Collateral Value that may be
attributable to Jumbo Loans shall not exceed fifty percent (50%) of the Maximum
Facility Amount;
(b) at any time, the portion of total Collateral Value that may be
attributable to Super Jumbo Loans shall not exceed three percent (3%) of the
Maximum Facility Amount, which percentage is a sublimit of the limitation set
forth in clause (a), equal to 6% of the 50% set forth in clause (a) above;
(c) at any time, the portion of total Collateral Value that may be
attributable to Alt-A Loans shall not exceed thirty-five percent (35%) of the
Maximum Facility Amount;
(d) at any time, the portion of total Collateral Value that may be
attributable to Non-Conforming Loans shall not exceed fifty percent (50%) of the
Maximum Facility Amount;
9
(e) at any time, the portion of total Collateral Value that may be
attributable to Mortgage Loans with a Loan-to-Value Ratio greater than 95% shall
not exceed five percent (5%) of the Maximum Facility Amount;
(f) at any time, the portion of total Collateral Value that may be
attributable to Eligible Mortgage Loans (a) with a FICO Score less than or equal
to 640 shall not exceed twenty-five percent (25%) of the Maximum Facility Amount
and (b) with a FICO Score less than or equal to 620 shall not exceed five
percent (5%) of the Maximum Facility Amount;
(g) at any time, the portion of total Collateral Value that may be
attributable to Mortgage Loans for which the Mortgage Notes have been withdrawn
pursuant to Section 3.5 of the Collateral Agency Agreement shall not exceed 2.5%
of the Maximum Facility Amount;
(h) [Reserved];
(i) at any time, the portion of total Collateral Value that may be
attributable to Mortgage Loans that have been Eligible Mortgage Loans owned by
the Borrower for more than 90 days shall be zero; provided, that, this clause
(i) shall not apply to 5% of the total Collateral Value that may be attributable
to Mortgage Loans that have been Eligible Mortgage Loans owned by the Borrower
for more than 90 days but less than 180 days;
(j) a Mortgage Loan that ceases to be an Eligible Mortgage Loan shall have
a Collateral Value of zero;
(k) at any time, (A) except the first five and last five Business Days of
any month, the portion of total Collateral Value that may be attributable to Wet
Loans shall not exceed thirty percent (30%) of the Maximum Facility Amount, and
(B) during the first five and last five Business Days of any month, the portion
of total Collateral Value that may be attributable to Wet Loans shall not exceed
fifty percent (50%) of the Maximum Facility Amount (it being understood that on
any day the Collateral Value of a Wet Loan with respect to which the related
Principal Mortgage Documents have not been delivered to the Collateral Agent
within nine (9) Business Days after the date of origination of the Wet Loan
shall be zero until such Principal Mortgage Documents are so delivered); and
(l) at any time, a Mortgage Loan with respect to which to the related
Obligor is sixty (60) days or more in payment default, shall have a Collateral
Value of zero.
"Collection Account" means the account established pursuant to Section
2.7(b) to be used for (i) the deposit of proceeds from the sale of Mortgage
Loans; and (ii) the payment of the Obligations, it being understood that such
account is controlled by the Administrative Agent pursuant to the Collection
Account Control Agreement, and the Administrative Agent has the authority to
direct the transfer of all funds from the Collection Account.
"Collection Account Bank" means, initially, Deutsche Bank National Trust
Company and, at any time, the institution then holding the Collection Account in
accordance with the terms of the Collection Account Control Agreement.
10
"Collection Account Control Agreement" means the Amended and Restated
Collection Account Control Agreement, dated as of the date hereof, among the
Borrower, the Servicer, the Administrative Agent and the Collection Account
Bank, substantially in the form of Exhibit D-3 hereto, as amended, modified or
supplemented from time to time.
"Collection Period" means, initially, the period commencing on the Initial
Funding Date and ending on November 30, 2005, and thereafter, each calendar
month, beginning on the first day of each month and including the last day of
the month.
"Collections" means, with respect to any Mortgage Asset, all cash
collections (other than in respect of escrows for taxes and insurance premiums
payable under the related Mortgage Loan) and other cash proceeds of such
Mortgage Asset.
"Commercial Paper Notes" means short-term promissory notes issued or to be
issued by the Issuers to fund or maintain their Advances or investments in other
financial assets.
"Commercial Paper Rate" for any Interest Period for the related Advance
means:
(A)(a) with respect to the portion of such Advance funded by La Fayette, a
rate per annum equal to the sum of
(i) the rate or, if more than one rate, the weighted average of the
rates, determined by converting to an interest-bearing equivalent rate per annum
the discount rate (or rates) at which Commercial Paper Notes having a term equal
to such Interest Period and to be issued to fund or to maintain such Advance by
La Fayette (including, without limitation, Principal Debt and accrued and unpaid
interest), may be sold by any placement agent or commercial paper dealer
selected by the Managing Agent for La Fayette, as agreed between each such agent
or dealer and such Managing Agent, plus
(ii) the commissions and charges charged by such placement agent or
commercial paper dealer with respect to such Commercial Paper Notes expressed as
a percentage of such face amount and converted to an interest-bearing equivalent
rate per annum, provided the commissions and charges by the agent or dealer must
in the good faith judgment of the Managing Agent for La Fayette be within market
range; plus
(iii) the Conduit Spread; or
(b) such other rate as La Fayette and the Borrower shall agree to
in writing;
(B) with respect to the portion of such Advance funded by Amsterdam, a
rate per annum equal to the Conduit Spread plus the weighted average of the
rates at which commercial paper notes having a term equal to such Interest
Period may be sold by any CP Dealer selected by Amsterdam, as agreed between
each such CP Dealer and Amsterdam. If such rate is a discount rate, the CP Rate
shall be the rate resulting from Amsterdam's converting such discount rate to an
interest-bearing equivalent rate. The Commercial Paper Rate shall include all
costs and expenses to Amsterdam of issuing the related commercial paper notes,
including all dealer commissions and note issuance costs in connection
therewith;
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(C) with respect to the portion of such Advance funded by ▇▇▇▇▇▇, a rate
(or, if more than one rate, the weighted average of the rates) per annum equal
to the Conduit Spread plus the applicable commercial paper issued by ▇▇▇▇▇▇ and
allocated to fund Advances hereunder, which Commercial Paper Notes may be sold
by any placement agent or commercial paper dealer selected by ▇▇▇▇▇▇, and which
rate shall incorporate (i) applicable commercial paper dealer and placement
agent fees, and commissions and (ii) other funding costs (excluding costs
associated with an Issuer's liquidity fundings) of such Issuer relating to the
facility, such as the costs of funding odd lots or small dollar amounts;
provided that if the rate (or rates) as agreed between such agent or dealer and
such Issuer is a discount rate, then the rate (or if more than one rate, the
weighted average of the rates) resulting from such Issuer's converting such
discount rate (or rates) to an interest-bearing rate per annum;
(D) with respect to the portion of such Advance funded by Park Avenue, a
rate per annum equal to the sum of
(i) the rate (or, if more than one rate, the weighted average of the
rates) at which Commercial Paper Notes having a term equal to such Interest
Period (or portion thereof) may be sold by any placement agent or commercial
paper dealer selected by Park Avenue, as agreed between each such agent or
dealer and Park Avenue, provided, however, that if the rate (or rates) as agreed
between any such agent or dealer and Park Avenue is a discount rate (or rates),
the "Commercial Paper Rate" for such Interest Period (or portion thereof) shall
be the rate (or if more than one rate, the weighted average of the rates)
resulting from Park Avenue's converting such discount rate (or rates) to an
interest-bearing equivalent rate per annum, plus
(ii) accrued commissions in respect of placement agents and
commercial paper dealers and issuing and paying agent fees incurred, in respect
of such Commercial Paper Notes, minus
(iii) any payment received on such date net of expenses in respect
of Consequential Losses related to the prepayment of any purchased interest of
Park Avenue pursuant to the terms of any receivable purchase facilities funded
substantially with such Commercial Paper Notes plus
(iv) the Conduit Spread.
"Conduit Spread" means the margin set forth in the Managing Agents Fee
Letter.
"Conforming FICO Score Trigger Event" means, with respect to Conforming
Loans, that (A)(i) the Conforming Pool Weighted Average FICO Score has been
reported, in a Collateral Agent Daily Report, as less than 675 but more than
650, (ii) a period of ten (10) days has elapsed from the date of receipt of such
report by the Administrative Agent and (iii) the Servicer has not provided to
the Administrative Agent a revised Conforming Pool Weighted Average FICO Score
that is at least 675 or (B)(i) the Conforming Pool Weighted Average FICO Score
has been reported, in a Collateral Agent Daily Report, as less than 650, (ii) a
period of five (5) days has elapsed from the date of receipt of such report by
the Administrative Agent and (iii) the Servicer has not provided to the
Administrative Agent a revised Conforming Pool Weighted Average FICO Score that
is at least 675.
12
"Conforming Loan" means (i) a Mortgage Loan that complies with all
applicable requirements for purchase under a ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or similar
Governmental Authority standard form of conventional mortgage loan purchase
contract, then in effect, or (ii) an FHA Loan or a VA Loan.
"Conforming Loan-to-Value Ratio Trigger Event" means, with respect to
Conforming Loans, that (A)(i) the weighted average Loan-to-Value Ratio has been
reported, in a Collateral Agent Daily Report, as greater than 83% but equal to
or less than 90%, (ii) a period of ten (10) days has elapsed from the date of
receipt of such report by the Administrative Agent and (iii) the Servicer has
not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83% or (B)(i) the weighted
average Loan-to-Value Ratio has been reported, in a Collateral Agent Daily
Report, as greater than 90%, (ii) a period of five (5) days has elapsed from the
date of receipt of such report by the Administrative Agent and (iii) the
Servicer has not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83%.
"Conforming Pool Weighted Average FICO Score" means the ratio of (a) the
sum, for all Conforming Loans, of the product for each Conforming Loan of (i)
its FICO Score and (ii) its original principal balance to (b) the sum of the
original principal balances of all Conforming Loans.
"Consequential Loss" means any loss (measured by the diminution in yield
to the Affected Party as a result of a prepayment) and/or expense (such as any
transaction costs incurred in connection with the reinvestment of a prepayment
or any cost associated with the issuance of Commercial Paper Notes in
anticipation of a Borrowing reported but not accepted by the Borrower) that any
Affected Party reasonably incurs in respect of a Borrowing as a consequence of
(a) any failure or refusal of Borrower (for any reasons whatsoever other than a
default by the Administrative Agent, any Lender or any Affected Party) to take
such Borrowing after Borrower shall have requested it under this Agreement, (b)
any prepayment or payment of such Borrowing that is a Eurodollar Advance or an
Advance bearing interest by reference to the Commercial Paper Rate (including an
assignment of an Advance bearing interest at the Commercial Paper Rate pursuant
to a Liquidity Agreement) on a day other than the last day of the Interest
Period applicable to such Borrowing, (c) any prepayment of any Borrowing that is
not made in compliance with the provisions of Section 2.5(a); provided, that so
long as an Event of Default shall not have occurred, the Borrower shall not be
responsible for any Consequential Loss resulting from changes in the Settlement
Date made by the Administrative Agent, as described in the proviso contained in
the definition of "Settlement Date," or (d) Borrower's failure to make a
prepayment after giving notice under Section 2.5(a) that a prepayment will be
made.
"Consolidated Funded Debt" means, with respect to any Person and on any
date of determination, Indebtedness in any of the following categories:
(a) Debt for borrowed money, including the Credit Agreement
Obligations;
(b) Debt constituting an obligation to pay the deferred purchase
price of property;
13
(c) Debt evidenced by a bond, debenture, note or similar instrument;
(d) Debt constituting, as of any date, any lease of property, real
or personal, which would be capitalized on a balance sheet of the
lessee prepared as of such date in accordance with GAAP, together
with any other lease by such lessee which is in substance a
financing lease, including, without limitation, any lease under
which (i) such lessee has or will have an option to purchase the
property subject thereto at a nominal amount or an amount less than
a reasonable estimate of the fair market value of such property as
of the date such lease is entered into, or (ii) the term of the
lease approximates or exceeds the expected useful life of the
property leased thereunder.
(e) Debt constituting a non-contingent obligation to reimburse the
issuer of any letter of credit or any guarantor or surety for
payments made by such issuer, guarantor or surety; and
(f) Any obligation under any guaranty with respect to Debt of any
other Person of the types described in clauses (a) through (e)
above.
"CP Allocation" means all or any portion of Principal Debt if interest
thereon is calculated by reference to the Commercial Paper Rate.
"CP Borrowing" means a Borrowing bearing interest by reference to the
Commercial Paper Rate.
"CP Dealer" means, at any time, each Person Amsterdam then engages as a
placement agent or commercial paper dealer.
"Credit Agreement" means the Amended and Restated Credit Agreement, dated
as of August 12, 2005, as may be amended from time to time, by and among AHMIC,
American Home Mortgage Corp., American Home Mortgage Servicing, Inc., American
Home Mortgage Acceptance, Inc., certain lenders from time to time party thereto,
and Bank of America, N.A.
"Credit Agreement Obligations" mean any and all debts, obligations and
liabilities of American Home Mortgage Corp., the Servicer, the Performance
Guarantors and American Home Mortgage Acceptance, Inc. to Bank of America, N.A.
as administrative agent under the Credit Agreement and the lenders from time to
time party thereto (whether now existing or hereafter arising, voluntary or
involuntary, whether or not jointly owed with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from time
to time decreased or extinguished and later increased, created or incurred),
arising out of or related to the Loan Documents (as defined in the Credit
Agreement).
"Debt" means (a) all indebtedness or other obligations of a Person (and,
if applicable, that Person's subsidiaries, on a consolidated basis) that, in
accordance with GAAP consistently applied, would be included in determining
total liabilities as shown on the liabilities side of a balance sheet of that
Person on the date of determination, plus (b) all indebtedness or other
14
obligations of that Person (and, if applicable, that Person's subsidiaries, on a
consolidated basis) for borrowed money or for the deferred purchase price of
property or services. For purposes of calculating a Person's Debt, Subordinated
Debt (as defined below) not due within one year of that date may be excluded
from that Person's indebtedness. For purposes of this definition, "Subordinated
Debt" means all indebtedness of a Person for borrowed money that is effectively
subordinated in right of payment to all other present and future obligations on
terms acceptable to the Majority Banks.
"Debtor Laws" means all applicable liquidation, conservatorship,
bankruptcy, fraudulent transfer or conveyance, moratorium, arrangement,
receivership, insolvency, reorganization or similar laws from time to time in
effect affecting the rights of creditors generally.
"Default" means any condition or event that, with the giving of notice or
lapse of time or both and unless cured or waived, would constitute an Event of
Default.
"Default Rate" means a per annum rate of interest equal from day to day to
the lesser of (a) the sum of the Alternate Base Rate plus two percent and (b)
the Maximum Rate.
"Deferred Income" means the amount of income that any of the Originators
or Borrower has deferred, for accounting purposes, pending the sale of Mortgage
Loans, in accordance with Statement of Financial Accounting Standards Number 91
("SFAS 91") and Statement of Financial Accounting Standards Number 122 ("SFAS
122"), each as currently published by the Financial Accounting Standards Board.
"Delinquent Mortgage Loan" means a Mortgage Asset under which the Obligor
is 30 or more days in payment default or the Obligor has taken any action, or
suffered any event of the type described in Sections 8.1(f), 8.1(g) or 8.1(h) or
is in foreclosure.
"Delinquent Ratio" means as of the end of any Collection Period, the ratio
of (i) the principal amount of all Mortgage Loans that were Delinquent Mortgage
Loans at such time, to (ii) the aggregate principal amount of all Mortgage Loans
at such time.
"Dollars" or "$" means the lawful currency of the United States of
America.
"Disbursement Account" means the account established by the Borrower with
the Deutsche Bank National Trust Company or another Eligible Institution
acceptable to the Administrative Agent, it being understood that such account is
controlled by the Administrative Agent pursuant to the Disbursement Account
Control Agreement, and the Administrative Agent has the authority to direct the
transfer of all funds from the Disbursement Account.
"Disbursement Account Control Agreement" means the Amended and Restated
Disbursement Account Control Agreement, dated as of even date herewith, between
the Borrower, the Servicer, the Administrative Agent and Deutsche Bank National
Trust Company, substantially in the form attached as Exhibit D-13 to the
Collateral Agency Agreement, as amended, modified, supplemented or replaced from
time to time.
15
"Eligible Assignee" means (i) Calyon or any of its Affiliates, Lloyds or
any of its Affiliates, ABN AMRO or any of its Affiliates, SG or any of its
Affiliates or JPMorgan or any of its Affiliates, (ii) any Person managed by
Calyon or any of its Affiliates, Lloyds or any of its Affiliates, ABN AMRO or
any of its Affiliates, SG or any of its Affiliates or JPMorgan or any of its
Affiliates, or (iii) any financial or other institution that is acceptable to
the Managing Agent related to the Lender that is making the assignment and,
unless an Event of Default has occurred or is continuing, the Borrower (which
consent shall not be unreasonably withheld).
"Eligible Institution" means any depository institution, organized under
the laws of the United States or any state, having capital and surplus in excess
of $200,000,000, the deposits of which are insured to the full extent permitted
by law by the Federal Deposit Insurance Corporation and that is subject to
supervision and examination by federal or state banking authorities; provided
that such institution also must have short-term debt ratings no lower than P-1
by ▇▇▇▇▇'▇ and A-1 by S&P and, if rated, F1 by Fitch. If such depository
institution publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.
"Eligible Mortgage Collateral" means Eligible Mortgage Loans and the
Collection Account.
"Eligible Mortgage Loan" means a Mortgage Loan:
(a) that (i) is a closed and fully funded Mortgage Loan, (ii) has a
maximum term to maturity of 30 years and the proceeds of which were used either
to finance a portion of the purchase price of a Property encumbered by the
related Mortgage or to refinance a loan secured by such Property, (iii) is
secured by a perfected first-priority Lien on residential real Property
consisting of land and a one-to-four family dwelling thereon which is completed
and ready for owner occupancy, including townhouses and condominiums, and (iv)
was underwritten according to the applicable Originator's Underwriting
Guidelines and was originated or purchased by one of the Originators;
(b) that is a Conforming Loan, a Jumbo Loan or an Alt-A Loan;
(c) in which the Administrative Agent has been granted and continues to
hold a perfected, first-priority, security interest for the benefit of the
holders of the Obligations;
(d) for which the Mortgage Note is payable to or endorsed (without
recourse) in blank and each of such Mortgage Loan and the related Mortgage Note
is a legal, valid and binding obligation of the Obligor thereof;
(e) for which, other than in respect of Wet Loans, the Principal Mortgage
Documents have been received by the Collateral Agent and are in form and
substance acceptable to the Collateral Agent;
(f) that, upon pledge thereof under this Agreement and application of any
related Advance to pay off any prior lienholder as required by the Collateral
Agency Agreement and
16
hereunder, together with the related Mortgage Loan Collateral, is owned
beneficially by Borrower free and clear of any Lien of any other Person other
than the Administrative Agent for the benefit of the holders of the Obligations;
(g) that, together with the related Mortgage Loan Collateral, does not
contravene any Governmental Requirements applicable thereto (including, without
limitation, the Real Estate Settlement Procedures Act of 1974, as amended, and
all laws, rules and regulations relating to usury, truth-in-lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt collection
practices, privacy and other applicable federal, state and local consumer
protection laws) and with respect to which no party to the related Mortgage Loan
Collateral is in violation of any Governmental Requirements (or procedure
prescribed thereby) if such violation would impair the collectability of such
Mortgage Loan or the saleability of such Mortgage Loan under the applicable Take
Out Commitment or Hedge;
(h) that, (i) is not a Delinquent Mortgage Loan at the time it is
transferred to the Borrower pursuant to the Repurchase Agreement; (ii) has not
previously been sold to an Approved Take-Out Investor or any of the Originators
and repurchased by Borrower; (iii) if, it was a Wet Loan when it was assigned to
the Borrower and the time periods set forth in Section 2.3(c) have occurred, the
Principal Mortgage Documents relating to such Wet Loan were delivered to the
Collateral Agent; provided, however, that upon delivery of such Principal
Mortgage Documents to the Collateral Agent, such Mortgage Loans may subsequently
qualify as Eligible Mortgage Loans to support Borrowings subsequent to such
delivery; (iv) has a Loan-to-Value Ratio not in excess of 100%; or (v) has an
original principal balance not in excess of $2,500,000;
(i) that if the Mortgage Loan Collateral has been withdrawn for correction
pursuant to Section 3.4 such Mortgage Loan Collateral has been returned to the
Collateral Agent within 20 calendar days after withdrawal as required by Section
3.4;
(j) that is denominated and payable in U.S. dollars in the United States
and the Obligor of which is a natural person who is a U.S. citizen or resident
alien or a corporation or an inter vivos revocable trust or other legal entity
organized under the laws of the United States or any State thereof or the
District of Columbia;
(k) that is not subject to any right of rescission, setoff, counterclaim
or other dispute whatsoever;
(l) that was acquired by the Borrower from any of the Originators within
60 days after its Mortgage Origination Date;
(m) that is covered by the types and amounts of insurance required by
Section 6.6(b);
(n) with respect to which all representations and warranties made by the
related Originator in the Repurchase Agreement are true and correct in all
material respects and with respect to which all loan level covenants made in the
Repurchase Agreement have been complied with; and
17
(o) that is subjected to the following "Quality Control" measures by
personnel of any of the Originators before the Mortgage Note is funded by such
Originator:
(i) for those Mortgage Loans not originated by any of the
Originators, is subject to being selected at random for a review for
thoroughness and compliance (including truth-in-lending, good faith
estimates and other disclosures); and
(ii) with respect to which, all Mortgage Loan Collateral is prepared
by any of the Originators and submitted to the closing agent at the time
of funding the related Mortgage Loans;
"Employee Plan" means an employee pension benefit plan covered by Title IV
of ERISA and established or maintained by any of the Originators or any ERISA
Affiliate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation, trade or business that is, along
with the Performance Guarantors, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in Sections 414(b),
(c), (m) and (o) of the Code, or Section 4001 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Advance" means an Advance that bears interest at a rate per
annum determined on the basis of the Eurodollar Rate.
"Eurodollar Rate" means, for any Interest Period for any Eurodollar
Advance, for each Lender, an interest rate per annum (expressed as a decimal and
rounded upwards, if necessary, to the nearest one hundredth of a percentage
point) equal to the offered rate per annum for deposits in Dollars in a
principal amount of not less than $10,000,000 for such Interest Period as of
11:00 A.M., London time, two Business Days before (and for value on) the first
day of such Interest Period, that appears on the display designated as "Page
3750" on the Telerate Service (or such other page as may replace "Page 3750" on
that service for the purpose of displaying London interbank offered rates of
major banks); provided, that if such rate is not available on any date when the
Eurodollar Rate is to be determined, then an interest rate per annum determined
by the Administrative Agent equal to the rate at which it would offer deposits
in Dollars to prime banks in the London interbank market for a period equal to
such Interest Period and in a principal amount of not less than $10,000,000 at
or about 11:00 A.M. (London time) on the second Business Day before (and for
value on) the first day of such Interest Period.
"Eurodollar Reserve Percentage" means, with respect to any Bank and for
any Interest Period for such Bank's Eurodollar Advance, the reserve percentage
applicable during such Interest Period (or, if more than one such percentage
shall be so applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Federal Reserve Board (or
18
any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for such Bank with respect to liabilities or assets consisting of
or including Eurocurrency Liabilities having a term equal to such Interest
Period.
"Event of Default" is defined in Section 8.1.
"Excess Spread" means, as of the last day of each Collection Period, a
percentage equal to the Portfolio Yield for such Collection Period minus the
Eurodollar Rate minus the Conduit Spread (to the extent not included in the
interest rate for Advances) and/or Bank Margin (to the extent not included in
the interest rate for Advances), as applicable, minus the Servicer Fee Rate.
"▇▇▇▇▇▇ ▇▇▇" means the government sponsored enterprise formerly known as
the Federal National Mortgage Association, or any successor thereto.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letters" means (i) the Amended and Restated Administrative Agent Fee
Letter and (ii) the Managing Agents Fee Letter.
"FHA" means the Federal Housing Administration, or any successor thereto.
"FHA Loan" means a Mortgage Loan, the ultimate payment of which is
partially or completely insured by the FHA or with respect to which there is a
current, binding and enforceable commitment for such insurance issued by the
FHA.
"FICO Score" means, with respect to the Obligor under a particular
Mortgage Loan, a credit rating established by Fair ▇▇▇▇▇ Corporation.
"Financial Officer" means (i) with respect to the Servicer, any of the
Originators or the Borrower, the chief financial officer, treasurer or a vice
president having the knowledge and authority necessary to prepare and deliver
the financial statements and reports required pursuant to Sections 6.1(b) and
Section 3.8 and (ii) with respect to the Performance Guarantors, the chief
financial officer, the vice president - assistant comptroller, vice president -
assistant treasurer or senior vice president-comptroller.
"First Lien Mortgage Loan" means a loan secured by a perfected first lien
mortgage on real property.
"Fitch" means Fitch, Inc., and any successor thereto.
"▇▇▇▇▇▇▇ Mac" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"GAAP" means generally accepted accounting principles as in effect in the
United States from time to time.
19
"GAAP Net Worth" means with respect to any Person at any date, the excess
of total assets over total liabilities of such Person on such date, each to be
determined in accordance with GAAP consistent with those applied in the
preparation of the financial statements referred to in Section 6.1 of this
Agreement.
"▇▇▇▇▇▇ Mae" means the Government National Mortgage Association, or any
successor thereto.
"Governmental Authority" means any applicable nation or government, any
agency, department, state or other political subdivision thereof, or any
instrumentality thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Governmental Authority shall include, without limitation, each of ▇▇▇▇▇▇▇ Mac,
▇▇▇▇▇▇ ▇▇▇, FHA, HUD, VA and ▇▇▇▇▇▇ Mae.
"Governmental Requirement" means any law, statute, code, ordinance, order,
rule, regulation, judgment, decree, injunction, franchise, permit, certificate,
license, authorization or other requirement (including, without limitation, any
of the foregoing that relate to energy regulations and occupational, safety and
health standards or controls and any hazardous materials laws) of any
Governmental Authority that has jurisdiction over the Originators, the Servicer,
the Collateral Agent or the Borrower or any of their respective Properties.
"Group" means the Calyon Group or the ABN AMRO Group or the JPMorgan Group
or the SG Group.
"Group Bank" means (1) with respect to La Fayette, Calyon, each Bank that
has entered into an assignment and Acceptance with Calyon, including Lloyds, and
each assignee (directly or indirectly) of any such Bank, which assignee has
entered into an Assignment and Acceptance; (2) with respect to Amsterdam, ABN
AMRO, each Bank that has entered into an Assignment and Acceptance with ABN AMRO
and each assignee (directly or indirectly) of any such Bank, which assignee has
entered into an Assignment and Acceptance; (3) with respect to ▇▇▇▇▇▇, ▇▇, each
Bank that has entered into an Assignment and Acceptance with SG and each
assignee (directly or indirectly) of any such Bank, which assignee has entered
into an Assignment and Acceptance; and (4) with respect to Park Avenue,
JPMorgan, each Bank that has entered into an Assignment and Acceptance with
JPMorgan and each assignee (directly or indirectly) of any such Bank, which
assignee has entered into an Assignment and Acceptance.
"Hedge" means a current, valid, binding, enforceable, written commitment,
including, without limitation, a forward purchase commitment, issued by an
Approved Hedge Counterparty, to purchase mortgage loans from one of the
Originators from time to time at a specified price (or a specified spread to an
agreed-upon index), which commitment is not subject to any term or condition (i)
that is not customary in commitments of like nature or (ii) that, in the
reasonably anticipated course of events, cannot be fully complied with prior to
the expiration thereof, in which a perfected security interest has been granted
to the Administrative Agent.
"Hedge Report" means, a report prepared by the Servicer prepared pursuant
to Section 3.6 hereof, showing, as of the close of business on the last Business
Day of each week, all
20
Take-Out Commitments or ▇▇▇▇▇▇ obtained by the Originators to cover all closed
loans owned by the Originators or the Borrower, to the extent that such mortgage
loans have been pledged hereunder or pursuant to another lending arrangement,
and certain information with respect to such trades including such information
as the Administrative Agent may request, in the form of Exhibit K hereto. Each
such Take-Out Commitment or Hedge shall have been pledged to the Administrative
Agent; provided, however, that any ▇▇▇▇▇▇ may have been pledged previously or
may be pledged in the future by the Originators on a pari passu basis.
"HUD" means the Department of Housing and Urban Development, or any
successor thereto.
"Indebtedness" means, for any Person, without duplication, and at any
time, (a) all obligations required by GAAP to be classified on such Person's
balance sheet as liabilities, (b) obligations secured (or for which the holder
of the obligations has an existing contingent or other right to be so secured)
by any Lien existing on property owned or acquired by such Person, (c)
obligations that have been (or under GAAP should be) capitalized for financial
reporting purposes, and (d) all guaranties, endorsements, and other contingent
obligations with respect to obligations of others.
"Indemnified Amounts" is defined in Section 10.1.
"Indemnified Party" is defined in Section 10.1.
"Initial Funding Date" means November 29, 2005.
"Interest Period" is defined in Section 2.15.
"Issuer" means each of La Fayette, Amsterdam, ▇▇▇▇▇▇, and Park Avenue and
their respective successors and assigns.
"Issuer Facility Amount" means, (a) with respect to La Fayette, Amsterdam,
▇▇▇▇▇▇ and Park Avenue, the amounts set forth on Schedule I hereto, and (b) with
respect to an Issuer that has entered into an Assignment and Acceptance, the
amount set forth therein as such Issuer's Issuer Facility Amount, in each case
as such amount may be reduced by each Assignment and Acceptance entered into
between such Issuer and an Eligible Assignee, and as may be further reduced (or
terminated) pursuant to the next sentence. Any reduction (or termination) of the
Maximum Facility Amount pursuant to the terms of this Agreement shall (unless
otherwise agreed by all the Issuers) reduce ratably (or terminate) each Issuer's
Issuer Facility Amount. At no time shall the aggregate Issuer Facility Amounts
of all Issuers exceed the Maximum Facility Amount.
"JPMorgan" has the meaning specified in the preamble of this Agreement.
"JPMorgan Group" means Park Avenue and each Group Bank of Park Avenue.
"Jumbo Loan" means a Mortgage Loan (other than a Conforming Loan) that (1)
is underwritten in a manner designed to be purchased by an Approved Take-Out
Investor (other than ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae), (2) matches all
applicable requirements for
21
purchase under the requirements of a Take Out Commitment or Hedge issued for the
purchase of such Mortgage Loan, and (3) differs from a Conforming Loan solely
because the principal amount of such Mortgage Loan exceeds the limit set for
Conforming Loans by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac from time to time, but shall not
exceed $999,999; provided, however, that a Jumbo Loan having an original
principal balance in excess of $999,999 but not more than $2,500,000 shall
qualify as a Super Jumbo Loan. The term Jumbo Loan includes Super Jumbo Loans.
"La Fayette" has the meaning set forth in the preamble to this Agreement.
"Lenders" means, collectively, the Issuers and the Banks.
"LIBOR" means, for any Interest Period, the London interbank offered rate
for one-month Dollar deposits determined by the Servicer on the LIBOR
Determination Date for such Interest Period in accordance with Section 2.21.
"LIBOR Determination Date" shall mean, with respect to each Interest
Period, the second London Business Day immediately preceding the first day of
such Interest Period.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (whether statutory, consensual or otherwise), or
other security arrangement of any kind (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the uniform commercial code or comparable law
of any jurisdiction in respect of any of the foregoing).
"Limited Liability Company Agreement" means the Borrower's limited
liability company agreement, for which a certificate of formation was filed with
the Secretary of State of the State of Delaware, as amended through the date of
this Agreement.
"Liquidity Agreement" means, with respect to an Issuer, a liquidity loan
agreement, liquidity asset purchase agreement or similar agreement entered into
by the related Group Banks and providing for the making of loans to such Issuer,
or the purchase of Advances (or interests therein) from such Issuer, to support
such Issuer's payment obligations under its Commercial Paper Notes.
"Lloyds" has the meaning specified in the preamble of this Agreement.
"Loan to Value Ratio" means, with respect to any Mortgage Loan, the
fraction, expressed as a percentage found by dividing the original principal
balance of a Mortgage Loan by the value of the related mortgage property, such
value being measured by (i) the appraised value of such property at such time,
if the Mortgage Loan is a refinance of any existing lien or (ii) the lower of
the sales price of the related property at the time of origination of the
Mortgage Loan or the appraised value of such property at such time, if the
Mortgage Loan is a purchase money loan.
"Majority Banks" means, at any time, Banks, including Banks that have
become party to this Agreement pursuant to an Assignment and Acceptance, having
outstanding Advances
22
equal to more than 50% of the aggregate outstanding Advances held by Banks or,
if no Advance is then outstanding from any Bank, Banks having more than 50% of
the Bank Commitments.
"Managing Agent" means, (a) with respect to La Fayette, Calyon or any
successor managing agent designated by such party; (b) with respect to
Amsterdam, ABN AMRO or any successor managing agent designated by such party;
(c) with respect to Park Avenue, JPMorgan or any successor managing agent
designated by such party; and (d) with respect to ▇▇▇▇▇▇, ▇▇ or any successor
managing agent designated by such party.
"Managing Agent's Account" means (a) with respect to Calyon, the special
account (account number 01-25680-001-00-001 ABA No. ▇▇▇▇▇▇▇▇▇) of Calyon
maintained at Calyon; (b) with respect to ABN AMRO, account number 671042302550
ABA No. 026 0095 80 of ABN AMRO maintained at ABN AMRO; (c) with respect to
JPMorgan, account number 645475302 ABA No. ▇▇▇▇▇▇▇▇▇ of JPMorgan maintained at
JPMorgan; and (d) with respect to SG, account number ▇▇▇▇▇▇▇ ABA ▇▇. ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
"Managing Agents Fee Letter" means that certain letter among the Managing
Agents, the Borrower and the Servicer, regarding fees payable to the Managing
Agents.
"Market Value" means at the time determined, for any Mortgage Loan (a) the
market value of such Mortgage Loan determined by the Servicer based upon the
then most recent posted net yield for 30-day mandatory future delivery furnished
by ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or another entity deemed most appropriate
by the Servicer and published and distributed by Telerate Mortgage Services, or,
if such posted net yield is not available from Telerate Mortgage Services, such
posted net yield obtained directly from ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or
another entity deemed most appropriate by the Servicer, or (b) if an appropriate
posted rate is not available, the value determined by the Servicer in good
faith, using commercially reasonable efforts, which efforts shall include
consulting with two or more entities that make a market in similar mortgage
loans, to determine such Market Value. Notwithstanding the foregoing, within
three (3) Business Days of the date upon which a Market Value determination is
provided, any Lender may dispute the Servicer's determination of Market Value in
writing to the Servicer and each of the Lenders. Upon receipt of such a notice,
the Servicer and the Lenders shall make a good faith effort to resolve the
discrepancy. If the discrepancy is not resolved within seven (7) days in a
manner satisfactory to each of the Lenders (an "Unresolved Dispute"), then the
Administrative Agent shall obtain a different market valuation (an "Additional
Determination"). At any time the Administrative Agent may, and upon an
Unresolved Dispute, shall, obtain an Additional Determination. If the
Administrative Agent shall have obtained an Additional Determination as of any
determination date (which Additional Determination may be from the
Administrative Agent or any Affiliate thereof) and the amount of the Additional
Determination as of such determination date is more than 0.50% less than the
amount of the aggregate Market Values determined by the Servicer on such
determination date, then, the amount of the Additional Determination shall be
used as the Market Value for purposes of clause (A)(2) and (A)(3) of the
definition of "Collateral Value." The Borrower shall be solely responsible for
the costs incurred with respect to such Additional Determinations. The
Administrative Agent shall notify the Servicer of the variance between the
Servicer's determination of the Market Value and the Additional Determinations
and the
23
source(s) used by the Administrative Agent to determine the Additional
Determinations. Following such notice and prior to the next determination date,
either (i) the Servicer and the Administrative Agent will determine a mutually
acceptable, reasonable, alternative valuation for the Market Value of such
Mortgage Loan or (ii) the Servicer shall use an amount equal to the Additional
Determination as the Market Value of such Mortgage Loan for subsequent
determination dates until clause (i) is satisfied in good faith.
"Material Adverse Effect" means, with respect to any Person, any material
adverse effect on (i) the validity or enforceability of this Agreement, the
Notes or any other Transaction Document, (ii) the business, operations, total
Property or financial condition of such Person, (iii) the Collateral taken as a
whole, (iv) the enforceability or priority of the Lien in favor of the
Administrative Agent on any material portion of the Collateral, or (v) the
ability of such Person to fulfill its obligations under this Agreement, the
Notes or any other Transaction Document.
"Maximum Facility Amount" means $1,150,000,000, as such amount may be
reduced pursuant to Section 2.1(c) of this Agreement.
"Maximum Rate" means the maximum non-usurious rate of interest that, under
applicable law, each of the Lenders is permitted to contract for, charge, take,
reserve, or receive on the Obligations.
"MERS" means Mortgage Electronic Registration Systems, Inc., a
Delaware corporation.
"MERS Designated Mortgage Loan" means a Mortgage Loan registered to or by
the related Originator on the MERS electronic mortgage registration system.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
"Mortgage" means a mortgage or deed of trust or other security instrument
creating a Lien on real property, on a standard form as approved by ▇▇▇▇▇▇ Mae,
▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae or such other form as any of the Originators
determines is satisfactory for any Approved Take-Out Investor unless otherwise
directed by the Administrative Agent and communicated to the Collateral Agent.
"Mortgage Assets" means, collectively:
(a) any and all Mortgage Loans in which the Administrative Agent, as
secured party, for the benefit of the holders of the Obligations, is granted a
security interest pursuant to any Assignment or other document (whether or not
the Principal Mortgage Documents related thereto are delivered) heretofore or
hereafter from time to time executed by the Borrower;
(b) any and all instruments, documents and other property of every kind or
description, of or in the name of the Borrower, now or hereafter for any reason
or purpose whatsoever, in the possession or control of, or in transit to, the
Collateral Agent;
(c) any and all general intangibles and Mortgage Loan Collateral that
relate in any way to the Mortgage Assets;
24
(d) any and all Take-Out Commitments and ▇▇▇▇▇▇ identified on Hedge
Reports from time to time prepared by the Servicer on behalf of any of the
Originators and the Borrower;
(e) any and all contract rights, chattel paper, certificated securities,
uncertificated securities, financial assets, securities accounts or investment
property which constitute proceeds of the Mortgage Assets;
(f) this Agreement, the Performance Guaranties and the Subordination
Agreement, including all moneys due or to become due thereunder, claims of the
Borrower arising out of or for breach or default thereunder, and the right of
the Borrower to compel performance and otherwise exercise all remedies
thereunder;
(g) any Advanced Funds; and
(h) any and all proceeds of any of the foregoing, including all
Collections.
"Mortgage Loan" means a loan evidenced by a Mortgage Note and secured by a
Mortgage, the beneficial interest of which has been acquired by the Borrower
from any of the Originators by purchase pursuant to the Repurchase Agreement
(with the record owner thereof being such Originator or, in the case of a MERS
Designated Mortgage Loan, MERS as nominee for such Originator, and its
successors and assigns).
"Mortgage Loan Collateral" means all Mortgage Notes and related Principal
Mortgage Documents, Other Mortgage Documents, and other Collateral.
"Mortgage Note" means a promissory note, on a standard form approved by
▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae or such other form as the Originators
determine is satisfactory for any Approved Take-Out Investor unless otherwise
directed by the Administrative Agent and communicated to the Collateral Agent.
"Mortgage Origination Date" means, with respect to each Mortgage Loan, the
date (transmitted to the Collateral Agent) that is the later of (1) the date of
the Mortgage Note or (2) the date such Mortgage Loan was funded and disbursed to
or at the direction of the Obligor.
"Multiemployer Plan" means a multiemployer plan defined in Sections 3(37)
or 4001(a)(3) of ERISA or Section 414(f) of the Code to which Borrower or any
ERISA Affiliate is required to make contributions.
"Net Cash Proceeds" means, with respect to the issuance of any capital
stock by AHMIC, the amount of cash received by AHMIC in connection with such
transaction after deducting therefrom all fees (including, without limitation,
investment banking fees), commissions, costs and other expenses to the extent
attributable to such transaction.
"Non-Conforming FICO Score Trigger Event" means, with respect to
Non-Conforming Loans, that (A)(i) the Non-Conforming Pool Weighted Average FICO
Score has been reported, in a Collateral Agent Daily Report, as less than 675
but equal to or more than 650, (ii) a period of ten (10) days has elapsed from
the date of receipt of such report by the Administrative Agent
25
and (iii) the Servicer has not provided to the Administrative Agent a revised
Non-Conforming Pool Weighted Average FICO Score that is at least 675 or (B)(i)
the Non-Conforming Pool Weighted Average FICO Score has been reported, in a
Collateral Agent Daily Report, as less than 650, (ii) a period of five (5) days
has elapsed from the date of receipt of such report by the Administrative Agent
and (iii) the Servicer has not provided to the Administrative Agent a revised
Non-Conforming Pool Weighted Average FICO Score that is at least 675.
"Non-Conforming Loan" means a Jumbo Loan or an Alt-A Loan.
"Non-Conforming Loan-to-Value Ratio Trigger Event" means, with respect to
Non-Conforming Loans, that (A)(i) the weighted average Loan-to-Value Ratio has
been reported, in a Collateral Agent Daily Report, as greater than 83% but equal
to or less than 90%, (ii) a period of ten (10) days has elapsed from the date of
receipt of such report by the Administrative Agent and (iii) the Servicer has
not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83% or (B)(i) the weighted
average Loan-to-Value Ratio has been reported, in a Collateral Agent Daily
Report, as greater than 90%, (ii) a period of five (5) days has elapsed from the
date of receipt of such report by the Administrative Agent and (iii) the
Servicer has not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83%.
"Non-Conforming Pool Weighted Average FICO Score" means the ratio of (a)
the sum, for all Non-Conforming Loans, of the product for each Non-Conforming
Loan of (i) its FICO Score and (ii) its original principal balance to (b) the
sum of the original principal balances of all Non-Conforming Loans.
"Non-Continuing Lenders" is defined in Section 2.7(c)(iii)(E).
"Note" means each or any of the promissory notes executed by the Borrower,
substantially in the form of Exhibit E hereto, together with all renewals,
extensions, and replacements for any such note.
"Obligations" means any and all present and future indebtedness,
obligations, and liabilities of the Borrower to any of the Lenders, the
Collateral Agent, each Managing Agent, each Affected Party, each Indemnified
Party and the Administrative Agent, and all renewals, rearrangements and
extensions thereof, or any part thereof, arising pursuant to this Agreement or
any other Transaction Document, and all interest and fees accrued thereon, and
attorneys' fees and other costs incurred in the drafting, negotiation,
enforcement or collection thereof, regardless of whether such indebtedness,
obligations, and liabilities are direct, indirect, fixed, contingent, joint,
several or joint and several.
"Obligor" means (i) with respect to each Mortgage Note included in the
Collateral, the obligor on such Mortgage Note and (ii) with respect to any other
agreement included in the Collateral, any person from whom any of the
Originators or the Borrower is entitled to performance.
"Original Loan Agreement" is defined in the Recitals.
26
"Originator Performance Guaranty" means the Amended and Restated
Originator Performance Guaranty, in the form attached hereto as Exhibit G-2, as
confirmed by the Confirmation of Performance Guarantees, dated of even date
herewith, made by the Performance Guarantors in favor of the Borrower, and
assigned to the Administrative Agent for the benefit of the Lenders.
"Originators" means together, American Home Mortgage Corp., a New
York corporation and American Home Mortgage Servicing, Inc., a Maryland
corporation, and their respective successors and assigns.
"Originator's Credit and Collection Policy" means with respect to each
Originator, the Originator's Credit and Collection Policy, attached hereto as
Exhibit M.
"Other Company" means the Performance Guarantors and all of its
Subsidiaries except the Borrower.
"Other Mortgage Documents" is defined in Section 3.2(c).
"Park Avenue" has the meaning specified in the preamble of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Performance Guarantors" means, together, American Home Mortgage Holdings,
Inc., a Delaware corporation, and AHMIC, and their respective successors and
assigns.
"Performance Guaranty" means, collectively, the Servicer Performance
Guaranty and the Originator Performance Guaranty.
"Periodic Visit" is defined in Section 6.8.
"Permitted Transferee" is defined in Section 3.3(c).
"Person" means any individual, corporation (including a business trust),
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization, Governmental Authority, or any
other form of entity.
"Portfolio Yield" means, with respect to any Collection Period, the
percentage equivalent to the amount computed as of the last day of such
Collection Period by multiplying (i) 12 by (ii) (a) the aggregate amount of
interest accrued (whether or not paid) with respect to all Eligible Mortgage
Loans included in the Collateral during such Collection Period divided by (b)
the daily average outstanding principal amount of all Eligible Mortgage Loans
included in the Collateral during such Collection Period.
"Principal Debt" means, at the time determined, the unpaid principal
balance of all Advances under this Agreement.
"Principal Mortgage Documents" is defined in Section 3.2(b).
27
"Program Documents" means, in the case of an Issuer, the related Liquidity
Agreement relating to this Agreement and the other documents executed and
delivered in connection therewith, as each may be amended, supplemented or
otherwise modified from time to time.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Rating Agency" means S&P, ▇▇▇▇▇'▇ and Fitch.
"Reference Banks" shall mean leading banks selected by the Administrative
Agent and engaged in transactions in Eurodollar deposits in the international
Eurocurrency market (i) with an established place of business in London and (ii)
which have been designated as such by the Administrative Agent.
"Regulation T, U, X and Z," respectively, mean Regulation T, U, X and Z
promulgated by the Federal Reserve Board as in effect from time to time, or any
successor regulations thereto.
"Regulatory Change" is defined in Section 2.16.
"Report of Visit" is defined in Section 6.8.
"Repurchase Agreement" means the Master Repurchase Agreement, dated as of
August 8, 2003, and the Amended and Restated Addendum to the Master Repurchase
Agreement incorporated therein, dated as of the date of this Agreement, each
between the Originators, as sellers, and the Borrower, as purchaser, as the same
may be amended, modified or restated from time to time.
"Required Reserve Account Amount" means (i) on any date on which the most
recent Servicer Monthly Report shows LIBOR is less than 4%, 0.25% of the Maximum
Facility Amount on such date, (ii) on any date on which the most recent Servicer
Monthly Report shows LIBOR is less than 5% but greater than or equal to 4%,
0.34% of the Maximum Facility Amount on such date, (iii) on any date on which
the most recent Servicer Monthly Report shows LIBOR is less than 6% but greater
than or equal to 5%, 0.42% of the Maximum Facility Amount on such date and (iv)
on any date on which the most recent Servicer Monthly Report shows LIBOR is
equal to or greater than 6%, 0.50% of the Maximum Facility Amount on such date.
"Requirement of Law" as to any Person means the articles of incorporation,
by-laws, certificate of formation and limited liability company agreement or
other organizational or governing documents of such Person, and any law,
statute, code, ordinance, order, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other determination,
direction or requirement (including, without limitation, any of the foregoing
that relate to energy regulations and occupational, safety and health standards
or controls and any hazardous materials laws) of any Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
28
"Reserve Account" is defined in Section 2.8, it being understood that such
account is assigned to the Administrative Agent pursuant to the Reserve Account
Control Agreement and the Administrative Agent has the authority to direct the
transfer of funds from the Reserve Account.
"Reserve Account Bank" means the institution then holding the Reserve
Account pursuant to Section 2.8, which institution shall be an Eligible
Institution.
"Reserve Account Control Agreement" means the Amended and Restated Reserve
Account Control Agreement, dated of even date herewith, between the Borrower,
the Servicer, the Administrative Agent and the Reserve Account Bank,
substantially in the form attached hereto as Exhibit L, as may be amended,
modified, supplemented or replaced.
"S&P" means Standard & Poor's Rating Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"Security Agreement" is defined in the Collateral Agency Agreement.
"Security Instruments" means (a) the Collateral Agency Agreement, (b) the
Security Agreement, (c) the Collection Account Control Agreement, (d) the
Reserve Account Control Agreement, (e) the Disbursement Account Control
Agreement and (f) such other executed documents as are or may be necessary to
grant to the Administrative Agent a perfected first, prior and continuing
security interest in and to the Collateral and any and all other agreements or
instruments now or hereafter executed and delivered by or on behalf of the
Borrower in connection with, or as security for the payment or performance of,
all or any of the Obligations, as amended, modified or supplemented.
"Servicer" means at any time the Person then authorized pursuant to
Section 11.1 to administer and collect Mortgage Loans on behalf of the Lenders.
The initial Servicer shall be American Home Mortgage Servicing, Inc.
"Servicer Default" means (a) any Event of Default, to the extent relating
to the Servicer (in its capacity as Servicer only), arising under Sections
8.1(a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o),
(u), (v), (w), (x) or (cc)in each case, without giving effect to any provisions
in such sections that make such sections applicable only so long as the Servicer
is one of the Originators, (b) if the Servicer is one of the Originators,
American Home Mortgage Holdings, Inc., as a Performance Guarantor, shall cease
to own directly 100% of all of the stock of the Servicer, or (c) if the Servicer
is one of the Originators, (i) the Servicer's Tangible Net Worth shall be less
than $30,000,000 or (ii) the Servicer's Tangible Net Worth, combined with the
Tangible Net Worth of American Home Mortgage Corp. and American Mortgage
Acceptance, Inc., shall be less than $147,000,000.
"Servicer Fee" is defined in Section 2.4(b).
"Servicer Fee Rate" is defined in Section 2.4(b).
"Servicer Monthly Report" is defined in Section 3.7.
29
"Servicer Performance Guaranty" means the Amended and Restated Servicer
Performance Guaranty, in the form attached hereto as Exhibit G-1, as confirmed
by the Confirmation of Performance Guarantees, of even date herewith, made by
the Performance Guarantors in favor of the Administrative Agent for the benefit
of the Lenders.
"Settlement Date" means the 15th day of each calendar month or, if such
day is not a Business Day, the next succeeding Business Day, provided, however,
that on and after the Termination Date, the Administrative Agent may, with the
consent of the Managing Agents, by notice to the Borrower and the Servicer,
select other days to be Settlement Dates (including days occurring more
frequently than once per month).
"Shipping Request" means the shipping request presented by the Borrower or
the Servicer to the Collateral Agent substantially on the form attached as
Exhibit D-5A (as amended, modified or supplemented from time to time as agreed
to by the Administrative Agent, the Managing Agents, the Borrower and the
Collateral Agent).
"Shortfall Amount" means, with respect to the last day of any Interest
Period or any Settlement Date, the excess, if any, of (a) all amounts due
pursuant to (i) Section 2.7(c)(iii)(B) or Section 2.7(c)(iv)(C) on the last day
of such Interest Period occurring prior to, on or after the Termination Date, as
applicable, (ii) Section 2.7(c)(iii)(A), (C), (D), (E), or (G) on any such
Settlement Date occurring prior to the Termination Date or (iii) Section
2.7(c)(iv)(A), (B), (E), (F), or (H) on any such Settlement Date occurring on or
after the Termination Date, over (b) the sum of the collections then held by the
Servicer for the Lenders and the Administrative Agent pursuant to Section
2.7(c)(ii) plus collected funds then on deposit in the Collection Account.
"SG" has the meaning specified in the preamble of this Agreement.
"SG Group" means ▇▇▇▇▇▇ and each Group Bank of ▇▇▇▇▇▇.
"Special Indemnified Amounts" is defined in Section 11.5.
"Special Indemnified Party" is defined in Section 11.5.
"Subordinated Debt" means the Debt of AHMIC and its Subsidiaries
subordinated to the Credit Agreement Obligations in the manner and to the extent
required by Bank of America, N.A., as administrative agent under the Credit
Agreement, pursuant to written subordination agreements satisfactory in form and
substance to Bank of America, N.A., as administrative agent under the Credit
Agreement.
"Subordination Agreement" means the amended and restated agreement, dated
as of the date hereof, substantially in the form attached as Exhibit B hereto,
executed by the Performance Guarantors and certain of their respective
Affiliates, if applicable, in favor of the Borrower and the Administrative Agent
for the benefit of the holders of the Obligations.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which securities having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such
30
Person, or one or more of its Subsidiaries, or by such Person and one or more of
its Subsidiaries.
"Super Jumbo Loan" means a Jumbo Loan having an original principal balance
in excess of $999,999 but not more than $2,500,000.
"Take-Out Commitment" means a current, valid, binding, enforceable,
written commitment, issued by an Approved Take-Out Investor, to purchase
mortgage loans from one of the Originators from time to time at a specified
price (or a specified spread to an agreed-upon index), which commitment is not
subject to any term or condition (i) that is not customary in commitments of
like nature or (ii) that, in the reasonably anticipated course of events, cannot
be fully complied with prior to the expiration thereof, in which a perfected and
first-priority security interest has been granted to the Administrative Agent.
"Take-Out Commitment Master Agreement" means with respect to which there
is a loan-specific Take-Out Commitment, the master flow sale agreement, investor
bulk sales agreement, or similar agreement setting forth the basic terms of
sales to the related Approved Take-Out Investor.
"Tangible Net Worth" means, with respect to any Person, the excess of
total assets of such Person over the total liabilities of such Person determined
in accordance with GAAP, but excluding from the determination of total assets:
(a) all assets which would be classified as intangible assets under GAAP,
including, without limitation, goodwill (whether representing the excess cost
over book value of assets acquired or otherwise), patents, trademarks, trade
names, copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs and
research and product development costs), (b) loans or other extensions of credit
to officers, employees, shareholders or Affiliates of such Person (other than
the Servicer, the Sellers, the Performance Guarantors and American Home Mortgage
Acceptance, Inc.) and (c) investments in Subsidiaries of such Person (other than
the Servicer, the Sellers, the Performance Guarantors and American Home Mortgage
Acceptance, Inc.).
"Termination Date" means the earliest to occur of (a) November 21, 2006,
unless such date shall be extended pursuant to Section 2.1(a) then the date
specified in such Extension Request, (b) the date on which the Maximum Facility
Amount is terminated by the Borrower pursuant to Section 2.1(d), and (c) the
date, on or after the occurrence of an Event of Default, determined pursuant to
Section 8.2.
"Transaction Document" means any of this Agreement, the Notes, the
Security Instruments, the Collateral Agency Agreement, the Repurchase Agreement,
the Amended and Restated Administrative Agent Fee Letter, the Managing Agents
Fee Letter, the Subordination Agreement, the Servicer Performance Guaranty, the
Originator Performance Guaranty and any and all other agreements or instruments
now or hereafter executed and delivered by or on behalf of the Borrower in
connection with, or as security for the payment or performance of any or all of
the Obligations, as any of such documents may be renewed, amended, restated or
supplemented from time to time.
31
"Transfer Request" is defined in Section 3.3(a).
"UCC" means the Uniform Commercial Code as adopted in the applicable
state, as the same may hereafter be amended.
"Underwriting Guidelines" means, with respect to each Originator, the
Originator's Underwriting Guidelines, a copy of which has been provided to the
Administrative Agent.
"VA" means the Department of Veterans Affairs, or any successor thereto.
"VA Loan" means a Mortgage Loan, the payment of which is partially or
completely guaranteed by the VA under the Servicemen's Readjustment Act of 1944,
as amended, or Chapter 37 of Title 38 of the United States Code or with respect
to which there is a current binding and enforceable commitment for such a
guaranty issued by the VA.
"Wet Borrowing" is defined in Section 2.3(c).
"Wet Loans" is defined in Section 2.3(c).
1.2. Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement have the above-defined meanings when used in the Notes or any other
Transaction Document, certificate, report or other document made or delivered
pursuant hereto.
(b) The words "hereof," "herein," "hereunder" and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, subsection,
schedule and exhibit references herein are references to articles, sections,
subsections, schedules and exhibits to this Agreement unless otherwise
specified.
(c) As used herein, in the Notes or in any other Transaction
Document, certificate, report or other document made or delivered pursuant
hereto, accounting terms relating to any Person and not specifically defined in
this Agreement or therein shall have the respective meanings given to them under
GAAP.
(d) All accounting and financial terms used -- and compliance with
each financial covenant -- in the Transaction Documents shall be determined
under GAAP; however, unless the Administrative Agent and the Managing Agents
have agreed (in writing) to the contrary, the determinations concerning the
financial covenant found in Section 7.1 and the Tangible Net Worth of the
Servicer (so long as the Servicer is one of the Originators), including
determinations of Deferred Income under SFAS 91 and SFAS 122, shall be made
under GAAP, and SFAS 91 and SFAS 122, as in effect on the date of this
Agreement. All accounting principles shall be applied on a consistent basis so
that the accounting principles in a current period are comparable in all
material respects to those applied during the preceding comparable period.
32
ARTICLE II
AMOUNT AND TERMS OF COMMITMENT
2.1. Maximum Facility Amount.
(a) Subject to the terms of this Agreement, from the Initial Funding
Date and so long as (i) the total Principal Debt never exceeds the Maximum
Facility Amount, (ii) the Principal Debt never exceeds the total Collateral
Value of all Eligible Mortgage Collateral, (iii) no Borrowing ever exceeds the
Availability, and (iv) Borrowings are only made on Business Days before the
Termination Date, an Issuer may, in its sole discretion, make an Advance (which
Advances are to be made pro rata based on the Issuer Facility Amounts) and to
the extent that an Issuer does not make such Advance, its Group Banks shall,
ratably in accordance with their Bank Commitments, make Advances to the Borrower
from time to time in such amounts as may be requested by the Borrower pursuant
to Section 2.3, so long as each Borrowing is the least of (x) the Availability,
(y) the Available Collateral Value, and (z) $25,000,000 or integral multiples of
$50,000 in excess thereof. Within the limits of the Maximum Facility Amount, the
Borrower may borrow, prepay (whether pursuant to Section 2.5 or Section 3.3(a)
of this Agreement or otherwise), and reborrow under this Section 2.1.
Notwithstanding the foregoing, subject to the terms of this Agreement, ▇▇▇▇▇▇
shall not decline to make any Advance requested by the Borrower as long as the
conditions set forth in the first sentence of this paragraph are satisfied;
provided that, ▇▇▇▇▇▇ may fund such Advance with the issuance of commercial
paper or may assign such Advance to its related Group Banks; and provided
further that, the Group Banks related to ▇▇▇▇▇▇ shall have no obligation
hereunder to make Advances. Furthermore, it is understood that the Borrower
shall request a new Borrowing with a requested Borrowing Date on the Initial
Funding Date, and upon such date the Advances made by the Lenders in each Bank
Group shall be adjusted so that they are pro rata in accordance with the Issuer
Facility Amounts, but until such Borrowing Date, the only outstanding Advance
shall have been made by the Calyon Group, and there shall be no assignment of
any portion of such Advance to any Lender in any other Group.
(b) The Borrower may, from time to time by written request to the
Lenders, the Managing Agents and the Administrative Agent (each such notice
being an "Extension Request") given not later than 60 days and not sooner than
75 days prior to each Annual Extension Date, request an extension of the then
applicable Annual Extension Date. If the Lenders, the Managing Agents and the
Administrative Agent consent, in their sole discretion, to such Extension
Request, then (x) the Termination Date shall not occur as of the then applicable
Annual Extension Date, and (y) the Annual Extension Date shall be extended as
described in the definition of "Annual Extension Date." With respect to any
Group Bank, if the related Managing Agent, in its capacity as a Bank, declines
to consent to an Extension Request, then the other Lenders in such Group Bank
shall be deemed to have declined to consent to such Extension Request, unless a
new Managing Agent is selected and approved by both the Borrower and the
Administrative Agent (which approval shall not be unreasonably withheld). If any
Lender declines to consent to an extension requested pursuant to this Section
2.1, but the other Lenders nevertheless desire to consent to the extension or
confirmation, then the extension shall be granted, and at the option of the
Managing Agent(s) of the extending Lenders, either (a) the Maximum Facility
Amount shall be reduced by the Bank Commitment
33
of such non-extending Lender on what would have been the then existing Annual
Extension Date but for the extension, or (b) the Managing Agent(s) of the
extending Lenders shall find a replacement for such non-extending Lender. If
Calyon and La Fayette decline to consent to the extension, but the other Lenders
nevertheless desire to consent to the extension, then the extension shall be
granted, and Calyon shall cease to be the Administrative Agent and one of the
Managing Agents selected by the Borrower shall become the Administrative Agent
hereunder. To the extent that any Lender declines to consent to the extension of
the Annual Extension Date, the Obligations of such non-extending Lender will be
repaid pursuant to Section 2.7(c)(iii) hereof and its Bank Commitment
permanently reduced to $0 as of the date of the then existing Annual Extension
Date. Any failure of any party to respond to the Borrower's request for an
extension within thirty (30) days of such request shall be deemed a denial of
such request by such party. Any such extension may be accompanied by such
additional fees as the parties shall mutually agree. Notwithstanding anything
else to the contrary herein, the Termination Date shall occur automatically
without further action on the part of the Lenders, the Managing Agents or the
Administrative Agent, on each Annual Extension Date unless an Extension Request
has been granted pursuant to this paragraph.
(c) The Borrower may, upon at least thirty (30) days prior
irrevocable notice to the Administrative Agent, but no more than once every
three months, reduce the Maximum Facility Amount; provided, however, that each
partial reduction shall be in the aggregate amount of $50,000,000 and in
integral multiples of $5,000,000 in excess thereof; provided further, however
that no such reduction shall reduce the Maximum Facility Amount below the
greater of (i) the total Principal Debt or (ii) $250,000,000. Any partial
reduction in the Maximum Facility Amount will reduce the Bank Commitment of each
Group Bank ratably.
(d) The Borrower may, upon at least thirty (30) days prior
irrevocable notice to the Administrative Agent, terminate the Maximum Facility
Amount in its entirety upon payment in full of all Obligations.
(e) If a Report of Visit shall not be made available on or before
March 22, 2006 to each Bank and ▇▇▇▇▇▇ in form, content and substance and
reaching conclusions satisfactory to such Bank in its sole and absolute
discretion, (it being understood that such Report of Visit shall be a new Report
of Visit and not the report dated August 5, 2005) such Bank and ▇▇▇▇▇▇ may, upon
30 days notice to the Borrower and the Administrative Agent, terminate its Bank
Commitment and, upon the expiration of such notice period, the Obligations owed
to such Bank (and/or the related Issuer) will be repaid pursuant to Section
2.7(c)(iii) hereof and the Bank Commitment of such Bank or ▇▇▇▇▇▇, as
applicable, shall be permanently reduced to $0 as of such date; provided,
however, that if a Managing Agent, in its capacity as a Bank, terminates its
Bank Commitment in accordance with the first proviso to this subclause (e), then
the other Lenders in the related Group Bank shall be deemed to have terminated
their Bank Commitments or Issuer Facility Amounts, as applicable, unless a new
Managing Agent is selected and approved by both the Borrower and the
Administrative Agent (which approval shall not be unreasonably withheld). Any
reduction in the Bank Commitment of a Bank shall reduce the related Issuer
Facility Amount by a corresponding amount.
(f) The Administrative Agent shall give each Managing Agent prompt
notice of each written notice received by it from the Borrower pursuant to this
Section 2.1.
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2.2. Promissory Notes.
The Advances made by each of the Lenders related to each Group pursuant to
this Article II shall be evidenced by separate Notes each substantially in the
form set forth in Exhibit E hereto, each in the maximum principal amount of such
Group's related Issuer Facility Amount or Bank Commitment, as applicable. Each
Managing Agent on behalf of the Lenders in its Group shall record in its records
the date and amount of each Advance to the Borrower and each repayment thereof.
The information so recorded shall be rebuttable presumptive evidence of the
accuracy thereof. The failure to so record, in the absence of manifest error,
any such information or any error in so recording any such information shall
not, however, limit or otherwise affect the obligations of the Borrower
hereunder or under the Notes to pay the principal of all Advances, together with
interest accruing thereon.
2.3. Notice and Manner of Obtaining Borrowings.
(a) Borrowings.
(i) The Borrower shall give the Administrative Agent and the
Collateral Agent notice of each request for a Borrowing, pursuant to a Borrowing
Report, and in accordance with the provisions of Section 4.1 and Section 4.2
hereof. The Administrative Agent shall promptly forward a copy of such Borrowing
Report to each Managing Agent. On the Borrowing Date specified in the Borrowing
Report and subject to all other terms and conditions of this Agreement, each
Issuer may, in its discretion (except that ▇▇▇▇▇▇ shall), make available to its
Managing Agent at the office of such Managing Agent set forth in Section 13.1,
in immediately available funds, its share of the Borrowing.
(ii) In the event that an Issuer (other than ▇▇▇▇▇▇) shall
elect not to fund a Borrowing requested by the Borrower, each related Group Bank
agrees that it shall, on the Borrowing Date specified in the Borrowing Report
and subject to all other terms and conditions of this Agreement, make available
to its Managing Agent at the office of the Managing Agent set forth in Section
13.1, in immediately available funds, an amount equal to the product of (x) such
Bank's Bank Commitment Percentage, multiplied by (y) the portion of such
Borrowing that such Issuer or Issuers have elected not to fund.
(iii) After each Managing Agent's receipt of funds pursuant to
the preceding paragraph (i) or (ii) and upon fulfillment of the applicable
conditions set forth in Article IV, each Managing Agent will make such funds as
requested by the Borrower in the related Borrowing Report available to the
Borrower in immediately available funds. So long as the Borrower is otherwise
entitled to make a specific Borrowing, Borrowing Reports that are received
timely in accordance with Section 4.2(a), on a Business Day will be funded on
the next Business Day following receipt of the Borrowing Report.
(iv) Notwithstanding the foregoing, a Bank shall not be
obligated to make Advances under this Section 2.3 at any time to the extent that
the principal amount of all Advances made by such Bank would exceed such Bank's
Bank Commitment less the outstanding and unpaid principal amount of any loans or
purchases made by such Bank under a Liquidity Agreement. In addition,
notwithstanding the foregoing, ▇▇▇▇▇▇ shall not be obligated
35
to make Advances under this Section 2.3 at any time to the extent that the
principal amount of all Advances made by ▇▇▇▇▇▇ would exceed ▇▇▇▇▇▇'▇ Issuer
Facility Amount less the outstanding and unpaid principal amount of any loans or
purchases made by the related Group Banks under the related Liquidity Agreement.
Each Bank's obligation shall be several, such that the failure of any Bank to
make available to the Borrower any funds in connection with any Borrowing shall
not relieve any other Bank of its obligation, if any, hereunder to make funds
available on the date of such Borrowing, but no Bank shall be responsible for
the failure of any other Bank to make funds available in connection with any
Borrowing. No Bank that is a member of one Group shall be obligated to make
funds available in respect of another Group of which it is not a member.
(b) Type of Loan.
(i) Each Advance by an Issuer shall initially be funded by the
issuance of commercial paper by such Issuer; provided that Advances made by
▇▇▇▇▇▇ may be initially funded by the issuance of Commercial Paper Notes or by
assigning such Advances to the related Group Bank.
(ii) Each Advance by a Bank shall be either a Base Rate
Advance or a Eurodollar Advance, as determined pursuant to Section 2.15(a).
(c) Wet Borrowings. The Borrower may from time to time request that
certain Borrowings be funded prior to the delivery to the Collateral Agent of
the corresponding Principal Mortgage Documents (individually, a "Wet Borrowing";
collectively, "Wet Borrowings"). Advances in respect of Wet Borrowings shall be
made in accordance with Section 2.3(a), subject to the terms and conditions of
this Agreement, including, without limitation, the following additional terms
and conditions:
(i) Pursuant to an Assignment, the Borrower shall grant to the
Administrative Agent for the benefit of the holders of the Obligations, from the
Borrowing Date of each Wet Borrowing, a perfected, first-priority security
interest in the Mortgage Loans identified in Schedule III to said Assignment
(such Mortgage Loans being sometimes called "Wet Loans," it being understood
that the term "Wet Loans" shall include Advanced Funds);
(ii) The Assignment in connection with the Borrowing Report
delivered by the Borrower to the Administrative Agent and the Collateral Agent,
pursuant to which the Borrower requests a Wet Borrowing, shall describe the
Mortgage Note or Mortgage Notes to be delivered to the Collateral Agent in
connection therewith by the loan number assigned by one of the Originators,
original principal amount, the amount funded (minus discount points paid to such
Originator) by one of the Originators, Obligor's name and interest rate;
(iii) Within nine (9) Business Days after the date of
origination of a Wet Loan, the Borrower shall deliver to the Collateral Agent
the Principal Mortgage Documents pertaining to such Wet Loan identified on
Schedule III of the related Assignment;
(iv) At any time, (A) except the first five and last five
Business Days of any month, the portion of total Collateral Value that may be
attributable to Wet Loans shall
36
not exceed thirty percent (30%) of the Maximum Facility Amount and (B) during
the first five and last five Business Days of any month, the portion of total
Collateral Value that may be attributable to Wet Loans shall not exceed fifty
percent (50%) of the Maximum Facility Amount (it being understood that on any
day the Collateral Value of a Wet Loan with respect to which the related
Principal Mortgage Documents have not been delivered to the Collateral Agent
within nine (9) Business Days after the date of origination of the applicable
Wet Loan shall be zero until such Principal Mortgage Documents are so
delivered);
(v) The Borrower shall not request any Wet Borrowing, and no
Wet Borrowing shall be made, in respect of any Mortgage Loan that is closed with
an escrow agent other than the relevant title insurance company, unless at the
time of such request, the Borrower is entitled to the benefit of Closing
Protection Rights with provisions required by the Administrative Agent (it being
understood that pursuant to the Security Agreement, the Administrative Agent has
a security interest in all Closing Protection Rights).
Each request by the Borrower for a Wet Borrowing shall be automatically deemed
to constitute a representation and warranty by the Borrower to the effect that
immediately before and after giving effect to such Borrowing, the terms and
conditions specified in the foregoing clauses (i) through (v) and specified in
Section 4.1 are and shall be satisfied in full as of the related Borrowing Date.
(d) Failure to Deliver Principal Mortgage Documents. The failure to
deliver Principal Mortgage Documents by the ninth Business Day, as required by
subparagraph (iii) of Section 2.3(c) and elsewhere in this Agreement, shall not
be treated as a Default or an Event of Default so long as the Administrative
Agent is satisfied that each such failure, when considered in the light of past
and other contemporaneous failures, does not have a Material Adverse Effect;
however, (i) if any such Principal Mortgage Documents related to such Wet Loans
are not so delivered by such ninth Business Day, the Borrower shall make a
mandatory prepayment so that after giving effect thereto, the Collateral Value
of Eligible Mortgage Collateral (excluding such Wet Loans) shall equal or exceed
the Principal Debt, and (ii) such Wet Loan shall not be an Eligible Mortgage
Loan and shall have a Collateral Value of zero until such Principal Mortgage
Documents shall have been delivered to the Collateral Agent in connection with a
subsequent Borrowing.
The Borrower diligently shall pursue delivery to the Collateral Agent of
all Principal Mortgage Documents pertaining to any Wet Borrowings.
2.4. Fees.
(a) The Borrower shall pay to the Administrative Agent and to each
Managing Agent (for itself and the Lenders for which it acts) the related fees,
costs and expenses set forth in the Amended and Restated Administrative Agent
Fee Letter and the Managing Agents Fee Letter, as applicable, such fees, costs
and expenses to be payable at such times and in such amounts as shall be
specified thereunder.
(b) The Borrower shall pay to the Servicer a fee (the "Servicer
Fee") of 0.5% per annum (the "Servicer Fee Rate") on the aggregate outstanding
principal balance of
37
the Eligible Mortgage Loans from the date hereof until the Principal Debt is
indefeasibly paid in full, payable monthly in arrears on each Settlement Date.
The Servicer Fee shall be payable only from Collections pursuant to, and subject
to the priority of payments set forth in, Section 2.7(c).
2.5. Prepayments.
(a) Optional Prepayments. The Borrower may, at any time and from
time to time with five (5) Business Days' notice to the Administrative Agent,
prepay the Advances in whole or in part, in the aggregate amount of $5,000,000
or integral multiples of $500,000 in excess thereof, without premium or penalty
other than Consequential Loss, if any. The Administrative Agent shall give each
Managing Agent prompt notice of any such notice. Notwithstanding the foregoing,
any prepayment made hereunder shall be accompanied by accrued interest on the
principal amount being prepaid. After giving notice that a prepayment will be
made, the Borrower shall be liable to each Affected Party for any Consequential
Loss resulting from such prepayment (including prepayments of Advances bearing
interest at the Commercial Paper Rate or Eurodollar Rate on a day other than the
last day of the related Interest Period) or the failure to make a prepayment
(with accrued and unpaid interest thereon) designated in any such notice.
(b) Mandatory Prepayments. The Borrower shall immediately and in any
event within one Business Day of written demand by the Administrative Agent or
any Managing Agent make a mandatory prepayment if at any time, and to the extent
that, (i) the Principal Debt exceeds the Maximum Facility Amount or (ii) the
Principal Debt exceeds the total Collateral Value of all Eligible Mortgage
Collateral. The Borrower shall be liable for any Consequential Loss resulting
from any such prepayment.
2.6. Business Days.
If the date for any payment under this Agreement falls on a day that is
not a Business Day, then for all purposes of the Notes and this Agreement the
same shall be deemed to have fallen on either (a) the next following Business
Day, and such extension of time shall in such case be included in the
computation of payments of interest and fees or (b) if the next following
Business Day is in another calendar month and payment is being made with respect
to a Eurodollar Advance, then on the immediately previous Business Day.
2.7. Payment Procedures.
(a) In General. Subject to the provisions of this Section 2.7, all
payments on the Principal Debt and interest and fees, costs and expenses under
the Notes and this Agreement shall be made by the Borrower (or the Collateral
Agent or the Servicer on behalf of the Borrower) to the Administrative Agent for
the account of the Lenders. All such payments shall be made before 11:00 a.m.
(eastern time) on the respective due dates in federal or other funds immediately
available by that time of day and at the Administrative Agent's Account. Funds
received after 11:00 a.m. (eastern time) shall be treated for all purposes as
having been received by the Administrative Agent on the Business Day next
following the date of receipt of such funds from the Borrower. Upon receipt of
funds deposited into the Administrative
38
Agent's Account, the Administrative Agent shall distribute such funds to the
related Managing Agent for the account of the Lenders represented by such
Managing Agent. All payments made by the Borrower under this Agreement and the
Notes shall be without set off, deduction or counterclaim and the Borrower
agrees to pay on demand any present or future stamp or documentary taxes or any
other taxes, levies, imposts, duties, charges or fees which arise from payment
made hereunder or under the Notes or from the execution or delivery or otherwise
with respect to this Agreement or the Notes.
(b) The Borrower shall establish and maintain an account (the
"Collection Account") with the Collection Account Bank. The Collection Account
shall be a fully segregated trust account, unless the Collection Account Bank
shall be an Eligible Institution, in which case the account need not be a trust
account. The Collection Account shall be under the control of the Administrative
Agent pursuant to the Collection Account Control Agreement, and the Borrower
shall have no right to withdraw any amount from the Collection Account until the
Obligations are indefeasibly paid in full. The Servicer shall have no right to
access the Collection Account except as otherwise contemplated in Section
2.7(c).
(c) Collections.
(i) The Servicer shall administer Collections in accordance
with the provisions of this Section 2.7. Approved Take-Out Investors shall be
instructed to pay proceeds from the sale of Mortgage Loans into the Collection
Account, and such amounts may be released only in accordance with the procedures
set forth in Section 3.3 hereof.
(ii) The Servicer shall hold, on behalf of the Lenders and the
Administrative Agent, from Collections received by it with respect to any
Mortgage Asset, amounts necessary to make payments on the following Settlement
Date (or end of the related Interest Period) pursuant to Section 2.7(c)(iii) or
(iv), as applicable. Such amounts shall be deposited into the Collection Account
no later than such Settlement Date or at the end of such Interest Period, or, on
or after the Termination Date or upon the occurrence and during the continuation
of an Event of Default, within one Business Day after receipt before 11:00 a.m.
(eastern time) by the Servicer.
(iii) Prior to the Termination Date, the Servicer shall
withdraw funds from the Collection Account (to the extent of collected funds
therein) and shall make payments from the Collection Account at the following
times and in the following order of priority:
(A) To the extent not previously paid, on each
Settlement Date, the Servicer shall deposit an amount equal to the
costs, fees and expenses then due and payable to the Collateral
Agent to an account designated by the Collateral Agent.
(B) On each Settlement Date, the Servicer shall deposit
an amount equal to interest on each Advance accrued during the most
recently ended Interest Period (or earlier Interest Periods, to the
extent unpaid) to the Administrative Agent's Account, and the
Administrative Agent shall forward such funds to the applicable
Managing Agent's Account for the related Lenders.
39
(C) To the extent not previously paid, on each
Settlement Date, the Servicer shall deposit an amount equal to the
fees, costs and expenses then due and payable pursuant to the Fee
Letters, to the Administrative Agent's Account, and the
Administrative Agent shall forward such funds, on a pro rata basis
in proportion to the outstanding fees, costs and expenses owed to
each Group Bank, to (a) ABN AMRO, as a Managing Agent, to ABN AMRO's
Managing Agent Account, (b) Calyon, as a Managing Agent, to Calyon's
Managing Agent Account, (c) JPMorgan, as a Managing Agent, to
JPMorgan's Managing Agent Account, (d) SG, as a Managing Agent, to
SG's Managing Agent Account, and (e) the Administrative Agent, to
the Administrative Agent's Account.
(D) On each Settlement Date on which the Required
Reserve Account Amount exceeds the amount then on deposit in the
Reserve Account, the Servicer shall deposit an amount equal to such
excess to the Reserve Account.
(E) On each Settlement Date, if either (x) any Lender
has not consented to an extension of the Annual Extension Date, but
the other Lenders have so consented and such non-extending Lender
has not assigned its respective Advances and Bank Commitments to one
or more other Lenders in accordance with Section 2.1(b) and Section
13.9, or (y) any Lender has terminated its Bank Commitment as
permitted under Section 2.1(e), but other Lenders have not so
terminated their Bank Commitments and the terminating Lender has not
assigned its respective Advances and Bank Commitments to one or more
other Lenders in accordance with Section 13.9, or (z) the Borrower
has provided prior written notice to the Administrative Agent that
the Borrower is seeking a Replacement Bank for the Affected Party
pursuant to Section 2.20, (in either the case of clause (x) or (y)
or (z) above, the non-extending Lender, the terminating Lender, or
the Affected Party, respectively, are referred to as the
"Non-Continuing Lenders" for purposes of this subparagraph
2.7(c)(iii)(E)), until the entire unpaid balance of all Obligations
owing to the Non-Continuing Lenders are paid, the Servicer shall
deposit into the Administrative Agent's Account, and the
Administrative Agent shall forward to relevant Managing Agent's
Account an amount, to the extent available from Collections, equal
to that portion of the amount of Collections remaining after the
payment of the items specified in Sections 2.7(c)(iii)(A) through
(D), multiplied by a fraction, the numerator of which is the Bank
Commitments of Banks or ▇▇▇▇▇▇, as applicable, that are the
Non-Continuing Lenders and the denominator of which is the total
Bank Commitments of all Banks (such fraction shall be calculated by
using the Bank Commitments in effect on the day prior to the
reduction of the Bank Commitments to zero for the Banks that are
among the Non-Continuing Lenders).
(F) To the extent not previously paid, on each
Settlement Date, the Servicer shall deposit any amounts, other than
those listed in clauses (A), (B) and (C) above and other than
principal on the Advances, that are then
40
due and payable and of which the Servicer has received prior written
notice, including without limitation additional costs under Section
2.16, any additional interest under Section 2.17, Consequential
Losses under Section 2.18, indemnities under Section 10.1 and costs,
expenses and taxes under Section 13.19, to the Administrative
Agent's Account, and the Administrative Agent shall forward to
relevant applicable Managing Agent's Account.
(G) If requested by the Borrower, the Servicer (1)
shall remit the amount of any principal prepayment to be made
hereunder to the applicable Managing Agent's Account, and (2) to the
extent not required to make payments pursuant to clauses (A) through
(F) on any Settlement Date or at the end of any Interest Period
occurring within 30 days after the Borrower's request, to an account
designated by the Borrower to pay for the purchase of Mortgage
Assets by the Borrower.
(H) On each Settlement Date, the Servicer shall retain
for its own account an amount equal to accrued Servicer Fee then due
and payable.
(iv) On the Termination Date and thereafter, the
Administrative Agent shall make payments from the Collection Account (to the
extent of collected funds therein) at the following times and in the following
order of priority:
(A) On each Settlement Date, if the Servicer is not one
of the Originators or an Affiliate of one of the Originators, an
amount equal to accrued Servicer Fee then due and payable shall be
paid to the Servicer.
(B) On each Settlement Date, an amount equal to accrued
interest on each Advance accrued during the most recently ended
Interest Period (or earlier Interest Periods, to the extent unpaid)
to the applicable Managing Agent's Account.
(C) [Reserved].
(D) To the extent not previously paid, on each
Settlement Date, an amount equal to the costs, fees and expenses
then due and payable to the Collateral Agent shall be paid to an
account designated by the Collateral Agent.
(E) On each Settlement Date, an amount equal to the
unpaid principal balance of all Advances made by Lenders, or such
lesser amount as is available from Collections, shall be paid to the
applicable Managing Agent's Account.
(F) To the extent not previously paid, on each
Settlement Date, an amount equal to the fees, costs and expenses
then due and payable pursuant to the Fee Letters, on a pro rata
basis in proportion to the fees, costs and expenses then owing to
each Group Bank, to (a) ABN AMRO, as a Managing Agent, to ABN AMRO's
Managing Agent Account, (b) Calyon, as a
41
Managing Agent, to Calyon's Managing Agent Account, (c) JPMorgan, as
a Managing Agent, to JPMorgan's Managing Agent Account, (d) SG, as a
Managing Agent, to SG's Managing Agent Account, and (e) the
Administrative Agent, to Calyon's Managing Agent Account.
(G) To the extent not previously paid, on each
Settlement Date, any amounts of the type described in Section
2.7(c)(iii)(F) are then due and payable and any other unpaid
Obligations shall be paid to the applicable Managing Agent's
Account.
(H) On the Settlement Date on which all Obligations are
paid in full, if the Servicer is one of the Originators or an
Affiliate of one of the Originators, an amount equal to accrued
Servicer Fee then due and payable shall be paid to the Servicer.
(v) Upon receipt of funds deposited into its Managing Agent's
Account, each Managing Agent shall distribute such funds to the Lenders in its
Group or to itself for application to the Obligations in accordance with the
order of priority set forth in Section 2.7(c)(iii) or (iv), as applicable.
(vi) On the Termination Date and thereafter, the Issuers shall
use commercially reasonable efforts to coordinate Interest Periods for advances
so that Consequential Losses and other expenses charged to Borrower are
mitigated.
(d) Interest Payments. Interest on each Advance shall be due and
payable in arrears on each Settlement Date, on the Termination Date, and, after
the Termination Date, on demand.
(e) Payments from Collection Account. To effect payments (including
prepayments) hereunder, the Borrower may use the collected funds (if any) then
held on deposit in the Collection Account.
2.8. The Reserve Account.
(a) Establishment. An account (the "Reserve Account") shall be
established with the Reserve Account Bank. The Borrower, the Servicer, the
Administrative Agent and the Reserve Account Bank have entered into the Reserve
Account Control Agreement. The Reserve Account is and shall be under the control
of the Administrative Agent, and the Borrower has and shall have no right to
withdraw any amount from the Reserve Account until the Obligations are
indefeasibly paid in full.
(b) Taxation. The taxpayer identification number associated with the
Reserve Account shall be that of the Borrower, and the Borrower will report for
federal, state and local income tax purposes the income, if any, earned on funds
in the Reserve Account.
(c) New Reserve Account. The Reserve Account Bank shall be an
Eligible Institution. In the event the Reserve Account Bank ceases to be an
Eligible Institution, the Borrower shall, within ten days after learning
thereof, establish a new Reserve Account (and
42
transfer any balance and investments then in the Reserve Account to such new
Reserve Account) at another Eligible Institution, which new Reserve Account
shall be subject to a replacement Reserve Account Control Agreement.
(d) Statements for Reserve Account. On a monthly basis, the Servicer
shall cause the Reserve Account Bank to provide the Servicer, the Borrower and
(upon request) the Administrative Agent with a written statement with respect to
the preceding calendar month regarding the Reserve Account in a form customary
for statements provided by the Reserve Account Bank for other accounts held by
it, which statement shall include, at a minimum, the amount on deposit in the
Reserve Account, and the dates and amounts of all deposits, withdrawals and
investment earnings with respect to the Reserve Account.
(e) Payments from Reserve Account.
(i) On the Business Day preceding the last day of each
Interest Period and each Settlement Date, the Servicer will determine whether
any Shortfall Amount will arise with respect to such Interest Period or
Settlement Date and will give the Administrative Agent notice of the amount
thereof by noon New York City time. By 2:00 p.m. New York City time on the
Business Day prior to the last day of each Interest Period and each Settlement
Date on which the amount of the Shortfall Amount is greater than zero, the
Servicer shall notify the Reserve Account Bank requesting payment thereof. To
the extent funds are available in the Reserve Account, the Servicer shall cause
the Reserve Account Bank to pay the amount requested to the Administrative
Agent's Account, as specified by the Administrative Agent, by 11:00 a.m. New
York City time on the last day of such Interest Period or on such Settlement
Date.
(ii) On each Settlement Date prior to the Termination Date on
which the funds on deposit in the Reserve Account exceed the Required Reserve
Account Amount (after giving effect to any payments pursuant to Section
2.8(e)(i)), the Servicer may withdraw and pay to the Borrower such excess from
the Reserve Account.
(f) Payments to Reserve Account. On the date hereof, the Borrower
shall remit to the Reserve Account immediately available funds so that the
amount on deposit in the Reserve Account equals the Required Reserve Account
Amount. Additional payments shall be deposited to the Reserve Account from time
to time pursuant to Section 2.7(c)(iii)(D).
(g) Pledge. To secure the payment and performance of the
Obligations, the Borrower hereby pledges and assigns to the Administrative Agent
for the benefit of the Lenders, and hereby grants to the Administrative Agent
for the benefit of the Lenders, a security interest in, all of the Borrower's
right, title and interest in and to the Reserve Account, including, without
limitation, all funds on deposit therein, all investments arising out of such
funds, all interest and any other income arising therefrom, all claims
thereunder or in connection therewith, and all cash, instruments, securities,
rights and other property at any time and from time to time received, receivable
or otherwise distributed in respect of such account, such funds or such
investments, and all money at any time in the possession or under the control
of, or in transit to such account, or any bailee, nominee, agent or custodian of
the Reserve Account Bank, and all proceeds and products of any of the foregoing.
Except as
43
provided in the preceding sentence, the Borrower may not assign, transfer or
otherwise convey its rights under this Agreement to receive any amounts from the
Reserve Account.
(h) Termination of Reserve Account. On the date following the
Termination Date on which all Obligations have been indefeasibly paid in full,
all funds then on deposit in the Reserve Account shall be paid to the Borrower
and the Reserve Account shall be closed.
2.9. Interest Allocations.
Each Managing Agent shall, from time to time and in its sole discretion,
determine whether an Advance shall be part of the "CP Allocation" or the "ABR
Allocation"; provided, however, that each Advance made by a Bank hereunder shall
be allocated to the ABR Allocation. Each Managing Agent shall provide the
Borrower with reasonably prompt notice of the allocations made by it pursuant to
this Section 2.9.
2.10. Interest Rates.
Except where specifically otherwise provided, Borrowings in respect of any
CP Allocation shall bear interest with respect to each Interest Period
comprising such CP Allocation at a rate per annum equal to the Commercial Paper
Rate applicable to such Interest Period, and Borrowings in respect of any ABR
Allocation shall bear interest at either the Eurodollar Rate plus the Bank
Margin, or the Alternate Base Rate; provided, however, that in no event shall
the rate of interest with respect to any Borrowings or portion thereof exceed
the Maximum Rate. Each change in the Alternate Base Rate and Maximum Rate,
subject to the terms of this Agreement, will become effective, without notice to
the Borrower or any other Person, upon the effective date of such change.
2.11. Quotation of Rates.
It is hereby acknowledged that an officer or other individual
appropriately designated by an officer previously identified to a Managing Agent
in a certificate of incumbency or other appropriately designated officer of the
Borrower may call such Managing Agent from time to time in order to receive an
indication of the rates then in effect, but such indicated rates shall neither
be binding upon such Managing Agent nor the Lenders nor affect the rate of
interest which thereafter is actually in effect.
2.12. Default Rate.
So long as any Event of Default exists, all Obligations shall bear
interest at the Default Rate until paid, regardless of whether such payment is
made before or after entry of a judgment. For the avoidance of doubt, once such
Event of Default is cured all Obligations shall bear interest in accordance with
Section 2.10.
2.13. Interest Recapture.
If the designated rate applicable to any Borrowing exceeds the Maximum
Rate, the rate of interest on such Borrowing shall be limited to the Maximum
Rate, but any subsequent reductions in such designated rate shall not reduce the
rate of interest thereon below the
44
Maximum Rate until the total amount of interest accrued thereon equals the
amount of interest that would have accrued thereon if such designated rate had
at all times been in effect. If at maturity (stated or by acceleration), or at
final payment of the Notes, the total amount of interest paid or accrued is less
than the amount of interest that would have accrued if such designated rates had
at all times been in effect, then, at such time and to the extent permitted by
applicable Governmental Requirements, the Borrower shall pay an amount equal to
the difference between (a) the lesser of the amount of interest that would have
accrued if such designated rates had at all times been in effect and the amount
of interest that would have accrued if the Maximum Rate had at all times been in
effect, and (b) the amount of interest actually paid or accrued on the Notes.
2.14. Interest Calculations.
All computations of interest and any other fees, costs and expenses
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) elapsed; provided,
however, that any calculations of interest based on the rate set forth in clause
(a) of the definition of Alternate Base Rate shall be made on the basis of a
year of 365/366 days for the actual number of days (including the first day but
excluding the last day) elapsed. All such determinations and calculations by the
Administrative Agent and the Managing Agents shall be conclusive and binding
absent manifest error.
2.15. Interest Period.
(a) "Interest Period" means, (i) with respect to any Advance
included in the CP Allocation that is "tranche funded," each period (x)
commencing on, and including, the date that such Advance was initially
designated by the related Managing Agent as comprising a part of the CP
Allocation hereunder, or the last day of the immediately preceding Interest
Period for such Advance (whichever is latest); and (y) ending on, but excluding,
the date that falls such number of days (not to exceed 30 days) thereafter as
such Managing Agent shall select, (ii) with respect to any Advance included in
the CP Allocation that is "pool funded," with respect to each Settlement Date,
the most recently ended Collection Period, (iii) with respect to any Eurodollar
Advance, a period of one month, beginning on a Business Day selected by the
related Managing Agent and ending on the day in the succeeding calendar month
which corresponds numerically to the beginning day of such period; provided that
if there is no such corresponding day, such Interest Period shall end on the
last Business Day in such succeeding month, and provided further that if such
Interest Period would otherwise end on a day that is not a Business Day, and
there is no subsequent Business Day in the same calendar month as such day, such
Interest Period shall end on the immediately preceding Business Day, and (iv)
with respect to any other Advance, a period beginning and ending on the days
selected by the related Managing Agent, such period not to exceed thirty days.
(b) Each Advance included in the ABR Allocation shall be a
Eurodollar Advance, unless,
(i) on or prior to the first day of such Interest Period the
Lender with respect to such Advance shall have notified the Administrative Agent
that the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central
45
bank or other governmental authority asserts that it is unlawful, for such
Lender to fund such Advance at the Eurodollar Rate (and such Lender shall not
have subsequently notified the Administrative Agent and the Managing Agent that
such circumstances no longer exist), or
(ii) the Borrower shall have requested a Base Rate Advance or
an Interest Period shorter than one month, or
(iii) the Administrative Agent and the Managing Agents do not
receive notice, by 12:00 noon (New York City time) on the third Business Day
preceding the first day of such Interest Period, that the related Advance will
not be funded by issuance of commercial paper, or
(iv) the principal amount of such Advance is less than
$2,500,000, or
(v) an Event of Default shall have occurred and be continuing,
or
(vi) the Eurodollar Rate determined pursuant hereto does not
accurately reflect the cost of funds to the Issuer or the Banks (as conclusively
determined by the Administrative Agent and the Managing Agents) during such
Interest Period, or
(vii) adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for the relevant Interest Period,
in which case (if any of the foregoing events occurs) such Advance shall be a
Base Rate Advance.
(c) Notwithstanding any provision in this Agreement to the contrary,
(x) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day (provided, however, if
interest in respect of such Interest Period is computed by reference to the
Eurodollar Rate, and such Interest Period would otherwise end on a day that is
not a Business Day, and there is no subsequent Business Day in the same calendar
month as such day, such Interest Period shall end on the immediately preceding
Business Day); (y) any Interest Period that commences before the Termination
Date and would otherwise end after the Termination Date shall end on the
Termination Date; and (z) the duration of each Interest Period that commences on
or after the Termination Date shall be of such duration as shall be selected by
the applicable Managing Agent and communicated by notice to the Borrower.
2.16. Additional Costs.
(a) If any Affected Party determines in its reasonable discretion
that compliance with any law or regulation or any guideline or request, or any
change in such law, regulation, guideline or request, or any change in the
interpretation, administration or application thereof, from any central bank,
any governmental authority or any accounting board or authority (whether or not
having the force of law), which is responsible for the establishment or
interpretation of national or international accounting principles, in each case
whether foreign or domestic (whether or not having the force of law):
46
(i) affects or would affect the amount of capital required or
expected to be maintained by such Affected Party and such Affected Party
determines that the amount of such capital is increased by or based upon the
existence of any commitment to lend or maintain a loan against Mortgage Loan
Collateral hereunder or under any commitments to a Lender related to this
Agreement or to the funding thereof or any related liquidity facility or credit
enhancement facility (or any participation therein) and other commitments of the
same type related to this Agreement, or
(ii) increases the cost to or imposes a cost on (A) an
Affected Party funding or making or maintaining any Advances or any liquidity
loan to an Issuer or any commitment of such Affected Party with respect to any
of the foregoing, or (B) the Administrative Agent for continuing its, or the
Borrower's, relationship with the Lenders;
then, upon the Borrower's receipt of a certificate (with a copy to the
Administrative Agent) as to any additional amounts payable to such Affected
Party pursuant to this Section 2.16(a), which contains the calculation thereof
and an explanation therefor in reasonable detail (an "Additional Cost
Certificate"), delivered no later than 180 days after such circumstances first
arise, the Borrower shall pay to the Affected Party within 30 days of the
delivery of such Additional Cost Certificate, from time to time as specified by
such Affected Party, additional amounts sufficient to compensate such Affected
Party in the light of such circumstances, to the extent that such Affected Party
reasonably determines such increase in capital or increased costs to be
allocable to the existence of any of such commitments. Such Additional Cost
Certificate as to such amounts submitted to the Borrower and the Administrative
Agent by such Affected Party shall be conclusive and binding for all purposes,
absent manifest error.
(b) In the event that any change in any requirement of law or in the
interpretation by any governmental authority or application to an Affected Party
of a requirement of law or change thereto by the relevant governmental authority
after the date hereof or compliance by an Affected Party with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority after the date of this Agreement does or shall
impose, modify or hold applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, or deposits or other liabilities
in or for the account of, purchases, advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such Affected
Party which are not otherwise included in the determination of the Alternate
Base Rate or Eurodollar Rate (Reserve Adjusted) hereunder and the result of any
of the foregoing is to increase the cost to or impose a cost on such Affected
Party or to reduce any amount received or receivable by any Affected Party under
this Agreement, any Note, the Liquidity Agreement with respect thereto, the
Managing Agents Fee Letter or under the Amended and Restated Administrative
Agent Fee Letter, then, upon Borrower's receipt of an Additional Cost
Certificate from the Affected Party delivered no later than 180 days after such
circumstances first arise, the Borrower shall pay to the Administrative Agent
within 30 days of the delivery of such Additional Cost Certificate, any
additional amounts (without duplication of amounts referred to in Section
2.16(a)) necessary to compensate such Affected Party for such additional cost or
reduced amount. Such Additional Cost Certificate as to such additional cost or
reduced amount receivable submitted to the Borrower by the Affected Party shall
be conclusive and binding for all purposes, absent manifest error.
47
(c) For the avoidance of doubt, any interpretation of Accounting
Research Bulletin No. 51 by the Financial Accounting Standards Board or any
other change in national or international generally accepted principles of
accounting (whether foreign or domestic) that would require the consolidation of
some or all of the assets and liabilities of any Lender, including the assets
and liabilities which are the subject of this Agreement and/or other Transaction
Documents, with those of any Affected Party (other than such Lender), shall
constitute a change in the interpretation, administration or application of a
law, regulation, guideline or request subject to Section 2.16(a) and (b).
2.17. Additional Interest on Advances Bearing a Eurodollar Rate.
The Borrower shall pay to any Affected Party, so long as such Affected
Party shall be required under regulations of the Federal Reserve Board to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid principal
of each Advance or portion thereof made or funded (including fundings to an
Issuer for the purpose of maintaining an Advance) by such Affected Party during
each Interest Period in respect of which interest is computed by reference to
the Eurodollar Rate, for such Interest Period, at a rate per annum equal at all
times during such Interest Period to the remainder obtained by subtracting (i)
the Eurodollar Rate for such Interest Period from (ii) the rate obtained by
dividing such Eurodollar Rate referred to in clause (i) above by that percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage of such Affected
Party for such Interest Period, payable on each date on which interest is
payable on such Advance. Such additional interest shall be reasonably determined
by such Affected Party and notice thereof given to the Borrower (with a copy to
the Administrative Agent and the applicable Managing Agent) within 30 days after
any interest payment is made with respect to which such additional interest is
requested. Such notice shall be in the form of a certificate as to such
additional interest submitted to the Borrower and the Administrative Agent and
the applicable Managing Agent by such Affected Party shall contain a calculation
of such additional interest and an explanation thereof in reasonable detail. If
such certificate contains a calculation of such additional interest and a
reasonable explanation thereof, it shall be conclusive and binding for all
purposes, absent manifest error.
2.18. Consequential Loss.
The Borrower shall indemnify each Affected Party against, and shall pay to
the Administrative Agent for such Affected Party within ten (10) Business Days
after Borrower's receipt of the request therefor, any Consequential Loss of any
Affected Party. Such request by any Affected Party that Borrower pay any
Consequential Loss shall be in the form of a certificate setting forth the basis
for imposing such Consequential Loss and the calculation of such amount thereof,
which calculation shall be conclusive and binding absent manifest error and
shall be delivered to the Borrower, the Administrative Agent and the applicable
Managing Agent.
2.19. Taxes.
(a) All payments made by the Borrower under this Agreement and the
Notes shall be without setoff, deduction or counterclaim, and the Borrower
agrees to pay on demand
48
any present or future stamp or documentary taxes or any other taxes, levies,
imposts, duties, charges, fees or withholdings which arise from payment made
hereunder or under the Notes or from the execution or delivery or otherwise with
respect to this Agreement or the Notes but excluding franchise taxes and taxes
imposed on or measured by all or part of the gross or net income (but not
including any such tax in the nature of a withholding tax) of such Affected
Party by the jurisdiction under the laws of which such Affected Party is
organized or has its applicable lending office or any political subdivision of
any thereof (all such excluded taxes, levies, imposts, deductions, changes,
withholding and liabilities collectively or individually referred to herein as
"Excluded Taxes" and all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities collectively or individually referred to
herein as "Taxes"). If the Borrower shall be required to deduct any Taxes from
or in respect of any sum payable hereunder to any Affected Party: (i) the sum
payable shall be increased by the amount (an "additional amount") necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.19) such Affected Party shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) The Borrower agrees to pay to the relevant Governmental
Authority in accordance with applicable law all taxes, levies, imposts,
deductions, charges, assessments or fees of any kind (including but not limited
to any current or future stamp or documentary taxes or any other excise or
property taxes, charges, or similar levies, but excluding any Excluded Taxes)
imposed upon any Affected Party as a result of the transactions contemplated by
this Agreement or that arise from any payment made hereunder or from the
execution, delivery, or registration of or otherwise similarly with respect to,
this Agreement ("Other Taxes").
(c) Each Lender that is not a U.S. Person (each a "Non-U.S. Lender")
shall deliver to the Borrower: (i) two copies of either (A) United States
Internal Revenue Service Form W-8BEN (including any successor forms thereto) or
(B) United States Internal Revenue Service Form W-8ECI (including any successor
forms thereto), or (ii) in the case of a Non-U.S. Lender claiming an exemption
from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest," a Form W-8BEN (or any
subsequent versions thereof or successors thereto) and a certificate
representing that such Non-U.S. Lender is not a bank for purposes of Section
881(c) of the Code, in either case properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from U.S. federal withholding tax on
payments by each Borrower under this Agreement. Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a Lender hereunder. If
such Non-U.S. Lender changes its applicable lending office by designating a
different lending office (a "New Lending Office"), such forms shall be delivered
on or before the date of such change. In addition, each Non-U.S. Lender shall
deliver such forms promptly after (or, if reasonably practicable, prior to) the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Notwithstanding any other provision of this Section 2.19(c), a Non-U.S.
Lender shall not be required to deliver any form pursuant to this Section
2.19(c) that such Non-U.S. Lender is not legally able to deliver.
49
(d) Within 30 days after the Borrower pays any amount to any
Affected Party from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, the Borrower
shall deliver to the Administrative Agent for delivery to such Affected Party
evidence reasonably satisfactory to such Person of such deduction, withholding
or payment (as the case may be).
(e) If an Affected Party receives the benefit of a tax refund,
credit or other benefit which is attributable to any Taxes as to which such
Affected Party has been reimbursed by the Borrower, or with respect to which the
Borrower has paid an additional amount hereunder, such Affected Party shall
within 30 days after the date of such receipt pay over the amount of such refund
or credit (to the extent so attributable) to the Borrower, net of all reasonable
out-of-pocket third party expenses of such Affected Party related to claiming
such refund or credit; provided, however, that (i) such Affected Party, as the
case may be, acting in good faith will be the sole judge of the amount of any
such refund, credit or reduction and of the date on which such refund, credit or
reduction is received, (ii) such Affected Party, as the case may be, acting in
good faith shall have absolute discretion as to the order and manner in which it
employs or claims tax refunds, credits, reductions and allowances available to
it, (iii) the Borrower agrees to repay such Affected Party, as the case may be,
upon written request from such Affected Party the amount of such refund, credit
or reduction received by the Borrower, in the event and to the extent, such
Affected Party is required to repay such refund, credit or reduction to any
relevant Governmental Authority, and (iv) such Affected Party shall not be
required to make available its tax returns or any other information relating to
its taxes and the computation thereof.
(f) Nothing contained in this Section 2.19 shall require an Affected
Party to make available any of its tax returns (or any other information that it
deems to be confidential or proprietary).
2.20. Replacement Banks.
Upon the election of any Affected Party to request reimbursement by the
Borrower for increased costs under Sections 2.16 or 2.17 or for compensation in
respect of withholding taxes under Section 2.19, the Borrower may, upon prior
written notice to the Administrative Agent and such Affected Party, seek a
replacement Bank to whom such additional costs or taxes shall not apply and
which shall be reasonably satisfactory to the Administrative Agent (a
"Replacement Bank"); provided, however, that the Borrower may not seek a
replacement for a Managing Agent, in its capacity as a Bank, unless the Issuer
in the related Group and any other Bank, at such Bank's option, in such Group,
is also to be replaced as a party to this Agreement and all Obligations owing to
such Bank, the related Issuer and the related Managing Agent are to be repaid in
full as they become due pursuant to Section 2.7(c)(iii). Each Affected Party
agrees that, should it be identified for replacement pursuant to this Section
2.20, upon payment in full of all amounts due and owing to such Affected Party
hereunder and under the other Transaction Documents, it will promptly execute
and deliver all documents and instruments reasonably required by the Borrower to
assign such Affected Party's portion of the Borrowings to the applicable
Replacement Bank. Any such replacement shall not relieve the Borrower of its
obligation to reimburse the Affected Party for any such increased costs or taxes
incurred
50
through the effective date of such replacement. Pending designation of a
Replacement Bank (and the related Issuer and Managing Agent), the Borrower may,
at its option, instruct the Administrative Agent, in a written notice provided
to the Administrative Agent, with a copy provided to the Affected Party, that
all Advances subsequent to such notice be made only by the Group that does not
include such Affected Party. As of the date of such notice, the Maximum Facility
Amount shall be reduced by the amount of the Bank Commitments of the Banks in
the Group that includes the Affected Party.
2.21. LIBOR Determination Date.
On each LIBOR Determination Date, the Servicer shall determine LIBOR on
the basis of the rate for deposits in Dollars for a one-month period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on such date. If
such rate does not appear on Telerate Page 3750, the rate for that LIBOR
Determination Date will be determined on the basis of the rates at which
deposits in United States dollars are offered by the Reference Banks at
approximately 11:00 a.m., London time, on that day to prime banks in the London
interbank market for a one-month period. If on such LIBOR Determination Date two
or more Reference Banks provide such offered quotations, LIBOR for such related
Interest Period will be the arithmetic mean of such offered quotations (rounded
upwards if necessary to the nearest whole multiple of 0.0001%). If on such LIBOR
Determination Date fewer than two Reference Banks provide such offered
quotations, LIBOR for the related Interest Period will be the arithmetic mean
(rounded upwards if necessary to the nearest whole multiple of 0.0001%) of the
one-month Dollar lending rates that three New York City banks selected by the
Servicer are quoting at approximately 11:00 a.m. (New York City time) on the
relevant LIBOR Determination Date to leading European banks.
ARTICLE III
COLLATERAL
3.1. Collateral.
To secure the payment of the Obligations, the Borrower has executed and
delivered to the Administrative Agent and the Collateral Agent, as applicable:
(a) the Security Agreement,
(b) the Collection Account Control Agreement, and
(c) the Reserve Account Control Agreement;
all as more fully provided for in the Collateral Agency Agreement. The Borrower
further agrees to execute all documents and instruments, and perform all other
acts deemed necessary by the Administrative Agent or any Managing Agent to
create and perfect, and maintain the security interests and collateral
assignments in favor of the Administrative Agent for the benefit of the holders
of the Obligations, as perfected first priority security interests. Any security
interest or collateral assignments granted to the Administrative Agent under any
Transaction
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Document is for the benefit of the holders of the Obligations, whether or not
reference is made to such holders.
3.2. Delivery of Collateral to Collateral Agent.
(a) Periodically, the Borrower may deliver Mortgage Loan Collateral
to the Collateral Agent to hold as bailee for the Administrative Agent. Each
delivery shall be made in association with an Assignment to the Administrative
Agent, for the benefit of the holders of the Obligations, in all Mortgage Loans
and related Collateral delivered with or described in such Assignment or any
schedules thereto. The Borrower shall use the form of Assignment provided for in
the Collateral Agency Agreement.
(b) Each Assignment delivered to the Collateral Agent shall be
accompanied by a completed Schedule I, Schedule II and Schedule III using the
forms of such schedules as prescribed in the Collateral Agency Agreement and,
with respect to each Mortgage Loan described in Schedule II to each Assignment,
shall deliver or cause to be delivered the following items (collectively, the
"Principal Mortgage Documents"):
(i) the original of each Mortgage Note, endorsed in blank
(without recourse) and all intervening endorsements thereto;
(ii) an original executed assignment in blank for each
Mortgage securing such Mortgage Loan, in recordable form, executed by the
Originator, in the case of each Mortgage Loan that is not a MERS Designated
Mortgage Loan, or by an authorized signatory of MERS, in the case of each MERS
Designated Mortgage Loan; and
(iii) a certified copy of the executed Mortgage related to
such Mortgage Note;
(c) The Servicer shall hold in trust for the Administrative Agent
for the benefit of the holders of the Obligations, with respect to each Mortgage
Loan included in the Collateral:
(i) the original filed Mortgage relating to such Mortgage
Loan, provided, however, that, until an original Mortgage is received from the
public official charged with its filing and recordation, a copy, certified by
the closing agent to be a true and correct copy of the original sent to be filed
and recorded, may be used by the Borrower to satisfy this requirement; however,
the Borrower shall thereafter pursue, with reasonable diligence, receipt of the
filed and recorded original Mortgage and, if received, shall deliver such
original to the Servicer;
(ii) other than with respect to a HUD repossessed Property
that is sold to a consumer, a mortgagee's policy of title insurance (or binding
unexpired commitment to issue such insurance if the policy has not yet been
delivered to the Servicer) insuring the Borrower's perfected, first-priority
Lien created by the Mortgage securing such Mortgage Loan (subject to such title
exceptions that are acceptable to prudent mortgage lenders) in a policy amount
not less than the principal amount of such Mortgage Loan;
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(iii) the original hazard insurance policy, appropriately
endorsed to provide that all insurance proceeds will be paid to any of the
Originators or any of the assigns of such Originator, referred to in Section
6.6(b) hereof which relate to such Mortgage Loan, or other evidence of insurance
acceptable to the Administrative Agent;
(iv) the form of current appraisal of the Property described
in the Mortgage, prepared by a state licensed appraiser, that complies with all
applicable Governmental Requirements, including all Governmental Requirements
that are applicable to the Lenders or any other Affected Party; provided,
however, that no appraisal shall be required for Mortgage Loans (x) financing
HUD repossessed Property that is sold to a consumer, financed with an FHA loan,
fully insurable and in accordance with FHA guidelines, but for which an
appraisal is not required, and (y) representing so called VA Rate Reduction or
FHA streamline refinances, insurable in accordance with VA and FHA guidelines,
but for which an appraisal is not required ; and
(v) all other original documents (collectively, the "Other
Mortgage Documents").
Upon request of the Administrative Agent or any Managing Agent, and three (3)
Business Days' prior notice by the Administrative Agent to the Collateral Agent,
the Servicer shall immediately deliver, or shall cause to be delivered, all such
items, held in trust, to the Collateral Agent as bailee for the Administrative
Agent or such other party as may be designated in such notice.
(d) The Servicer shall provide the Collateral Agent and the
Administrative Agent with full access to all Other Mortgage Documents held in
trust for the Administrative Agent at all times.
(e) With respect to each Assignment that is received by the
Collateral Agent, the Collateral Agent shall review such Assignment and make a
written report to the Borrower and the Administrative Agent, all as more fully
provided in the Collateral Agency Agreement.
3.3. Redemption of Mortgage Collateral.
(a) Generally. Subject to the limitations contained in this Section
3.3, in connection with a sale or other transfer contemplated by clause (a) or
(b), and so long as no Default or Event of Default is continuing, the Borrower
or the Servicer (on behalf of the Borrower) may request releases of the
Administrative Agent's security interest in all or any part of the Collateral
(including releases from the Collection Account and release of funds owned by
the Borrower and held in the Cash and Collateral Account) at any time, and from
time to time; provided that no such request shall be granted unless, in addition
to the satisfaction of the other conditions contained in this Section 3.3,
(i) (immediately after giving effect to any requested release)
the total Collateral Value of all Eligible Mortgage Collateral shall equal or
exceed the Principal Debt, or
53
(ii) (A) the Borrower makes a principal payment on account of
the Principal Debt in an amount, or (B) the Borrower delivers to the Collateral
Agent as bailee for the Administrative Agent substitute Eligible Mortgage
Collateral with a Collateral Value, such that after giving effect to such
payment or delivery, the total Collateral Value of all Eligible Mortgage
Collateral will equal or exceed the Principal Debt.
So long as no Default or Event of Default is continuing, the Servicer (on behalf
of the Borrower) may transfer funds from the Collection Account to the
Disbursement Account; provided, that the Servicer shall not request and the
Collateral Agent shall not permit funds to be released from the Disbursement
Account unless the total Collateral Value of all Eligible Mortgage Collateral
(immediately after giving effect to the requested release) equals or exceeds the
Principal Debt, as shown on the most recent Borrowing Report. Each request for a
partial release of Collateral (a "Transfer Request") shall be addressed to the
Collateral Agent and shall be substantially in the form provided in the
Collateral Agency Agreement (or such other form as may be reasonably acceptable
to or required by the Administrative Agent, from time to time).
(b) Redemption Pursuant to Sale. So long as no Default or Event of
Default is continuing, the Borrower or the Servicer (on behalf of the Borrower)
may (and, while a Default or Event of Default is continuing, upon direction of
the Administrative Agent, the Borrower shall) from time to time submit a
Shipping Request that would permit a sale of Mortgage Loan Collateral to, or the
pooling of Mortgage Loan Collateral for, an Approved Take-Out Investor, pursuant
to a Take-Out Commitment. Upon the receipt by the Collateral Agent of a Shipping
Request from the Borrower identifying Collateral to be delivered to an Approved
Take-Out Investor, and so long as (x) no Default or Event of Default shall be in
existence or would be caused thereby or, (y) if a Default or Event of Default is
in existence or would be caused thereby, the Administrative Agent has approved
the Shipping Request:
(i) The Collateral Agent shall deliver to the Approved
Take-Out Investor, or its loan servicing provider or custodian, under the
Collateral Agent's "Bailee and Security Agreement Letter" substantially in the
form provided for in the Collateral Agency Agreement, as appropriate, the items
of Mortgage Loan Collateral being sold that are held by the Collateral Agent as
bailee for the Administrative Agent pursuant to Section 3.2 hereof, with the
release of the security interest in favor of the Administrative Agent for the
benefit of the holders of the Obligations in such items being conditioned upon
timely payment to the Collection Account of the amount described in Section
3.3(b)(iii) or delivery of additional Eligible Mortgage Collateral;
(ii) The Servicer shall, as agent for the Administrative
Agent, deliver to such Approved Take-Out Investor, or such Approved Take-Out
Investor's loan servicing provider or custodian, pursuant to procedures provided
for in the Collateral Agency Agreement, the items held by the Servicer pursuant
to Section 3.2(c) that are related to the Mortgage Loan Collateral to be
transferred on the condition that such Approved Take-Out Investor or its loan
servicing provider or custodian shall hold or control such Other Mortgage
Documents as bailee for the Administrative Agent (for the benefit of the holders
of the Obligations) until the Approved Take-Out Investor has paid the full
purchase price for such Mortgage Loan Collateral to the Collection Account, as
required by the relevant Take-Out Commitment;
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(iii) Within forty-five (45) days after the delivery by the
Collateral Agent to such Approved Take-Out Investor or its loan servicing
provider or custodian of the items of Mortgage Loan Collateral described in
Section 3.3(b)(i) or (ii), the Borrower shall make a payment, or shall cause a
payment to be made, to the Collection Account, for distribution to the
Administrative Agent for the account of the Lenders in an amount equal to at
least the full purchase price for such Mortgage Loan Collateral or shall
substitute Eligible Mortgage Collateral as permitted by this Section 3.3; and
(iv) With respect to each Shipping Request that is received by
the Collateral Agent by 11:30 a.m. (eastern time) on a Business Day, the
Collateral Agent shall use due diligence and efforts to review such Shipping
Request and prepare the Mortgage Loan files identified in each Shipping Request,
for shipment prior to the close of business on such day.
(c) Transfers. So long as no Default or Event of Default is
continuing, the Borrower shall, at any time, be permitted to transfer Mortgage
Loans to any Permitted Transferees (as defined below) by means of its daily
electronic transmissions to the Collateral Agent, together with delivery of a
Transfer Request delivered to the Collateral Agent, identifying each Mortgage
Loan being transferred. The Collateral Agent's sole responsibility with respect
to any such transfers shall be to correctly reflect such transfers on its
computer system and books and records and to indicate, on its Collateral Agent's
Daily Report on the next Business Day, that such transfers have been effected.
"Permitted Transferees" means (i) the related Originator, in connection with any
sale and transfer thereto effected pursuant to the terms of the Repurchase
Agreement and (ii) any Approved Take-Out Investor. However, requested transfers
will not be made if (A) as reflected on the most recent Borrowing Report, total
Principal Debt will equal or exceed the total Collateral Value of Eligible
Mortgage Collateral immediately after giving effect to a requested transfer and
any accompanying substitution of Mortgage Collateral, or (B) the Collateral
Agent shall have received written notice from the Administrative Agent that a
Default or Event of Default has occurred.
(d) Continuation of Lien. Unless released in writing by the
Administrative Agent as herein provided, the security interest in favor of the
Administrative Agent for the benefit of the holders of the Obligations, in all
Mortgage Loan Collateral transmitted pursuant to Section 3.3(b) shall continue
in effect until such time as payment in full of the amount described in Section
3.3(b)(iii) shall have been received.
(e) Application of Proceeds; No Duty. Neither the Administrative
Agent nor the Lenders shall be under any duty at any time to credit Borrower for
any amount due from any Approved Take-Out Investor in respect of any purchase of
any Mortgage Collateral contemplated under Section 3.3(b) above, until such
amount has actually been received in immediately available funds and deposited
to the Collection Account. Neither the Collateral Agent, nor the Lenders, nor
the Administrative Agent shall be under any duty at any time to collect any
amounts or otherwise enforce any obligations due from any Approved Take-Out
Investor in respect of any such purchase.
(f) Mandatory Redemption of Mortgage Collateral. Notwithstanding any
provision herein to the contrary, if at any time a Collateral Deficiency exists,
the Borrower
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shall, as promptly as possible and in any event within one (1) Business Day,
make a payment to the Collection Account or pledge, assign and deliver
additional or substitute Eligible Mortgage Collateral to the Administrative
Agent for the benefit of the holders of the Obligations, so that, immediately
after giving effect to such payment or pledge and assignment, total Collateral
Value of Eligible Mortgage Collateral shall be equal or greater than the
Principal Debt.
(g) Representation in Connection with Releases, Sales and Transfers.
The Borrower represents and warrants that each request for any release or
transfer pursuant to Section 3.3(a) or Section 3.3(b) shall automatically
constitute a representation and warranty to the effect that immediately before
and after giving effect to such release or Transfer Request, the Collateral
Value of Eligible Mortgage Collateral shall equal or exceed the Principal Debt.
(h) Limitation on Releases. Notwithstanding any provision to the
contrary, the Collateral Agent shall not release any Collateral unless payment
of the purchase price by the Approved Take-Out Investor shall have been made in
immediately available funds to the Collection Account; provided, however, that
the foregoing shall not apply if immediately before and after giving effect
thereto, the total Collateral Value of Eligible Mortgage Collateral shall equal
or exceed the Principal Debt.
3.4. Releases of Mortgage Notes for Servicing.
The Servicer may from time to time request, in writing, that the
Collateral Agent deliver Mortgage Notes for correction or servicing actions
under the Collateral Agent's "Trust Receipt and Security Agreement Letter", in
the form provided for in the Collateral Agency Agreement, as and to the extent
permitted pursuant to Section 3.5 of the Collateral Agency Agreement.
3.5. Collateral Reporting.
Pursuant to the Collateral Agency Agreement, on each Business Day, and in
no event later than 10:30 a.m. (eastern time), the Collateral Agent shall
furnish to the Borrower and each Managing Agent by facsimile (a hard copy of
which shall not subsequently be mailed, sent or delivered to any Managing Agent,
unless so requested by such Managing Agent) a duly completed Collateral Agent
Daily Report in the form of Exhibit D-8 to the Collateral Agency Agreement.
3.6. Hedge Reporting.
The Servicer shall prepare a duly completed Hedge Report in the form of
Exhibit K on the close of business on the last Business Day of each week and
shall provide such Hedge Report to the Borrower and the Administrative Agent no
later than 10:00 a.m. (eastern time) on the following Business Day. Upon request
of any Lender, the Administrative Agent shall furnish or cause to be furnished
to such Lender a copy of the most recent Hedge Report received by the
Administrative Agent.
3.7. Servicer Monthly Reporting.
No later than the Settlement Date in each month, the Servicer shall
furnish the Borrower and the Administrative Agent and the Managing Agents (by
facsimile or electronic
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transmission (a hard copy of which shall not subsequently be mailed, sent or
delivered to the Administrative Agent and the Managing Agents, unless so
requested by the Administrative Agent and the Managing Agents) a report executed
by a Financial Officer of the Servicer or the Originator, in the form of Exhibit
F hereto ("Servicer Monthly Report") which shall provide as of the last day of
the previous month (i) a computation of the Delinquent Ratio, and delinquency of
Mortgage Loans serviced by the Servicer, (ii) delinquency of Mortgage Loans
owned by the Borrower that are financed by the Lenders and constitute Collateral
hereunder, (iii) LIBOR, and (iv) the other information provided for therein. If
such Servicer Monthly Report reflects a Conforming FICO Score Trigger Event, a
Conforming Loan-to-Value Ratio Trigger Event, a Non-Conforming FICO Score
Trigger Event or a Non-Conforming Loan-to-Value Ratio Trigger Event, the
Servicer shall so notify the Collateral Agent.
3.8. Approved Take-Out Investor Reporting.
No later than the Settlement Date in each month, the Borrower shall
furnish to the Administrative Agent (by facsimile or electronic transmission (a
hard copy of which shall not subsequently be mailed, sent or delivered to the
Administrative Agent, unless so requested by the Administrative Agent)) a report
which shall provide as of the last day of the previous month (i) a list of
Approved Take-Out Investors that committed to purchase one or more Mortgage
Loans from one of the Originators during such previous month and (ii) the
percentage of the Mortgage Loans each such Approved Take-Out Investor committed
to purchase either in the form of loan-specific Take-Out Commitments or ▇▇▇▇▇▇.
It is understood that some Mortgage Loans may have been sold by the Borrower to
the Originator and then financed pursuant to other warehouse facilities. This
will be reflected on the foregoing report. Upon request of any Lender, the
Administrative Agent shall provide or cause to be provided to such Lender a copy
of the most recent report received by it pursuant to this Section 3.8.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Borrowing under this Agreement.
The effectiveness of this Amended and Restated Loan Agreement and the
making of the initial Advance hereunder shall not occur until the satisfaction
of the conditions precedent specified in this Section 4.1 hereof and delivery to
the Administrative Agent of the following (each of the following documents being
duly executed and delivered and in form and substance reasonably satisfactory to
the Managing Agents, and, with the exception of the Notes, each in a sufficient
number of originals that each Managing Agent may have an executed original of
each document):
(a) an executed counterpart of this Agreement;
(b) the Notes issued to each Lender;
(c) a certificate of the Secretary or Assistant Secretary of each of
the Borrower, each Originator and each Performance Guarantor certifying as to
(i) resolutions of the Borrower's, each Originator's and each Performance
Guarantor's board of directors
57
authorizing the execution, delivery, and performance by each of them of the
Transaction Documents to which they are a party and identifying the officers of
the Borrower, the Originators and the Performance Guarantors who are authorized
to sign such Transaction Documents, (ii) specimen signatures of the officers so
authorized, (iii) the certificate of incorporation or formation, as applicable
and (iv) bylaws or resolutions or other similar governing documents, as
applicable;
(d) a favorable written opinion from counsel to the Borrower, the
Originators and the Performance Guarantors which counsel may be an employee of
such Person on entity matters and a favorable written opinion from counsel to
the Borrower, the Originators and the Performance Guarantors on enforceability
matters, each in a form reasonably acceptable to the Administrative Agent;
(e) a reliance letter from Hunton & ▇▇▇▇▇▇▇▇ LLP, permitting each
Lender not listed as an addressee to rely on such firm's opinion as to true sale
and non-consolidation matters, which opinion was delivered to the Administrative
Agent in 2003 together with opinions of Hunton & ▇▇▇▇▇▇▇▇ LLP, as to certain
bankruptcy, enforceability and security interest matters;
(f) a reliance letter from each of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, and ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, counsel to the Borrower and Originators,
permitting each Lender not listed as an addressee to rely on such firm's opinion
as to security interest matters, which opinions were delivered to the
Administrative Agent in 2003;
(g) a certificate from the Secretary of State for each state in
which the Borrower, each Originator and each Performance Guarantor is
incorporated or has a principal place of business, as to the good standing of
the Borrower and/or each of the Originators and each Performance Guarantor, as
applicable;
(h) executed counterparts of the Fee Letters;
(i) evidence of a deposit to the Reserve Account in the amount
needed to increase the balance therein to equal the Required Reserve Account
Amount;
(j) with respect to each Issuer, written confirmation from each
Rating Agency rating the Commercial Paper Notes of such Issuer that the Issuer's
execution of and performance under this Agreement will not result in a downgrade
or withdrawal of the ratings assigned to any of such Commercial Paper Notes; and
(k) such other documents as any Managing Agent may reasonably
request at any time at or prior to the Borrowing Date of the initial Borrowing
hereunder.
4.2. All Borrowings.
Each Advance (including, without limitation, the initial Advance) pursuant
to this Agreement is subject to the following further conditions precedent:
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(a) prior to 2:00 p.m. (eastern time) on the Business Day before the
designated Borrowing Date, the Borrower shall have provided to the
Administrative Agent and the Collateral Agent, a Borrowing Report (together with
any related Assignment) and prior to 4:00 p.m. (eastern time), the
Administrative Agent shall have provided a copy of such Borrowing Report to each
Managing Agent (it being understood that any such Borrowing Request shall
constitute a representation that after giving effect to the Advance and close of
business on such Borrowing Date, the Collateral Value of all Eligible Mortgage
Collateral shall equal or exceed the Principal Debt);
(b) all Collateral in which the Borrower has granted a security
interest to the Administrative Agent for the benefit of the holders of the
Obligations, with the exception of Wet Loans pursuant to Section 2.3(c), shall
have been physically delivered to the possession of the Collateral Agent in
accordance with Section 3.2;
(c) the representations and warranties of the Borrower, the
Originators and (so long as the Servicer and one of the Originators is the same
entity) the Servicer contained in this Agreement, any Assignment or Borrowing
Report, or any Security Instrument or other Transaction Document (other than
those representations and warranties that, by their express terms, are limited
to the effective date of the document or agreement in which they are initially
made) shall be true and correct in all material respects on and as of the date
of such Advance;
(d) no Default or Event of Default or Servicer Default shall have
occurred and be continuing, or would result from such Advance, and no change or
event that constitutes a Material Adverse Effect shall have occurred and be
continuing as of the date of such Advance;
(e) the Collection Account shall be established and in existence and
free from any Lien other than pursuant to the Collection Account Control
Agreement;
(f) delivery of a sufficient number of originals such that the
Administrative Agent may have an executed original thereof, of such other
documents and opinions of counsel, including such other documents as may be
necessary or desirable to perfect or maintain the priority of any Lien granted
or intended to be granted hereunder or otherwise and including favorable written
opinions of counsel with respect thereto, as the Administrative Agent may
reasonably request;
(g) the Termination Date shall not have occurred; and
(h) with respect to the initial Advance, all fees, costs and
expenses due on the Initial Funding Date shall have been paid, as provided in
the Fee Letters.
Each Borrowing Report shall be automatically deemed to constitute a
representation and warranty by the Borrower on the Borrowing Date set forth
therein to the effect that all of the conditions of Sections 4.1 and 4.2 are
satisfied as of such Borrowing Date.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations of the Borrower and the Servicer.
The Borrower and the Servicer each represents and warrants, as to itself,
to the Administrative Agent, the Managing Agents and the Lenders as follows:
(a) Organization and Good Standing. It (i) in the case of the
Borrower, is a limited liability company, and, in the case of the Servicer, is a
corporation, in each case duly organized and existing in good standing under the
laws of the jurisdiction of its organization, (ii) is duly qualified to do
business and in good standing in all jurisdictions in which its failure to be so
qualified could have a Material Adverse Effect, (iii) has the requisite entity
power and authority to own its properties and assets and to transact the
business in which it is engaged and is or will be qualified in those states
wherein it proposes to transact business in the future and (iv) is in compliance
with all Requirements of Law. American Home Mortgage Corp. is incorporated in
New York and in no other jurisdiction, and American Home Mortgage Servicing ,
Inc. is incorporated in Maryland and in no other jurisdiction. The Borrower is
organized in Delaware and no other jurisdiction.
(b) Authorization and Power. It has the requisite entity power and
authority to execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party; it is duly authorized to and has
taken all requisite entity action necessary to authorize it to, execute, deliver
and perform this Agreement and the other Transaction Documents to which it is a
party and is and will continue to be duly authorized to perform this Agreement
and such other Transaction Documents.
(c) No Conflicts or Consents. Neither the execution and delivery by
it of this Agreement or the other Transaction Documents to which it is a party,
nor the consummation of any of the transactions herein or therein contemplated,
nor compliance with the terms and provisions hereof or with the terms and
provisions thereof, will (i) contravene or conflict with any Requirement of Law
to which it is subject, or any indenture, mortgage, deed of trust, or other
agreement or instrument to which it is a party or by which it may be bound, or
to which its Property may be subject, or (ii) result in the creation or
imposition of any Lien, other than the Liens of the Security Instruments, on the
Property of the Borrower.
(d) Enforceable Obligations. This Agreement and the other
Transaction Documents to which it is a party have been duly and validly executed
by it and are its legal, valid and binding obligations, enforceable in
accordance with their respective terms, except as limited by Debtor Laws.
(e) Full Disclosure. There is no fact known to it that it has not
disclosed to the Administrative Agent and the Managing Agents that could
reasonably be expected to have a Material Adverse Effect. Neither its financial
statements nor any Borrowing Report, officer's certificate or statement
delivered by it to the Managing Agents in connection with this
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Agreement, contains any untrue or inaccurate statement of material fact or omits
to state a material fact necessary to make such information not misleading.
(f) No Default. It is not in default under any loan agreement,
mortgage, security agreement or other agreement or obligation to which it is a
party or by which any of its Property is bound, if such default would also be a
Default or an Event of Default (or, with notice or passage of time would become
a Default or Event of Default) under either of subparagraphs (e) or(i) of
Section 8.1 of this Agreement.
(g) Litigation.
(i) Except as set forth on Schedule III, there are no actions,
suits or proceedings, including arbitrations and administrative actions, at law
or in equity (other than, in the case of the Servicer, any actions, suits or
proceedings with damage claims of $1,000,000 or less), either by or before any
Governmental Authority, now pending or, to its knowledge, threatened by or
against it or any of its Subsidiaries, and pertaining to any Governmental
Requirement affecting its Property or rights or any of its Subsidiaries.
(ii) Neither it nor any of its Subsidiaries is in default with
respect to any Governmental Requirements.
(iii) The Servicer is not liable on any judgment, order or
decree (or any series of judgments, orders, or decrees) that could reasonably be
expected to have a Material Adverse Effect and that has not been paid, stayed or
dismissed within 60 days and the Borrower is not liable on any judgment, order
or decree (or any series of judgments, orders or decrees).
(h) Taxes. All tax returns required to be filed by it in any
jurisdiction have been filed, except where extensions of time to make those
filings have been granted by the appropriate taxing authorities and the
extensions have not expired, and all taxes, assessments, fees and other
governmental charges upon it or upon any of its properties, income or franchises
have been paid prior to the time that such taxes could give rise to a Lien
thereon, unless protested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been established on its
books. There is no tax assessment or to Borrower's and Servicer's best
knowledge, proposed tax assessment against it that could reasonably be expected
to have a Material Adverse Effect.
(i) Aggregate Collateral Value. AHMIC's ratio of its Aggregate
Collateral Value to its Adjusted Consolidated Funded Debt is not less than 1.00
to 1.00.
(j) Permits, Patents, Trademarks, Etc.
(i) It has all permits and licenses necessary for the
operation of its business.
(ii) It owns or possesses (or is licensed or otherwise has the
necessary right to use) all patents, trademarks, service marks, trade names and
copyrights, technology, know-how and processes, and all rights with respect to
the foregoing, which are
61
necessary for the operation of its business, without any conflict with the
rights of others. The consummation of the transactions contemplated hereby will
not alter or impair any of such rights of it.
(k) Status Under Certain Federal Statutes. It is not (i) a "holding
company", or a "subsidiary company" of a "holding company" or an "affiliate" of
a "holding company," or of a "subsidiary company" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended, (ii) a "public utility," as such term is defined in the Federal Power
Act, as amended, (iii) an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, or (iv) a "rail carrier," or a "person controlled by or affiliated
with a rail carrier," within the meaning of Title 49, U.S.C., and it is not a
"carrier" to which 49 U.S.C. ss. 11301(b)(1) is applicable.
(l) Securities Acts. It has not issued any unregistered securities
in violation of the registration requirements of the Securities Act of 1933, as
amended, or of any other Requirement of Law, and is not violating any rule,
regulation, or requirement under the Securities Act of 1933, as amended, or the
Securities and Exchange Act of 1934, as amended. The Borrower is not required to
qualify an indenture under the Trust Indenture Act of 1939, as amended, in
connection with its execution and delivery of the Notes.
(m) No Approvals Required. Other than consents and approvals
previously obtained and actions previously taken, neither the execution and
delivery of this Agreement and the other Transaction Documents to which it is a
party, nor the consummation of any of the transactions contemplated hereby or
thereby requires the consent or approval of, the giving of notice to, or the
registration, recording or filing by it of any document with, or the taking of
any other action in respect of, any Governmental Authority that has jurisdiction
over it or any of its Property.
(n) Environmental Matters. There have been no past, and there are no
pending or to Borrower's knowledge threatened, claims, complaints, notices, or
governmental inquiries against it regarding any alleged violation of, or
potential liability under, any environmental laws that could reasonably be
expected to have a Material Adverse Effect. It and its properties are in
substantial compliance in all respects with all environmental laws and related
licenses and permits, unless the failure to comply strictly in all respects with
all environmental laws and related licenses and permits could reasonably be
expected to have a Material Adverse Effect. No conditions exist at, on or under
any Property now or previously owned or leased by it that could give rise to
liability under any environmental law that could be expected to have a Material
Adverse Effect.
(o) Eligibility. The Servicer and each Originator are approved and
qualified and in good standing as a lender or seller/servicer, as follows:
(i) The Servicer and each Originator is a ▇▇▇▇▇▇ ▇▇▇ approved
seller/servicer and the Borrower is a ▇▇▇▇▇▇ Mae approved seller (in good
standing) of Mortgage Loans, eligible to originate, purchase, hold, sell and,
with respect to each Originator and the Servicer, service Mortgage Loans to be
sold to ▇▇▇▇▇▇ ▇▇▇.
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(ii) The Servicer and each Originator is a ▇▇▇▇▇▇▇ Mac
approved seller/servicer (in good standing) of Mortgage Loans, eligible to
originate, purchase, hold, sell and service Mortgage Loans to be sold to ▇▇▇▇▇▇▇
Mac.
(iii) The Servicer and each Originator is an approved FHA
servicer, VA servicer and ▇▇▇▇▇▇ Mae issuer (in good standing) of mortgage
loans, eligible to originate, purchase, hold, sell and service mortgage loans to
be pooled into ▇▇▇▇▇▇ ▇▇▇ mortgage-backed securities pools and to issue ▇▇▇▇▇▇
Mae mortgage-backed securities.
(iv) Each Mortgage Loan reported as an Eligible Mortgage Loan
is an Eligible Mortgage Loan.
5.2. Additional Representations of the Borrower.
The Borrower further represents and warrants to the Administrative Agent,
the Managing Agents and the Lenders as follows:
(a) Activities. The Borrower was formed on July 30, 2003, and the
Borrower did not engage in any business activities prior to the date of the
Original Loan Agreement. The Borrower has limited and will limit its activities
to those specified in the Limited Liability Company Agreement and has no
Subsidiaries.
(b) Solvency. Both prior to and after giving effect to each
Borrowing, (i) the fair value of the property of the Borrower is greater than
the total amount of liabilities, including contingent liabilities, of the
Borrower, (ii) the present fair salable value of the assets of the Borrower is
not less than the amount that will be required to pay all probable liabilities
of the Borrower on its debts as they become absolute and matured, (iii) the
Borrower does not intend to, and does not believe that it will, incur debts or
liabilities beyond the Borrower's abilities to pay such debts and liabilities as
they mature and (iv) the Borrower is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which the
Borrower's property would constitute unreasonably small capital.
(c) Purchase of Mortgage Loans. With respect to each Mortgage Loan,
the Borrower shall have purchased such Mortgage Loan from one of the Originators
in exchange for payment (made by the Borrower to the Originator in accordance
with the provisions of the Repurchase Agreement) of cash, the Deferred Purchase
Price (as such term is defined in the Repurchase Agreement), or a combination
thereof in an amount that constitutes fair consideration and reasonably
equivalent value. Each such sale referred to in the preceding sentence shall not
have been made for or on account of an antecedent debt owed by one of the
Originators to the Borrower and no such sale is or may be voidable or subject to
avoidance under any section of the Federal Bankruptcy Code.
(d) Priority of Debts and Liens. The Borrower has incurred no
Indebtedness except as expressly incurred hereunder and under the other
Transaction Documents. Upon delivery of an Assignment to the Collateral Agent,
the Administrative Agent will have a valid, enforceable, perfected and
first-priority Lien, for the benefit of the holders of the Obligations, in all
Mortgage Loan Collateral described in or delivered with such Assignment. Upon
delivery of funds for deposit in the Collection Account to the Collateral Agent,
the
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Administrative Agent will have a valid, enforceable, perfected and
first-priority Lien for the benefit of the holders of the Obligations, on the
Collection Account and related Collateral.
(e) No Liens. The Borrower has (or, as to all Mortgage Loan
Collateral delivered to the Collateral Agent after the date of this Agreement,
will have) good and indefeasible title to all Collateral, and the Mortgage Loan
Collateral and all proceeds thereof are (or, as to all Mortgage Loan Collateral
delivered to the Collateral Agent after the date of this Agreement, will be)
free and clear of all Liens and other adverse claims, other than (i) the right
of the related Originator to repurchase such Mortgage Loan Collateral pursuant
to the terms of the Repurchase Agreement and/or (ii) Liens in the Mortgage Loan
Collateral or proceeds in favor of the Administrative Agent for the benefit of
the holders of the Obligations.
(f) Financial Condition. The balance sheet of the Borrower as at
June 30, 2005, a copy of which has been furnished to the Managing Agents, fairly
presents the financial condition of the Borrower as at such date, in accordance
with GAAP, and since June 30, 2005, there has been no material adverse change in
the business, operations, property or financial condition of the Borrower.
(g) Principal Office, Etc. The principal office, chief executive
office and principal place of business of
(i) American Home Mortgage Corp. is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
(ii) American Home Mortgage Servicing, Inc. is at ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (executive offices), and its
principal place of business is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, and
(iii) The Borrower is at c/o American Home Mortgage Holdings,
Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(h) Ownership. American Home Mortgage Corp. is the owner of all of
the membership interests of the Borrower.
(i) UCC Financing Statements. No effective financing statement or
other instrument similar in effect covering any Mortgage Loan, any interest
therein, or the related Collateral with respect thereto is on file in any
recording office except such as may be filed (x) in favor of the Originators or
the Borrower in accordance with the Mortgage Loans, (y) in favor of the Borrower
in connection with the Repurchase Agreement, or (z) in favor of the
Administrative Agent or the holders of the Obligations in accordance with this
Agreement or in connection with a Lien arising solely as the result of any
action taken by the Lenders (or any assignee thereof) or by the Administrative
Agent.
(j) Trade Names. The Borrower is not known by and does not use any
trade name or doing-business-as name.
(k) Origination of Eligible Mortgage Loans.
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(i) Each Eligible Mortgage Loan was originated in compliance
with local, state and federal law applicable thereto at the time of origination,
including without limitation, required disclosures of points, charges and fees.
(ii) Each Eligible Mortgage Loan was originated using credit
policies in effect at the time such origination, which were designated to
provide guidelines in underwriting the creditworthiness of the Obligors and to
determine the Obligors' ability to repay the debt. In accordance with such
policies, each of the Originators considered, among other things, the credit
history of the Obligor and other credit indicators such as income verification
and/or debt-to-income ratios of the Obligor. No Mortgage Loan was originated
based solely on an estimation of the value of the mortgaged property without any
consideration of the potential ability of the Obligor to repay the amount owed
under the Mortgage Loan.
(iii) No Mortgage Loan violates any of the provisions of the
Home Ownership and Equity Protection Act of 1994 (14 U.S.C. ss. 1602(aa)) or
Regulation Z (12 C.F.R. 226.32).
(iv) No Obligor was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
Mortgage Loan. No Obligor obtained a prepaid single-premium credit life,
disability, accident or health policy in connection with the origination of the
Mortgage Loan.
(v) Each Mortgage Loan was originated in a manner designed to
be eligible for purchase by an Approved Take-Out Investor.
5.3. Additional Representations and Warranties of the Servicer.
The Servicer represents and warrants to the Administrative Agent, the
Managing Agents and the Lenders as follows:
(a) Financial Condition.
(i) The Servicer has delivered to the Administrative Agent (x)
copies of AHMIC's consolidated balance sheet, as of June 30, 2005, and the
related consolidated statements of income, stockholder's equity and cash flows
for the year ended on such date, audited by independent certified public
accountants of recognized national standing and (y) copies of each Performance
Guarantor's balance sheet, as of June 30, 2005, and the related consolidated
statements of income, and with respect to AHMIC only, stockholder's equity and
cash flows for the six months ended on such date, ("Interim Statements"); and
all such financial statements fairly present the financial condition of the
Servicer as of their respective dates, subject, in the case of the Interim
Statements, to normal year end adjustments and the results of operations of the
Servicer for the periods ended on such dates and have been prepared in
accordance with GAAP.
(ii) As of the date thereof, there are no obligations,
liabilities or Indebtedness (including contingent and indirect liabilities and
obligations or unusual forward or long-term commitments) of the Servicer
required to be recorded under GAAP that are not reflected therein.
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(iii) No change that constitutes a Material Adverse Effect has
occurred in the financial condition or business of the Servicer since June 30,
2005.
(b) Employee Benefit Plans. (i) No Employee Plan of the Servicer or
any ERISA Affiliate has incurred an "accumulated funding deficiency" (as defined
in Section 302 of ERISA or Section 412 of the Code), (ii) neither the Servicer
nor any ERISA Affiliate has incurred liability under ERISA to the PBGC, (iii)
neither the Servicer nor any ERISA Affiliate has partially or fully withdrawn
from participation in a Multiemployer Plan, (iv) no Employee Plan of the
Servicer or any ERISA Affiliate has been the subject of involuntary termination
proceedings, (v) neither the Servicer nor any ERISA Affiliate has engaged in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code), and (vi) no "reportable event" (as defined in Section 4043 of ERISA)
has occurred in connection with any Employee Plan of the Servicer or any ERISA
Affiliate other than events for which the notice requirement is waived under
applicable PBGC regulations.
(c) Ownership. On the date of this Agreement, AHMIC has beneficial
ownership, directly or indirectly, of 100% of the issued and outstanding shares
of each class of the stock of the Servicer and each Originator.
5.4. Survival of Representations.
All representations and warranties by the Borrower and the Servicer herein
shall survive delivery of the Notes and the making of the Advances, and any
investigation at any time made by or on behalf of the Administrative Agent or
the Lenders shall not diminish the right of the Administrative Agent, the
Managing Agents or the Lenders to rely thereon.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower and the Servicer shall each at all times comply with the
covenants applicable to it contained in this Article VI, from the date hereof
until the later of the Termination Date and the date all of the Obligations are
indefeasibly paid in full.
6.1. Financial Statements and Reports.
The Servicer, for so long as the Servicer is one of the Originators, and
thereafter the Borrower, shall furnish to the Managing Agents the following, all
in form and detail reasonably satisfactory to the Managing Agents:
(a) promptly after becoming available, and in any event within 120
days after the close of each fiscal year of AHMIC, such Person's audited
consolidated and consolidating balance sheet as of the end of such fiscal year,
and the related statements of income, stockholder's equity and cash flows of
such Person for such year showing within such consolidating balance sheets and
statements of income the balance sheet and statements of income for the
Originators accompanied by (i) the related report of independent certified
public accountants reasonably acceptable to the Managing Agents, which report
shall be to the effect that such statements have been prepared in accordance
with GAAP applied on a basis
66
consistent with prior periods except for such changes in such principles with
which the independent certified public accountants shall have concurred and (ii)
if issued, the auditor's letter or report to management customarily given in
connection with such audit;
(b) promptly after becoming available, and in any event within 60
days after the end of each fiscal quarter, excluding the fourth fiscal quarter,
of each fiscal year of AHMIC, the unaudited consolidated and consolidating
balance sheet of AHMIC as of the end of such fiscal quarter and the related
statements of income, stockholders' equity and cash flows of AHMIC for such
fiscal quarter and the period from the first day of the then current fiscal year
of the Performance Guarantors through the end of such fiscal quarter, showing
within such consolidating balance sheets and statements of income the balance
sheet and statements of income for the Originators certified by a Financial
Officer of the Servicer, to have been prepared in accordance with GAAP applied
on a basis consistent with prior periods, subject to normal year-end
adjustments;
(c) promptly upon receipt thereof, a copy of each other report
submitted to each of the Servicer, the Originators and the Performance
Guarantors by independent certified public accountants in connection with any
annual, interim or special audit of the books of such Person;
(d) promptly and in any event within twenty (20) days after the
request of the Administrative Agent or the Managing Agents at any time and from
time to time, a certificate, executed by a responsible officer of the Servicer
and the Originators, setting forth all of such Person's warehouse borrowings and
a description of the collateral related thereto;
(e) promptly and in any event within 60 days after the end of each
of the first three (3) quarters in each fiscal year of the Borrower, and within
120 days after the close of the Borrower's fiscal year, completed officer's
certificates in the from of H-1 and H-2 hereto, executed by the president or
chief financial officer of each of the Servicer and the Borrower, respectively;
(f) upon written request of the Administrative Agent (who shall so
request at the request of any Managing Agent), promptly and in any event within
60 days after the end of each quarter (120 days in the case of the fourth
quarter), a management report regarding the Originators' Mortgage Loan
production for the prior quarter and year-to-date, in form and detail as
reasonably required by the Administrative Agent;
(g) promptly furnish copies of all reports and notices with respect
to any "reportable event" defined in Title IV of ERISA that the Borrower, any of
the Originators or the Servicer files or that the Borrower, any of the
Originators or the Servicer is required to file under ERISA with the Internal
Revenue Service, the PBGC or the U.S. Department of Labor or that the Borrower,
any of the Originators or the Servicer receives from the PBGC;
(h) immediately after becoming aware of the expiration, forfeiture,
termination, or cancellation of, or default under, any Take-Out Commitment or
Hedge relating to any Collateral, telephone notice thereof confirmed in writing
within one Business Day, together with a statement as to what action the
Borrower proposes to take with respect thereto;
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provided that no such notice need be given if such Take-Out Commitment or Hedge
is replaced by another Take-Out Commitment or Hedge within one Business Day;
(i) promptly after becoming available, and in any event within 60
days after the end of each fiscal quarter, excluding the fourth fiscal quarter,
of each fiscal year of the Borrower, the unaudited balance sheet of the Borrower
as of the end of such fiscal quarter and the related statements of income,
stockholders' equity and cash flows of the Borrower for such fiscal quarter and
the period from the first day of such fiscal year through the end of such fiscal
quarter, certified by the chief financial officer of the Borrower, to have been
prepared in accordance with GAAP applied on a basis consistent with prior
periods, subject to normal year-end adjustments;
(j) promptly after the Borrower obtains knowledge thereof, notice of
any "Event of Default" or "Termination Date" under the Repurchase Agreement;
(k) promptly after receipt thereof, copies of all notices received
by the Borrower from any of the Originators under the Repurchase Agreement;
(l) promptly after the Servicer obtains knowledge thereof, notice of
any Servicer Default or of any condition or event that, with the giving of
notice or lapse of time or both and unless cured or waived, would constitute a
Servicer Default; and
(m) such other material information concerning the business,
properties or financial condition of the Borrower or any of the Originators as
the Administrative Agent or any Managing Agent may reasonably request.
6.2. Taxes and Other Liens.
The Borrower shall pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or upon any of
its Property as well as all claims of any kind (including claims for labor,
materials, supplies and rent) that, if unpaid, might become a Lien upon any or
all of its Property; provided, however, the Borrower shall not be required to
pay any such tax, assessment, charge, levy or claim if the amount, applicability
or validity thereof shall currently be contested in good faith by appropriate
proceedings diligently conducted by it or on its behalf and if it shall have set
up reserves therefor adequate under GAAP.
6.3. Maintenance.
The Borrower shall maintain its existence as a Delaware limited liability
company and shall comply with all Governmental Requirements. The Servicer shall
maintain its corporate existence.
6.4. Further Assurances.
The Borrower and the Servicer shall, each within three (3) Business Days
(or, in the case of Mortgage Notes, such longer period as provided under Section
3.4 of this Agreement) after the request of the Administrative Agent, cure any
defects in the execution and delivery of
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the Notes, this Agreement or any other Transaction Document. The Borrower and
the Servicer shall, each at its expense, promptly execute and deliver to the
Administrative Agent, upon the Administrative Agent's reasonable request, all
such other and further documents, agreements and instruments necessary to keep
the Borrower and the Servicer, as applicable, in compliance with the covenants
and agreements of the Borrower and the Servicer, respectively, in this Agreement
and in the other Transaction Documents or to further evidence and more fully
describe the collateral intended as security for the Notes, or to correct any
omissions in this Agreement or the other Transaction Documents, or more fully to
state the security for the obligations set out herein or in any of the other
Transaction Documents, or to perfect, protect or preserve any Liens created (or
intended to be created) pursuant to any of the other Transaction Documents, or
to make any recordings, to file any notices, or obtain any consents.
6.5. Compliance with Laws.
The Servicer shall comply with all applicable laws, rules, regulations and
orders in connection with servicing the Mortgage Assets.
6.6. Insurance.
(a) The Borrower and the Servicer shall each maintain with
financially sound and reputable insurers, insurance with respect to its
Properties and business against such liabilities, casualties, risks and
contingencies and in such types and amounts as is customary in the case of
Persons engaged in the same or similar businesses and similarly situated,
including, without limitation, a fidelity bond or bonds in form and with
coverage and with a company reasonably satisfactory to the Administrative Agent
and with respect to such individuals or groups of individuals as the
Administrative Agent may designate. Upon request of the Administrative Agent,
the Borrower and the Servicer shall each furnish or cause to be furnished to the
Administrative Agent from time to time a summary of the insurance coverage of
the Borrower and the Servicer, respectively, in form and substance reasonably
satisfactory to the Administrative Agent and if requested shall furnish the
Administrative Agent with copies of the applicable policies.
(b) With respect to Mortgages comprising the Collateral (i) the
Servicer, for as long as the Servicer is one of the Originators, and thereafter
the Borrower, shall cause the improvements on the land covered by each Mortgage
to be kept continuously insured at all times by responsible insurance companies
against fire and extended coverage hazards under policies, binders, letters, or
certificates of insurance, with a standard mortgagee clause in favor of the
original mortgagee and its successors and assigns or, in the case of a MERS
Designated Mortgage Loan, the beneficial owner of such mortgage loan, and (ii)
the Servicer, for so long as the Servicer is one of the Originators, and
thereafter the Borrower, shall cause each such policy to be in an amount equal
to the lesser of the maximum insurable value of the improvements or the original
principal amount of the Mortgage, without reduction by reason of any
co-insurance, reduced rate contribution, or similar clause of the policies or
binders.
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6.7. Accounts and Records.
The Borrower and, so long as the Servicer and one of the Originators are
the same entity, the Servicer shall each keep books of record and account in
which full, true and correct entries will be made of all material dealings or
transactions in relation to its business and activities, in accordance with
GAAP. The Borrower and the Servicer shall each maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate all records pertaining to the performance of the Borrower's
obligations under the Take-Out Commitments and ▇▇▇▇▇▇ and other agreements made
with reference to any Mortgage Loans in the event of the destruction of the
originals of such records) and keep and maintain all documents, books, records,
computer tapes and other information necessary or advisable for the performance
by the Borrower of its Obligations. The Borrower shall not enter the "loan
servicing" business.
6.8. Periodic Visits.
The Borrower, the Originators and, so long as the Servicer and one of the
Originators are the same entity, the Servicer shall permit any officer, employee
or agent of the Administrative Agent (including an independent certified public
accountant selected by the Administrative Agent) to visit (each such visit, a
"Periodic Visit") and inspect any of its Properties, examine its books of record
and accounts, documents (including without limitation computer tapes and disks),
telecopies and extracts from the foregoing, and discuss its affairs, finances
and accounts with its officers, accountants, and auditors, and to review the
business of originating the Mortgage Loans, the sale of the Mortgage Loans by
the Originators to the Borrower, and the servicing of the Mortgage Loans by the
Servicer, including the Servicer's collections systems, all during reasonable
business hours and as often as the Administrative Agent may desire and no more
than twice a year unless an Event of Default has occurred and is continuing. The
Borrower agrees to pay the reasonable costs of reviews and inspections performed
pursuant to this Section 6.8, including the costs and expenses charged by the
certified public accountant in preparing and delivering to the Administrative
Agent with respect to the certified public accountant's review on a scope and in
a form reasonably acceptable to the Administrative Agent and each Managing Agent
(such report, a "Report of Visit"). A Report of Visit shall be delivered no
later than sixty (60) days prior to each Annual Extension Date.
6.9. Notice of Certain Events.
The Borrower and, so long as the Servicer and one of the Originators are
the same entity (other than with respect to clause (g) hereof), the Servicer
shall each promptly notify the Administrative Agent in writing upon (a) the
receipt of any notice from, or the taking of any other material action by, the
holder of any of its promissory notes, debentures or other evidences of
Indebtedness with respect to a claimed default, together with a detailed
statement by a responsible officer of the Borrower or the Servicer, as the case
may be, specifying the notice given or other material action taken by such
holder and the nature of the claimed default and what action the Borrower or the
Servicer is taking or proposes to take with respect thereto, but only if such
alleged default or event of default (if it were true) would also be a Default or
Event of Default under this Agreement; (b) the commencement of, or any
determination in, any
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legal, judicial or regulatory proceedings that, if adversely determined, could
also be a Default or Event of Default under this Agreement; (c) any dispute
between the Borrower or the Servicer, as the case may be, and any Governmental
Authority or any other Person that, if adversely determined, could have a
Material Adverse Effect; (d) any change in the business or financial condition
of the Servicer, including, without limitation, the Servicer's insolvency, that
could reasonably be expected to have a Material Adverse Effect, or any adverse
change in the business or financial condition of the Borrower, including,
without limitation, the Borrower's insolvency; (e) any other event or condition
known to it that could reasonably be expected to have a Material Adverse Effect;
(f) the receipt of any notice from, or the taking of any other action by any
Approved Take-Out Investor indicating an intent not to honor, or claiming a
default under a Take-Out Commitment that could reasonably be expected to have a
Material Adverse Effect if such Take-Out Commitment is not replaced with another
Take-Out Commitment or Hedge, together with a detailed statement by a
responsible officer of the Borrower specifying the notice given or other action
taken by such Approved Take-Out Investor and the nature of the claimed default
and what action the Borrower is taking or proposes to take with respect thereto;
(g) the receipt of any notice from, and or the taking of any action by any
Governmental Authority indicating an intent to cancel the Borrower's or the
Servicer's right to be either a seller or servicer of such Governmental
Authority's insured or guaranteed Mortgage Loans; and (h) the receipt of any
notice of any final judgment or order for payment of money applicable to the
Servicer that could reasonably be expected to have a Material Adverse Effect, or
the receipt of any notice of any final judgment or order for payment of money
applicable to the Borrower. Upon receipt of any notice under this Section 6.9,
the Administration Agent shall provide a copy of such notice to each of the
Managing Agents.
6.10. Performance of Certain Obligations.
The Borrower and, so long as the Servicer and any of the Originators are
the same entity, the Servicer shall each perform and observe each of the
provisions of each Mortgage Loan, Take-Out Commitment and Hedge on its part to
be performed or observed and will cause all things to be done that are necessary
to have each Mortgage Loan covered by a Take-Out Commitment or Hedge comply with
the requirements of such Take-Out Commitment or Hedge.
6.11. Use of Proceeds; Margin Stock.
The proceeds of the Advances shall be used by the Borrower solely for the
acquisition of Mortgage Loans under the Repurchase Agreement. None of such
proceeds shall be used for the purpose of purchasing or carrying any "margin
stock" as defined in Regulation U, or for the purpose of reducing or retiring
any Indebtedness that was originally incurred to purchase or carry margin stock
or for any other purpose that might constitute this transaction a "purpose
credit" within the meaning of such Regulation U. Neither the Borrower nor any
Person acting on behalf of the Borrower shall take any action in violation of
Regulations U or X or shall violate Section 7 of the Securities Exchange Act of
1934, as amended, or any rule or regulation thereunder, in each case as now in
effect or as the same may hereafter be in effect.
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6.12. Notice of Default.
The Borrower shall furnish to the Administrative Agent immediately upon
becoming aware of the existence of any Default or Event of Default, a written
notice specifying the nature and period of existence thereof and the action that
the Borrower is taking or proposes to take with respect thereto.
6.13. [Reserved].
6.14. Compliance with Material Agreements.
The Borrower and, so long as the Servicer and one of the Originators are
the same entity, the Servicer shall each comply in all material respects with
all agreements, indentures, Mortgages or documents (including, with respect to
the Borrower, the Articles of Organization) binding on it or materially
affecting its Property or business in all cases where the failure to so comply
could reasonably be expected to result in a Material Adverse Effect.
6.15. Operations and Properties.
The Borrower and, so long as the Servicer and one of the Originators are
the same entity, the Servicer shall each act prudently and in accordance with
customary industry standards in managing and operating its Property and shall
continue to underwrite, hedge and sell Mortgage Loans in the same diligent
manner it has applied in the past.
6.16. ▇▇▇▇▇▇.
The Borrower shall cause the Originators to obtain, and maintain in full
force and effect, ▇▇▇▇▇▇ as of each date of determination, with an aggregate
purchase price at least equal to the total of the original principal balances of
the Borrower's entire portfolio of Mortgage Loans plus the Originators' entire
portfolio of Mortgage Loans.
6.17. Full Disclosure.
Neither any financial statements nor any Borrowing Report, officer's
certificate or statement delivered by the Borrower or the Servicer to the
Managing Agents in connection with this Agreement, will contain any untrue or
inaccurate statement of material fact or omit to state a material fact necessary
to make such information not misleading.
6.18. Environmental Compliance.
The Borrower and, so long as the Servicer and one of the Originators are
the same entity, the Servicer shall each use and operate all of its facilities
and properties in compliance with all environmental laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and handle
all hazardous materials in compliance with all applicable environmental laws.
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6.19. Closing Instructions.
The Borrower agrees to indemnify and hold the Lenders, the Administrative
Agent and the Managing Agents harmless from and against any loss, including
reasonable attorneys' fees, expenses and costs, attributable to the failure of a
title insurance company, agent or approved attorney to comply with the
disbursement or instruction letter or letters of the Borrower, the Managing
Agents or of the Administrative Agent relating to any Mortgage Loan. The
Servicer shall direct, via the closing instruction letter, each addressee title
insurance company, agent or attorney to remit into the Collection Account any
funds held in escrow for a Mortgage Loan that ultimately fails to close by the
second Business Day after the originally scheduled closing date for such
Mortgage Loan. In the absence of such remittance, the Borrower shall either (i)
substitute for the subject Mortgage Loan a substantially similar Mortgage Loan
or (ii) remit into the Collection Account, from its own funds, funds sufficient
to repay funds advanced for the subject Mortgage Loan. The Administrative Agent
shall have the right to pre-approve (in its reasonable discretion) the closing
instructions of the Originator to the title insurance company, agent or attorney
in any case where the Mortgage Loan to be created at settlement is intended to
be warehoused by the Lenders pursuant hereto.
6.20. Special Affirmative Covenants Concerning Collateral.
(a) The Borrower shall at all times warrant and defend the right,
title and interest of the Lenders, the Collateral Agent and the Administrative
Agent in and to the Collateral against the claims and demands of all Persons
whomsoever.
(b) The Borrower and the Servicer shall each service or cause to be
serviced all Mortgage Loans in the best interests of and for the benefit of the
Lenders, in accordance with the terms of this Agreement, the terms of the
Principal Mortgage Documents, the standard requirements of the issuers of
Take-Out Commitments or ▇▇▇▇▇▇ covering the same and to the extent consistent
with such terms, in accordance with Accepted Servicing Standards, including
without limitation taking all actions necessary to enforce the obligations of
the Obligors under such Eligible Mortgage Loans. The Borrower and the Servicer
each shall hold all escrow funds collected in respect of Eligible Mortgage Loans
in trust, without commingling the same with any other funds, and apply the same
for the purposes for which such funds were collected.
(c) The Servicer shall, no less than on an annual basis, review
financial statements, compliance with financial parameters, ▇▇▇▇▇▇ ▇▇▇/▇▇▇▇▇▇▇
Mac approvals (if applicable), and state licenses of all Persons from whom the
Originators acquire Mortgage Loans.
6.21. Corporate Separateness.
The Borrower covenants to take the following actions, and the Servicer
covenants to cause the Borrower to take the following actions:
(a) The Borrower shall at all times maintain at least one
Independent Manager (as such term is defined in the Limited Liability Company
Agreement).
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(b) The Borrower shall not direct or participate in the management
of any of the operations of the Other Companies.
(c) The Borrower shall allocate fairly and reasonably any overhead
for shared office space. The Borrower shall have stationery and other business
forms separate from that of the Other Companies.
(d) The Borrower shall at all times be adequately capitalized in
light of its contemplated business.
(e) The Borrower shall at all times provide for its own operating
expenses and liabilities from its own funds.
(f) The Borrower shall maintain its assets and transactions
separately from those of the Other Companies and reflect such assets and
transactions in financial statements separate and distinct from those of the
Other Companies and evidence such assets and transactions by appropriate entries
in books and records separate and distinct from those of the Other Companies.
The Borrower shall hold itself out to the public under the Borrower's own name
as a legal entity separate and distinct from the Other Companies. The Borrower
shall not hold itself out as having agreed to pay, or as being liable, primarily
or secondarily, for, any obligations of the Other Companies.
(g) The Borrower shall not maintain any joint account with any Other
Company or become liable as a guarantor or otherwise with respect to any
Indebtedness or contractual obligation of any Other Company.
(h) The Borrower shall not ▇▇▇▇▇ ▇ ▇▇▇▇ on any of its assets to
secure any obligation of any Other Company.
(i) The Borrower shall not make loans, advances or otherwise extend
credit to any of the Other Companies.
(j) The Borrower shall conduct its business in its own name and
strictly comply with all organizational formalities to maintain its separate
existence.
(k) The Borrower shall have bills of sale (or similar instruments of
assignment) and, if appropriate, UCC1 financing statements, with respect to all
assets purchased from any of the Other Companies.
(l) The Borrower shall not engage in any transaction with any of the
Other Companies, except as permitted by this Agreement, its Limited Liability
Company Agreement and its Amended and Restated Certificate of Formation, dated
as of August 6, 2003, filed with the Secretary of State of the State of
Delaware, and as contemplated by the Repurchase Agreement.
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ARTICLE VII
NEGATIVE COVENANTS
The Borrower and the Servicer shall each at all times comply with the
covenants applicable to it contained in this Article VII, from the date hereof
until the later of the Termination Date and the date all of the Obligations are
indefeasibly paid in full:
7.1. Limitations on Mergers and Acquisitions.
(a) The Servicer (so long as the Servicer and one of the Originators
are the same entity) shall not (i) merge or consolidate with or into any
corporation or other entity unless the Servicer or one of the Originators is the
surviving entity of any such merger or consolidation or (ii) liquidate or
dissolve.
(b) The Borrower will not merge with or into or consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions), all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock or other ownership interest of,
or enter into any joint venture or partnership agreement with, any Person, other
than as contemplated by this Agreement and the Repurchase Agreement.
7.2. Fiscal Year.
Neither the Borrower nor, so long as the Servicer and one of the
Originators are the same entity, the Servicer shall change its fiscal year other
than to conform with changes that may be made to the Performance Guarantors'
fiscal year and then only after notice to the Administrative Agent and after
whatever amendments are made to this Agreement as may be reasonably required by
the Administrative Agent, in order that the reporting criteria for the financial
covenants contained in Articles VI and VII remain substantially unchanged.
7.3. Business.
The Borrower will not engage in any business other than as set forth in
Section 1.06 of the Limited Liability Company Agreement.
7.4. Use of Proceeds.
The Borrower shall not permit the proceeds of the Advances to be used for
any purpose other than those permitted by Section 6.11 hereof. The Borrower
shall not, directly or indirectly, use any of the proceeds of the Advances for
the purpose, whether immediate, incidental or ultimate, of buying any "margin
stock" or of maintaining, reducing or retiring any Indebtedness originally
incurred to purchase a stock that is currently any "margin stock," or for any
other purpose that might constitute this transaction a "purpose credit," in each
case within the meaning of Regulation U, or otherwise take or permit to be taken
any action that would involve a violation of such Regulation U or of Regulation
T or Regulation Z (12 C.F.R. 224, as amended) or any other regulation
promulgated by the Federal Reserve Board.
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7.5. Actions with Respect to Collateral.
Neither the Borrower nor the Servicer shall:
(a) Compromise, extend, release, or adjust payments on any Mortgage
Collateral, accept a conveyance of mortgaged Property in full or partial
satisfaction of any Mortgage debt or release any Mortgage securing or underlying
any Mortgage Collateral, except as permitted by the related Approved Take-Out
Investor or as contemplated in the servicing guidelines distributed thereby and
only if such action would not result in a Default or Event of Default;
(b) Agree to the amendment or termination of any Take-Out Commitment
or Hedge in which the Administrative Agent has a security interest or to
substitution of a Take-Out Commitment or Hedge for a Take-Out Commitment or
Hedge in which the Administrative Agent has a security interest hereunder, if
such amendment, termination or substitution may be expected (as determined by
the Collateral Agent or the Administrative Agent in either of their sole
discretion) to have a Material Adverse Effect or to result in a Default or Event
of Default;
(c) Transfer, sell, assign or deliver any Mortgage Loan Collateral
pledged to the Administrative Agent to any Person other than the Administrative
Agent, except pursuant to a Take-Out Commitment or Hedge or pursuant to either
Section 3.3 or Section 3.4; or
(d) Grant, create, incur, permit or suffer to exist any Lien upon
any Mortgage Loan Collateral except for (i) Liens granted to the Administrative
Agent to secure the Notes and Obligations, (ii) any rights created by the
Repurchase Agreement and (iii) Liens granted to other Persons with respect to
Take-Out Commitments or ▇▇▇▇▇▇, so long as the amounts owing to all such Persons
and the Administrative Agent hereunder shall not exceed the principal amount of
all Take-Out Commitments or ▇▇▇▇▇▇.
7.6. Liens.
The Borrower will not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien upon or with respect
to, any Mortgage Asset, or upon or with respect to any account to which any
Collections of any Mortgage Asset are sent, or assign any right to receive
income in respect thereof except as contemplated hereby.
7.7. Employee Benefit Plans.
Neither the Borrower nor, so long as the Servicer and one of the
Originators are the same entity, the Servicer may permit any of the events or
circumstances described in Section 5.3(b) to exist or occur.
7.8. Change of Principal Office.
The Borrower shall not move its principal office, executive office or
principal place of business from the address set forth in Section 5.2(g) without
30-days' prior written notice to the Administrative Agent. The Borrower shall
not change its place of organization or add a new jurisdiction of organization
without 30 days' prior written notice to the Administrative Agent.
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7.9. No Commercial, A&D, Etc. Loans.
The Borrower shall not make or acquire any direct outright ownership
interest, participation interest or other creditor's interest in any commercial
real estate loan, acquisition and/or development loan, unimproved real estate
loan, personal property loan, oil and gas loan, commercial loan, wrap-around
real estate loan, unsecured loan, acquisition, development or construction loan.
7.10. [Reserved].
7.11. Indebtedness.
The Borrower will not incur any Indebtedness, other than any Indebtedness
incurred pursuant to this Agreement or the Repurchase Agreement or permitted to
be incurred pursuant to the Limited Liability Company Agreement.
7.12. Deposits to Collection Account.
Neither the Borrower nor the Servicer shall deposit or otherwise credit,
or cause or permit to be so deposited or credited, to the Collection Account,
cash or cash proceeds other than Collateral Proceeds.
7.13. Transaction Documents.
The Borrower will perform all of its obligations under each Transaction
Document to which it is a party and will enforce each Transaction Document to
which it is a party in accordance with its terms in all respects.
7.14. Distributions, Etc.
The Borrower will not declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any equity ownership interests of the Borrower, or return any capital
to its members as such, or purchase, retire, defease, redeem or otherwise
acquire for value or make any payment in respect of any equity ownership
interests of the Borrower or any warrants, rights or options to acquire any such
interests, now or hereafter outstanding; provided, however, that the Borrower
may declare and pay cash distributions on its equity ownership interests to its
members so long as (a) no Event of Default shall then exist or would occur as a
result thereof, (b) such distributions are in compliance with all applicable law
including the limited liability company law of the state of Borrower's
organization, and (c) such distributions have been approved by all necessary and
appropriate action of the Borrower.
7.15. Limited Liability Company Agreement.
The Borrower will not amend or delete (a) Sections 1.06, 4.01, 4.02, 4.08,
9.01-9.11, 10.02 and 11.01 or (b) the definition of "Independent Manager" set
forth in the Limited Liability Company Agreement. The Borrower will perform all
of its obligations under the Limited Liability Company Agreement.
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7.16. Minimum Tangible Net Worth.
The Servicer shall not:
(i) Permit at any time AHMIC's Tangible Net Worth to be less than
$685,000,000, plus 75% of the Net Cash Proceeds of any capital stock
(including preferred stock) issued by AHMIC after June 30, 2005;
(ii) Permit at any time the Tangible Net Worth of American Home
Mortgage Servicing, Inc. to be less than $30,000,000; and
(iii) Permit at any time the Tangible Net Worth of American Home
Mortgage Corp. to be less than $21,000,000.
7.17. Positive Net Income of Performance Guarantor.
AHMIC shall not permit its net income to be less than $1.00 for any period
of two consecutive fiscal quarters.
7.18. Collateral Value to Adjusted Consolidated Funded Debt Ratio.
AHMIC shall not permit at any time the ratio of its Aggregate Collateral
Value to its Adjusted Consolidated Funded Debt to be less than 1.00 to 1.00.
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Nature of Event.
An "Event of Default" shall exist if any one or more of the following
occurs:
(a) the Borrower fails (i) to make any payment of principal of or
interest on any of the Notes when due, or (ii) to make any payment when due, of
any fee, expense or other amount due hereunder, under the Notes or under any
other Transaction Document if such failure is not cured within five calendar
days of the due date or, (iii) so long as the Servicer is one of the
Originators, the Servicer fails to make any payment or deposit to be made by it
under this Agreement when due if such failure is not cured within five calendar
days of the due date of such payment or deposit; or
(b) the Borrower, any one of the Originators or, so long as the
Servicer and one of the Originators are the same entity, the Servicer fails to
keep or perform any covenant or material obligations contained in this Agreement
(other than as referred to in Section 8.1(a)) and such failure continues
unremedied beyond the expiration of any applicable grace or notice period that
may be expressly provided for in such covenant or material obligations; or
(c) the Borrower, any one of the Originators, the Servicer (so long
as the Servicer and one of the Originators are the same entity) or any
Performance Guarantor defaults
78
in the due observance or performance of any of the covenants or agreements
contained in any Transaction Document other than this Agreement, and (unless
such default otherwise constitutes a Default or an Event of Default pursuant to
other provisions of this Section 8.1) such default continues unremedied beyond
the expiration of any applicable grace or notice period that may be expressly
provided for in such Transaction Document; or
(d) any warranty or representation by or on behalf of the Borrower,
any one of the Originators, the Servicer (so long as the Servicer and one of the
Originators are the same entity) or any Performance Guarantor contained in this
Agreement, the Notes or any other Transaction Document or any statement,
warranty or representation in any Borrowing Report, officer's certificate or
other writing furnished in connection with this Agreement, proves to have been
incorrect or misleading in any material respect as of the date made or deemed
made; provided, that, this shall not include representations or warranties with
respect to specific Mortgage Loans, including but not limited to, clause (k) of
Section 5.2 hereof unless such incorrect statements are made knowingly or
intentionally; or
(e) (i) in the case of the Borrower, the Borrower fails to make when
due or within any applicable grace period any payment on any other Indebtedness
with an unpaid principal balance or, in the case of the Originators or the
Servicer, any one of the Originators or the Servicer (so long as the Servicer
and one of the Originators are the same entity) fails to make when due or within
any applicable grace period any payment on any other Indebtedness with an unpaid
principal balance of over $1,500,000.00 with respect to each Originator and the
Servicer ($10,000,000.00 in the case of each Performance Guarantor); or (ii) any
event or condition occurs under any provision contained in any such obligation
or any agreement securing or relating to such obligation (or any other breach or
default under such obligation or agreement occurs) if the effect thereof is to
cause or permit with the giving of notice or lapse of time or both the holder or
trustee of such obligation to cause such obligation to become due prior to its
stated maturity; or (iii) any such obligation becomes due (other than by
regularly scheduled payments) prior to its stated maturity; or (iv) in the case
of the Borrower, any of the foregoing occurs with respect to any one or more
items of Indebtedness with an unpaid principal balance, or, in the case of each
of the Originators or the Servicer (so long as the Servicer and one of the
Originator are the same entity) any of the foregoing occurs with respect to any
one or more items of Indebtedness with unpaid principal balances exceeding, in
the aggregate, $1,500,000.00 with respect to each Originator and the Servicer
($10,000,000.00 in the case of each Performance Guarantor); or
(f) the Borrower, any one of the Originators, the Servicer (so long
as the Servicer and one of the Originators are the same entity) or any
Performance Guarantor generally shall not pay its debts as they become due or
shall admit in writing its inability to pay its debts, or shall make a general
assignment for the benefit of creditors; or
(g) the Borrower, any of the Originators, the Servicer (so long as
the Servicer and one of the Originators are the same entity) or any Performance
Guarantor shall (i) apply for or consent to the appointment of a receiver,
trustee, custodian, intervenor or liquidator of it or of all or a substantial
part of its assets, (ii) file a voluntary petition in bankruptcy, (iii) file a
petition or answer seeking reorganization or an arrangement with creditors or to
take advantage of any Debtor Laws, (iv) file an answer admitting the allegations
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of, or consent to, or default in answering, a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding, or (v) take action for the
purpose of effecting any of the foregoing; or
(h) an involuntary petition or complaint shall be filed against the
Borrower, any of the Originators, the Servicer (so long as the Servicer and one
of the Originators are the same entity) or any Performance Guarantor seeking
bankruptcy or reorganization of the Borrower, any of the Originators, the
Servicer, or any Performance Guarantor or the appointment of a receiver,
custodian, trustee, intervenor or liquidator of the Borrower, any of the
Originators, the Servicer or any Performance Guarantor, all or substantially all
of the assets of either the Borrower, any of the Originators, the Servicer, or
any Performance Guarantor and such petition or complaint shall not have been
dismissed within 60 days of the filing thereof; or an order, order for relief,
judgment or, decree shall be entered by any court of competent jurisdiction or
other competent authority approving a petition or complaint seeking
reorganization of the Borrower, any of the Originators, the Servicer (so long as
the Servicer and one of the Originators are the same entity) or any Performance
Guarantor or appointing a receiver, custodian, trustee, intervenor or liquidator
of the Borrower, any of the Originators, the Servicer or any Performance
Guarantor, or of all or substantially all of assets of the Borrower, any of the
Originators, the Servicer or any Performance Guarantor; or
(i) in the case of the Borrower, the Borrower shall fail within 30
days to pay, bond or otherwise discharge any final judgment or order for payment
of money, or, in the case of the Originators, the Servicer and the Performance
Guarantors, any of the Originators, the Servicer (so long as the Servicer and
one of the Originators are the same entity) or any Performance Guarantor shall
fail within 30 days to pay, bond or otherwise discharge any final judgment or
order for payment of money in excess of $5,000,000.00; or any of the
Originators, the Servicer (so long as the Servicer and one of the Originators
are the same entity) or any Performance Guarantor shall fail within 30 days to
pay, bond or otherwise discharge final judgments or orders for payment of money
which exceed in the aggregate $5,000,000.00; or in the case of the Borrower, the
Borrower shall fail within 30 days to timely appeal or pay, bond or otherwise
discharge any judgments or order for payment which the Borrower may appeal, or
in the case of the Originators, the Servicer and the Performance Guarantors, any
of the Originators, the Servicer (so long as the Servicer and one of the
Originators are the same entity) or any Performance Guarantor shall fail within
30 days to timely appeal or pay, bond or otherwise discharge any judgments or
orders for payment of money which exceed, in the aggregate, $5,000,000.00 and
which any of the Originators, the Servicer or such Performance Guarantor may
appeal;
(j) any Person shall levy on, seize or attach all or any material
portion of the assets of the Borrower, any of the Originators, the Servicer (so
long as the Servicer and one of the Originators are the same entity) or any
Performance Guarantor and within thirty (30) days thereafter the Borrower, the
related Originators, the Servicer or the Performance Guarantor shall not have
dissolved such levy or attachment, as the case may be, and, if applicable,
regained possession of such seized assets; or
(k) if an event or condition specified in Section 5.3(b) shall occur
or exist; or
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(l) any of the Originators or the Servicer (so long as the Servicer
and one of the Originators are the same entity) becomes ineligible to originate,
sell or service Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae, or
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae shall impose any sanctions upon or
terminate or revoke any rights of the Servicer (so long as the Servicer and one
of the Originators are the same entity) or any of the Originators; or
(m) if (x) any Governmental Authority cancels an Originator's right
to be either a seller or servicer of such Governmental Authority's insured or
guaranteed Mortgage Loans or mortgage-backed securities, (y) any Approved
Take-Out Investor cancels for cause any servicing or underwriting agreement
between any of the Originators and such Approved Take-Out Investor that could
reasonably be expected to have a Material Adverse Effect or (z) any of the
Originators receives notice from a Governmental Authority that such Governmental
Authority intends to revoke such Originator's right to be a seller or servicer
of such Governmental Authority's insured or guaranteed Mortgage Loans or
mortgaged-backed securities and such notice is not withdrawn within (10) ten
days of the receipt thereof; or
(n) failure of the Borrower or any of the Originators to correct an
imbalance in any escrow account established with the Borrower or the related
Originator as either an originator, purchaser or servicer of Mortgage Loans,
which imbalance may have a Material Adverse Effect, within two (2) Business Days
after demand by any beneficiary of such account or by the Administrative Agent;
or
(o) failure of any of the Originators or the Servicer to meet, at
all times, the minimum net worth requirements of ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or
▇▇▇▇▇▇ Mae as an originator, seller or servicer, as applicable; or
(p) any material provision of this Agreement, the Notes or any other
Transaction Document shall for any reason cease to be in full force and effect,
or be declared null and void or unenforceable in whole or in part; or the
validity or enforceability of any such document shall be challenged or denied;
or
(q) a "change in control," with respect to the ownership of AHMIC
shall have occurred after the date hereof (and as used in this subparagraph, the
term "change in control" shall mean an acquisition by any Person, partnership or
group, as defined under the Securities Exchange Act of 1934, as amended, of a
direct or indirect beneficial ownership of 10% or more of the then-outstanding
voting stock of the Performance Guarantors ); or AHMIC shall cease at any time
to own directly or indirectly 100% of the stock of each Originator or 100% of
the ownership interests of the Borrower; or
(r) the total Collateral Value of all Eligible Mortgage Collateral
shall be less than the Principal Debt, at any time, and the Borrower shall fail
either to provide additional Eligible Mortgage Collateral with a sufficient
Collateral Value, or to pay Principal Debt, in an amount sufficient to correct
the deficiency within the time period set forth in Section 2.5(b); or
(s) if, as a result of the Borrower's failure to obtain and deliver
to the Collateral Agent, Principal Mortgage Documents as required by Section
2.3(c), the
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Administrative Agent shall determine that the continuation of such condition
could be reasonably expected to have a Material Adverse Effect on the Borrower
or the Lenders; or
(t) there shall have occurred any event that could be reasonably
expected to have a Material Adverse Effect on the enforceability or
collectability of any significant portion of the Mortgage Loans or the Take-Out
Commitments or the ▇▇▇▇▇▇ (provided that to the extent such event gives rise to
an obligation by any of the Originators to repurchase such Mortgage Loans
pursuant to the Repurchase Agreement and such Originator does so repurchase in
accordance with the provisions of the Repurchase Agreement, no Event of Default
shall occur under this Section 8.1(t) or there shall have occurred any other
event that could be reasonably expected to have a Material Adverse Effect on the
ability of the Borrower, the Servicer or the Collateral Agent to collect a
significant portion of Mortgage Loans or Take-Out Commitments or ▇▇▇▇▇▇ or the
ability of the Borrower or, so long as the Servicer and any of the Originators
are the same entity, the Servicer to perform hereunder or a Material Adverse
Effect has occurred in the financial condition or business of the Borrower since
inception or, so long as the Servicer and any one of the Originators are the
same entity, the Servicer since June 30, 2005; or
(u) (i) any litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings not disclosed in
writing by the Borrower to the Lenders, the Administrative Agent and the
Managing Agents prior to the date of execution and delivery of this Agreement is
pending against the Borrower or any Affiliate thereof, or (ii) any development
not so disclosed has occurred in any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental proceedings so
disclosed, which, in the case of either clause (i) and/or (ii), in the
reasonable opinion of the Majority Banks, could reasonably be expected to have a
Material Adverse Effect or impair the ability of the Borrower, any of the
Originators, the Servicer or any Performance Guarantor to perform its
obligations under this Agreement or any other Transaction Document; or
(v) the Internal Revenue Service shall file notice of a lien
pursuant to Section 6323 of the Code with regard to any of the assets of the
Borrower, any of the Originators or the Servicer (so long as the Servicer and
one of the Originators are the same entity) and such lien shall not have been
released within 30 days, or the PBGC shall, or shall indicate its intention to,
file notice of a lien pursuant to Section 4068 of ERISA with regard to any of
the assets of the Borrower, any of the Originators or the Servicer (so long as
the Servicer and one of the Originators are the same entity) and as to each of
the Originators; or
(w) as at the end of any Collection Period, the Delinquent Ratio
shall exceed 1%; or
(x) a successor Collateral Agent shall not have been appointed and
accepted such appointment within 180 days after the retiring Collateral Agent
shall have given written notice of resignation pursuant to Section 4.4 of the
Collateral Agreement; or
(y) a "Default," or an "Event of Default" shall occur under the
Repurchase Agreement, or the Repurchase Agreement shall cease to be in full
force and effect; or
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(z) all of the outstanding equity ownership interests of the
Borrower shall cease to be owned, directly or indirectly, by AHMIC; or
(aa) the Borrower shall cease or otherwise fail to have a good and
valid title to (or, to the extent that Article 9 of the UCC is applicable to the
Borrower's acquisition thereof, a valid perfected security interest in) a
significant portion of the Collateral (other than Collateral released in
accordance with Section 3.3) or the Security Instruments shall for any reason
(other than pursuant to the terms hereof) fail or cease to create a valid and
perfected first priority security interest in the Mortgage Loans and the other
Collateral for the benefit of the holders of the Obligations; or
(bb) as at the end of any Collection Period the amount of the Excess
Spread is less than fifty (50) basis points; or
(cc) as of the Settlement Date following any withdrawal from the
Reserve Account pursuant to Section 2.8(e)(i) (after giving effect to any
deposit to the Reserve Account pursuant to Section 2.7(c)(iii)(D) on such
Settlement Date) the amount on deposit in the Reserve Account shall be less than
the Required Reserve Account Amount.
8.2. Default Remedies.
(a) Upon the occurrence and continuation of an Event of Default
under Sections 8.1(f), (g), (h), (j), or (v) of this Agreement, the entire
unpaid balance of the Obligations shall automatically become due and payable,
the Termination Date shall immediately occur and the Maximum Facility Amount
shall immediately terminate, all without any notice or action of any kind
whatsoever.
(b) Upon the occurrence and continuation of an Event of Default
under any provision of Section 8.1 other than those set forth in Section 8.2(a),
the Administrative Agent may do any one or both of the following on behalf of
the Managing Agents (and shall at the direction of the Majority Banks): (i)
declare the entire unpaid balance of the Obligations immediately due and
payable, whereupon it shall be due and payable; and (ii) declare the Termination
Date to have occurred and terminate the Maximum Facility Amount; provided,
however that any declaration made by the Administrative Agent in clauses (i) and
(ii) above shall be in writing.
(c) Upon the occurrence of an Event of Default under any provision
of Section 8.1 and the acceleration of the unpaid balance of the Obligations
pursuant to Section 8.2(a) or (b), the Administrative Agent, on behalf of the
Managing Agents, may (and shall at the direction of the Majority Banks) do any
one or more of the following: (i) reduce any claim to judgment; (ii) exercise
the rights of offset or banker's Lien against the interest of the Borrower in
and to every account and other Property of the Borrower that are in the
possession of the Lenders, the Managing Agents, the Collateral Agent or the
Administrative Agent to the extent of the full amount of the Obligations (the
Borrower being deemed directly obligated to the Lenders, the Managing Agents and
the Administrative Agent in the full amount of the Obligations for such
purposes); (iii) foreclose or direct the Collateral Agent to foreclose any or
all Liens or otherwise realize upon any and all of the rights the Administrative
Agent, on
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behalf of the Managing Agents, may have in and to the Collateral, or any part
thereof; and (iv) exercise any and all other legal or equitable rights afforded
by the Transaction Documents, applicable Governmental Requirements, or
otherwise, including, but not limited to, the right to bring suit or other
proceedings before any Governmental Authority either for specific performance of
any covenant or condition contained in any of the Transaction Documents or in
aid of the exercise of any right granted to the Lenders, the Managing Agents or
the Administrative Agent in any of the Transaction Documents.
(d) Upon the occurrence and continuation of a Default hereunder or
under any Transaction Document, the Administrative Agent may, and shall, at the
direction of the Majority Banks, in addition to any and all other legal or
equitable rights afforded by the Transaction Documents, deliver an Activation
Notice under the Collection Account Control Agreement and/or the Reserve Account
Control Agreement.
8.3. Paydowns.
Immediately upon the occurrence of an Event of Default, and without any
requirement for notice or demand (including, without limitation, any notice or
demand otherwise required under Section 8.1), the Borrower shall make a payment
to the Administrative Agent in a total amount equal to the Collateral
Deficiency. This is a special, and not an exclusive, right or remedy and any
demand for performance under this Section 8.3 shall not waive or affect the
Lenders' or the Administrative Agent's rights to enforce any security interest
in the Collateral, collect a deficiency or to pursue damages or any other
remedy, as herein provided or as permitted at law or in equity, until all
Obligations have been fully paid and performed.
8.4. Waivers of Notice, Etc.
Except as otherwise provided in this Agreement, the Borrower and each
surety, endorser, guarantor and other party liable for payment of any sum or
sums of money that may become due and payable, or the performance or any
undertaking that may be owed, to the Lenders, the Managing Agents or the
Administrative Agent pursuant to this Agreement, the Notes, or the other
Transaction Documents, including the Obligations, jointly and severally waive
demand for payment, presentment, protest, notice of protest and nonpayment or
other notice of default, notice of acceleration and notice of intention to
accelerate, and agree that its or their liability under this Agreement, the
Notes or other Transaction Documents shall not be affected by any renewal or
extension of the time or place of payment or performance hereof, or any
indulgences by the Lenders or the Administrative Agent, or by any release or
change in any security for the payment of the Obligations, and hereby consent to
any and all renewals, extensions, indulgences, releases or changes, regardless
of the number of such renewals, extensions, indulgences, releases or changes.
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ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Authorization.
Each Lender has appointed the Administrative Agent as its agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement of this Agreement), the Administrative Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Banks, and such
instructions shall be binding upon all Lenders; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law.
9.2. Reliance by Agent.
Notwithstanding anything to the contrary in this Agreement or any other
Transaction Document, neither the Administrative Agent nor any of its directors,
officers, agents, representatives, employees, attorneys-in-fact or Affiliates
shall be liable for any action taken or omitted to be taken by it or them (in
their capacity as or on behalf of the Administrative Agent) under or in
connection with this Agreement or the other Transaction Documents, except for
its or their own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, the Administrative Agent: (a) may treat the
payee of the Notes as the holder thereof; (b) may consult with legal counsel
(including counsel for the Borrower), independent certified public accountants
and other experts selected by it or the Borrower and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender or the Managing Agents and shall not be responsible
to any Lender or the Managing Agents for any statements, warranties or
representations made in or in connection with this Agreement or the other
Transaction Documents; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement on the part of the Borrower or to inspect the Property (including
the books and records) of the Borrower, except that the Administrative Agent
shall coordinate Periodic Visits; (e) shall not be responsible to any Lender or
the Managing Agents for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto or the enforceability or perfection or
priority of any Collateral; and (f) shall incur no liability under or in respect
of this Agreement or any other Transaction Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
cable or telex) believed by the Administrative Agent to be genuine and signed or
sent by the proper Person or party.
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9.3. Agent and Affiliates.
With respect to any Advance made by Calyon, Calyon shall have the same
rights and powers under this Agreement as would any Lender and may exercise the
same as though it were not the Administrative Agent. Calyon and its Affiliates
may accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower, the Managing
Agents, any of the Borrower's Affiliates and any Person who may do business with
or own securities of the Borrower, the Managing Agents or any such Affiliate,
all as if Calyon were not the Administrative Agent and without any duty to
account therefor to the Lenders. If Calyon is removed as Administrative Agent,
such removal will not affect Calyon's rights and interests as a Lender.
9.4. Lender Decision.
Each Lender (including each Lender that becomes a party hereto by
assignment) acknowledges that it has, independently and without reliance on the
Administrative Agent, any of its Affiliates or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
evaluation and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance on the
Administrative Agent, any of its Affiliates or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action under this
Agreement.
9.5. Rights of the Administrative Agent.
Each right and remedy expressly provided by this Agreement as being
available to the Administrative Agent shall be exercised by the Administrative
Agent only at the direction of the Majority Banks.
9.6. Indemnification of Administrative Agent.
Each Bank agrees to indemnify the Administrative Agent (to the extent not
reimbursed by or on behalf of the Borrower), ratably according to the respective
principal amounts held by it (or if no Advances are then outstanding, each Bank
shall indemnify the Administrative Agent ratably according to the amount of its
Bank Commitment), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or the other Transaction Documents or any action taken or
omitted by the Administrative Agent under this Agreement or the other
Transaction Documents, provided that no Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Administrative
Agent's gross negligence or willful misconduct.
9.7. UCC Filings.
The Lenders and the Borrower expressly recognize and agree that the
Administrative Agent may be listed as the assignee or secured party of record on
the various UCC filings
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required to be made hereunder in order to perfect the security interest in the
Collateral granted by the Borrower for the benefit of the holders of the
Obligations and that such listing shall be for administrative convenience only
in creating a record-holder or nominee to take certain actions hereunder on
behalf of the holders of the Obligations.
9.8. Notices and Payments to Managing Agents.
(a) The Administrative Agent shall give each Managing Agent prompt
notice of each written notice received by it from the Borrower pursuant to
Section 2.1 and Section 2.3 hereof if such notice is delivered to the
Administrative Agent for the benefit of the Lenders.
(b) Any payments received by the Administrative Agent from the
Borrower for the account of the Lenders shall be promptly distributed to the
related Managing Agent's Account.
ARTICLE X
INDEMNIFICATION
10.1. Indemnities by the Borrower.
(a) General Indemnity. Without limiting any other rights that any
such Person may have hereunder or under applicable law, the Borrower hereby
agrees to indemnify each of the Lenders, each Managing Agent, the Administrative
Agent, any Affected Party, their respective successors, transferees,
participants and assigns and all affiliates, officers, directors, shareholders,
controlling persons, employees and agents of any of the foregoing (each an
"Indemnified Party"), forthwith on demand, from and against any and all damages,
losses, claims, liabilities and related reasonable costs and expenses, including
attorneys' fees and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or relating to this Agreement or the exercise or performance of
any of its or their powers or duties, in respect of any Mortgage Loan or
Take-Out Commitment or Hedge, or related to its or their possession of, or
dealings with, the Collateral, excluding, however, any Indemnified Amounts
resulting from gross negligence, willful misconduct, or unlawful collection
activity directed against a borrower under a mortgage loan included in the
Collateral on the part of such Indemnified Party.
(b) Contribution. If for any reason the indemnification provided
above in this Section 10.1 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then the Borrower shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect not only the relative benefits received by such Indemnified Party on the
one hand and Borrower on the other hand but also the relative fault of such
Indemnified Party as well as any other relevant equitable considerations.
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ARTICLE XI
ADMINISTRATION AND COLLECTION OF MORTGAGE LOANS
11.1. Designation of Servicer.
The servicing, administration and collection of the Mortgage Assets shall
be conducted by the Servicer so designated hereunder from time to time. Until
the Administrative Agent gives notice to the Borrower and the Originators of the
designation of a new Servicer after the occurrence of a Default or an Event of
Default, American Home Mortgage Servicing, Inc. is hereby designated as, and
hereby agrees to perform the duties and obligations of, the Servicer pursuant to
the terms hereof. The Administrative Agent may at any time following the
occurrence of a Servicer Default designate as Servicer any Person (including
itself) to succeed the Originators or any successor Servicer, if such Person
shall consent and agree to the terms hereof. The Servicer may, with the prior
consent of the Majority Banks (which shall not be unreasonably withheld or
delayed), subcontract with any other Person for the servicing, administration or
collection of the Mortgage Assets. Any such subcontract shall not affect the
Servicer's liability for performance of its duties and obligations pursuant to
the terms hereof.
11.2. Duties of Servicer.
(a) The Servicer shall take or cause to be taken all such actions as
may be necessary or advisable to collect each Mortgage Asset from time to time,
all in accordance with applicable laws, rules and regulations, with care and
diligence, and in accordance with the servicing guide issued by the Governmental
Authority applicable to such Mortgage Asset or, in the case of Non-Conforming
Loans, the servicing criteria specified by the Approved Take-Out Investor that
has issued a Take-Out Commitment with respect thereto. The Borrower and the
Administrative Agent hereby appoint the Servicer, from time to time designated
pursuant to Section 11.1, as agent for themselves and for the Lenders to enforce
their respective rights and interests in the Mortgage Assets and the Collections
thereof. In performing its duties as Servicer, the Servicer shall exercise the
same care and apply the same policies as it would exercise and apply if it owned
such Mortgage Loans and shall act in the best interests of the Borrower and the
Lenders.
(b) The Servicer shall administer the Collections in accordance with
the procedures described in Section 2.7 and shall service the Collateral in
accordance with Section 6.20 and Section 7.5.
(c) The Servicer shall hold in trust for the Borrower and the
Lenders, in accordance with their respective interests, all books and records
(including, without limitation, computer tapes or disks) that relate to the
Mortgage Assets.
(d) The Servicer shall, as soon as practicable following receipt,
turn over to the Borrower or the Originators, as appropriate, any cash
collections or other cash proceeds received with respect to Property not
constituting Mortgage Assets.
(e) The Servicer shall, from time to time at the request of the
Administrative Agent, furnish to the Administrative Agent (promptly after any
such request) a calculation of
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the amounts set aside for the Lenders pursuant to Section 2.7(c). Upon request
of any Managing Agent, the Administrative Agent shall provide or cause to be
provided to such Managing Agent a calculation of the amounts set aside for the
Lenders pursuant to Section 2.7(c).
(f) The Servicer shall perform the duties and obligations of the
Servicer set forth in the Collateral Agency Agreement and the other Security
Instruments.
11.3. Certain Rights of the Administrative Agent.
At any time following the designation of a Servicer other than the
Originators pursuant to Section 11.1 or following an Event of Default:
(a) The Administrative Agent may direct the Obligors that all
payments thereunder be made directly to the Administrative Agent or its
designee.
(b) At the Administrative Agent's request and at the Borrower's
expense, the Borrower shall notify each Obligor of the Lien on the Mortgage
Assets and direct that payments be made directly to the Administrative Agent or
its designee.
(c) At the Administrative Agent's reasonable request and at the
Borrower's expense, the Borrower and the Servicer shall (i) assemble all of the
documents, instruments and other records (including, without limitation,
computer tapes and disks) that evidence or relate to the Mortgage Assets and
Collections and Collateral, or that are otherwise necessary or desirable to
collect the Mortgage Assets, and shall make the same available to the
Administrative Agent at a place selected by the Administrative Agent or its
designee, and (ii) segregate all cash, checks and other instruments received by
it from time to time constituting Collections in a manner reasonably acceptable
to the Administrative Agent and, promptly upon receipt, remit all such cash,
checks and instruments, duly endorsed or with duly executed instruments of
transfer, to the Administrative Agent or its designee.
(d) The Borrower authorizes the Administrative Agent to take any and
all steps in the Borrower's name and on behalf of the Borrower that are
necessary or desirable, in the determination of the Administrative Agent, to
collect amounts due under the Mortgage Assets, including, without limitation,
endorsing the Borrower's name on checks and other instruments representing
Collections and enforcing the Mortgage Assets and the other Collateral.
11.4. Rights and Remedies.
(a) If the Servicer fails to perform any of its obligations under
this Agreement, the Administrative Agent may (but shall not be required to)
itself perform, or cause performance of, such obligation; and the Administrative
Agent's reasonable costs and expenses incurred in connection therewith shall be
payable by the Servicer.
(b) With respect to each Mortgage Loan, the Servicer shall follow
procedures (including collection procedures) that the Servicer customarily
employs and exercises in servicing and administering mortgage loans for its own
account and that are in
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accordance with accepted mortgage servicing practices of prudent lending
institutions servicing mortgage loans of the same type as the Mortgage Loans in
the jurisdictions in which the related Mortgaged Properties are located. The
exercise by the Administrative Agent on behalf of the Lenders of their rights
under this Agreement shall not release the Servicer from any of their duties or
obligations with respect to any Mortgage Loans. Neither the Administrative
Agent, nor the Lenders shall have any obligation or liability with respect to
any Mortgage Loans, nor shall any of them be obligated to perform the
obligations of the Borrower thereunder.
(c) In the event of any conflict between the provisions of this
Article XI of this Agreement and Article VI of the Repurchase Agreement, the
provisions of this Agreement shall control.
11.5. Indemnities by the Servicer.
Without limiting any other rights that the Administrative Agent, any
Lender or Managing Agent or any of their respective Affiliates (each, a "Special
Indemnified Party") may have hereunder or under applicable law, and in
consideration of its appointment as Servicer, the Servicer hereby agrees to
indemnify each Special Indemnified Party from and against any and all claims,
losses and liabilities (including attorneys' fees) (all of the foregoing being
collectively referred to as "Special Indemnified Amounts") arising out of or
resulting from any of the following excluding, however, (x) Special Indemnified
Amounts to the extent resulting from gross negligence or willful misconduct on
the part of such Special Indemnified Party, (y) recourse for Mortgage Assets
that are not collected, not paid or uncollectible on account of the insolvency,
bankruptcy or financial inability to pay of the applicable Obligor or (z) any
income taxes or any other tax or fee measured by income incurred by such Special
Indemnified Party arising out of or as a result of this Agreement or the
Borrowings hereunder):
(a) any representation or warranty or statement made or deemed made
by the Servicer under or in connection with this Agreement that shall have been
incorrect in any respect when made;
(b) the failure by the Servicer to comply in any material respect
with any applicable law, rule or regulation with respect to any Mortgage Asset
or the failure of any Mortgage Loan to conform to any such applicable law, rule
or regulation;
(c) the failure (i) to have filed, or any delay in filing, Mortgages
or assignments of Mortgages under the applicable laws of any applicable
jurisdiction or (ii) to have caused a first priority perfected interest in the
Mortgage Assets to have been granted to the Administrative Agent, in each case
with respect to any Mortgage Assets and the other Collateral and Collections in
respect thereof, whether at the time of any purchase under the Repurchase
Agreement or at any subsequent time;
(d) any failure of the Servicer to perform its duties or obligations
in accordance with the provisions of this Agreement;
(e) the commingling of Collections at any time by the Servicer with
other funds;
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(f) any action or omission by the Servicer reducing or impairing the
rights of the Administrative Agent or the Lenders with respect to any Mortgage
Asset or the value of any Mortgage Asset;
(g) any Servicer Fees or other costs and expenses payable to any
replacement Servicer, to the extent in excess of the Servicer Fees payable to
the Servicer hereunder; or
(h) any claim brought by any Person other than a Special Indemnified
Party arising from any activity by the Servicer or its Affiliates in servicing,
administering or collecting any Mortgage Asset.
ARTICLE XII
THE MANAGING AGENTS
12.1. Authorization.
Each Lender hereby appoints and authorizes the related Managing Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to such Managing Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement (including, without limitation,
enforcement of this Agreement), each Managing Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Banks included in the related Group,
having outstanding Bank Commitments equal to more than 50% of the aggregate
outstanding Bank Commitments of the Banks in such Group (or all the Banks where
unanimity is required), and such instructions shall be binding upon all Lenders
in its Group; provided, however, that such Managing Agent shall not be required
to take any action which exposes such Managing Agent to personal liability or
which is contrary to this Agreement or applicable law.
12.2. Reliance by Agent.
Notwithstanding anything to the contrary in this Agreement or any other
Transaction Document, none of the Managing Agents nor any of their respective
directors, officers, agents, representatives, employees, attorneys-in-fact or
Affiliates shall be liable for any action taken or omitted to be taken by it or
them (in their capacity as or on behalf of such Managing Agent) under or in
connection with this Agreement or the other Transaction Documents, except for
its or their own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, each Managing Agent: (a) may treat the payee of
the Notes as the holder thereof; (b) may consult with legal counsel (including
counsel for the Borrower), independent certified public accountants and other
experts selected by it or any such party and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance with the advice
of such counsel, accountants or experts; (c) makes no warranty or representation
to any Lender or to the other Managing Agents and shall not be responsible to
any Lender or to the other Managing Agents for any statements, warranties or
representations made in or in connection with this
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Agreement or the other Transaction Documents; (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement on the part of the Borrower or to
inspect the property (including the books and records) of the Borrower; (e)
shall not be responsible to any Lender or to the other Managing Agents for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto or the enforceability or perfection or priority of any Collateral; and
(f) shall incur no liability under or in respect of this Agreement or any other
Transaction Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, cable or telex) believed by
such Managing Agent to be genuine and signed or sent by the proper Person or
party.
12.3. Agent and Affiliates.
With respect to any Advance made by a Managing Agent, such Managing Agent
shall have the same rights and powers under this Agreement as would any Lender
and may exercise the same as though it were not a Managing Agent. The Managing
Agents and their respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrower, any of the Borrower's respective Affiliates and any Person
who may do business with the Borrower or any such Affiliates or own the
Borrower's securities or those of any such Affiliate, all as if no such Managing
Agent were a Managing Agent and without any duty to account therefor to the
Lenders. If any Managing Agent is removed as a Managing Agent, such removal will
not affect the rights and interests of such Managing Agent as a Lender.
12.4. Notices.
Each Managing Agent shall give each Lender in its Group prompt notice of
each written notice received by it from the Borrower or the Administrative Agent
pursuant to the terms of this Agreement.
12.5. Lender Decision.
Each Lender (including each Lender that becomes a party hereto by
assignment) acknowledges that it has, independently and without reliance on any
Managing Agent, any Managing Agent's Affiliates or any other Lender and based on
such documents and information as it has deemed appropriate, made its own
evaluation and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance on any Managing
Agent, any Managing Agent's Affiliates or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Agreement.
12.6. Indemnification of Managing Agents.
Each Bank agrees to indemnify the related Managing Agent (to the extent
not reimbursed by or on behalf of the Borrower), ratably according to the
respective principal amounts held by it (or if no Advances are then outstanding,
each Bank shall indemnify the related Managing Agent ratably according to the
amount of its Bank Commitment), from and
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against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against such
Managing Agent in any way relating to or arising out of this Agreement or the
other Transaction Documents or any action taken or omitted by the related
Managing Agent under this Agreement or the other Transaction Documents, provided
that no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from a Managing Agent's gross negligence or willful
misconduct.
ARTICLE XIII
MISCELLANEOUS
13.1. Notices.
Any notice, demand or request required or permitted to be given under or
in connection with this Agreement, the Notes or the other Transaction Documents
(except as may otherwise be expressly required therein) shall be in writing and
shall be mailed by first class or express mail, postage prepaid, or sent by
telex, telegram, telecopy or other similar form of rapid transmission, confirmed
by mailing (by first class or express mail, postage prepaid) written
confirmation at substantially the same time as such rapid transmission, or
personally delivered to an officer of the receiving party. With the exception of
certain administrative and collateral reports that may be directed to specific
departments of the Administrative Agent, all such communications shall be
mailed, sent or delivered to the parties hereto at their respective addresses as
follows:
The Borrower: AHM SPV I, LLC
c/o American Home Mortgage Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
The Issuers: LA FAYETTE ASSET SECURITIZATION LLC
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Conduit Securitization
With a copy to the Administrative Agent (except
in the case of notice from the Administrative
Agent).
AMSTERDAM FUNDING CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Mail Code C540-2721
93
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
PARK AVENUE RECEIVABLES COMPANY
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Mail Code IL1-0597
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ CAPITAL LLC
c/o AMACAR Group
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Banks and Managing Agents: CALYON NEW YORK BRANCH
Calyon Building
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Conduit Securitization
LLOYDS TSB BANK PLC
1251 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABN AMRO BANK N.V.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Street, 27th Floor
Mailcode C540-2721
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
SOCIETE GENERALE
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
JPMORGAN ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Mail Code IL1-0597
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telex No.: 62410
(Answerback: CRED A 62410 UW)
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Conduit Securitization
The Servicer: AMERICAN HOME MORTGAGE SERVICING, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
The Originators: AMERICAN HOME MORTGAGE CORP.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
AMERICAN HOME MORTGAGE SERVICING, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
With a copy to: AMERICAN HOME MORTGAGE SERVICING, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
The Performance Guarantors: AMERICAN HOME MORTGAGE HOLDINGS, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
AMERICAN HOME MORTGAGE INVESTMENT CORP.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
or at such other addresses or to such officer's, individual's or department's
attention as any party may have furnished the other parties in writing. Any
communication so addressed and mailed shall be deemed to be given when so
mailed, except with respect to notices and requests given pursuant to Sections
2.3 and 3.3. Borrowing Reports and communications related thereto shall not be
effective until actually received by the Collateral Agent, the Administrative
Agent, the Issuers or the Borrower, as the case may be; and any notice so sent
by rapid transmission shall be deemed to be given when receipt of such
transmission is acknowledged, and any communication so delivered in person shall
be deemed to be given when receipted for by, or actually received by, an
authorized officer of the Borrower, the Collateral Agent, the Issuers, or the
Administrative Agent.
13.2. Amendments, Etc.
No amendment or waiver of any provision of this Agreement or consent to
any departure by the Borrower therefrom shall be effective unless in a writing
signed by the Majority Banks, the applicable Managing Agent (as agent for the
Issuer) and the Administrative Agent (and, in the case of any amendment, also
signed by the Borrower and the Servicer), and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No Bank Commitment of any Bank shall be increased
without the consent of the Lenders and the Managing Agent of the applicable
Group. Notwithstanding the foregoing, unless an amendment, waiver or consent
shall be made in writing and signed by each of the Banks, the Managing Agents
and the Administrative Agent (and in the case of any amendment or modification,
the Borrower and the Servicer), and each of the Rating Agencies shall confirm
that any amendment will not result in a downgrade or withdrawal of the ratings
assigned to any Commercial Paper Notes, no amendment, waiver or consent shall do
any of the following:
(a) amend the definitions of Eligible Mortgage Loan, Collateral
Value, Advance Rate or Majority Banks or
(b) amend, modify or waive any provision of this Agreement in any
way that would:
(i) reduce the amount of principal or interest that is payable
on account of any Advance or delay any scheduled date for payment thereof, or
96
(ii) impair any rights expressly granted to an assignee or
participant under this Agreement, or
(iii) reduce the fees, costs and expenses payable by the
Borrower, to the Administrative Agent, the Managing Agents or the Lenders, or
(iv) delay the dates on which such fees, costs and expenses
are payable, or
(c) amend or waive the Event of Default set forth in Sections
8.1(f), (g) or (h) relating to the bankruptcy of any Performance Guarantor, the
Originators or the Borrower, or
(d) amend or waive the Event of Default set forth in Section 8.1(a),
(h), (i), (j), (r), (v), (w), (bb), or (cc),or
(e) amend clause (a) of the definition of Termination Date, or
(f) release any Performance Guarantor or any Performance Guaranty
(other than as expressly provided for in the Transaction Documents), or
(g) release any Collateral (other than expressly provided for in the
Transaction Documents), or
(h) amend this Section 13.2;
and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Servicer in addition to the other parties required
above to take such action, affect the rights or duties of the Servicer under
this Agreement. No failure on the part of the Lenders, the Managing Agents or
the Administrative Agent to exercise, and no delay in exercising, any right
thereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
13.3. Invalidity.
In the event that any one or more of the provisions contained in the
Notes, this Agreement or any other Transaction Document shall, for any reason,
be held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of such
document.
13.4. Restrictions on Informal Amendments.
No course of dealing or waiver on the part of the Administrative Agent,
the Collateral Agent, the Managing Agents, any Lender or any Affected Party, or
any of their officers, employees, consultants or agents, or any failure or delay
by any such Person with respect to exercising any right, power or privilege
under the Notes, this Agreement or any other Transaction Document shall operate
as an amendment to the express written terms of the Notes,
97
this Agreement or any other Transaction Document or shall act as a waiver of any
right, power or privilege of any such Person.
13.5. Cumulative Rights.
The rights, powers, privileges and remedies of each of the Lenders, the
Collateral Agent, each Managing Agent, and the Administrative Agent under the
Notes, this Agreement, and any other Transaction Document shall be cumulative,
and the exercise or partial exercise of any such right, power, privilege or
remedy shall not preclude the exercise of any other right or remedy.
13.6. Construction; Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW WHICH SHALL APPLY HERETO).
13.7. Interest.
Any provisions herein, in the Notes, or in any other Transaction Document,
or any other document executed or delivered in connection herewith, or in any
other agreement or commitment, whether written or oral, expressed or implied, to
the contrary notwithstanding, the Lenders shall in no event be entitled to
receive or collect, nor shall or may amounts received hereunder be credited, so
that the Lenders shall be paid, as interest, a sum greater than the maximum
amount permitted by applicable law to be charged to the Person primarily
obligated to pay such Note at the time in question. If any construction of this
Agreement, any Note or any other Transaction Document, or any and all other
papers, agreements or commitments indicate a different right given to a Lender
to ask for, demand or receive any larger sum as interest, such is a mistake in
calculation or wording that this clause shall override and control, it being the
intention of the parties that this Agreement, each Note, and all other
Transaction Documents or other documents executed or delivered in connection
herewith shall in all things comply with applicable law and proper adjustments
shall automatically be made accordingly. In the event that any of the Lenders
shall ever receive, collect or apply as interest, any sum in excess of the
maximum nonusurious rate permitted by applicable law (the "Maximum Rate"), if
any, such excess amount shall be applied to the reduction of the unpaid
principal balance of the Note held by such Lender, and if such Note is paid in
full, any remaining excess shall be paid to the Borrower. In determining whether
or not the interest paid or payable, under any specific contingency, exceeds the
Maximum Rate, if any, the Borrower and each of the Lenders shall, to the maximum
extent permitted under applicable law: (a) characterize any nonprincipal payment
as an expense or fee rather than as interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) "spread" the total amount of interest
throughout the entire term of the respective Note; provided that if any Note is
paid and performed in full prior to the end of the full contemplated term
hereof, and if the interest received for the actual period of existence thereof
exceeds the Maximum Rate, if any, the respective Lender shall refund to the
Borrower
98
the amount of such excess, or credit the amount of such excess against the
aggregate unpaid principal balance of all Advances made by such Lender hereunder
at the time in question.
13.8. Right of Offset.
The Borrower hereby grants to each of the Lenders, the Managing Agents and
the Administrative Agent and to any assignee or participant a right of offset,
to secure the repayment of the Obligations, upon any and all monies, securities
or other Property of the Borrower, and the proceeds therefrom now or hereafter
held or received by or in transit to such Person, from or for the account of the
Borrower, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, and also upon any and all deposits (general or special, time or
demand, provisional or final) and credits of the Borrower, and any and all
claims of the Borrower against such Person at any time existing. Upon the
occurrence of any Event of Default, such Person is hereby authorized at any time
and from time to time, without notice to the Borrower, to offset, appropriate,
and apply any and all items hereinabove referred to against the Obligations.
Notwithstanding anything in this Section 13.8 or elsewhere in this Agreement to
the contrary, the Administrative Agent and the Lenders and any assignee or
participant shall not have any right to offset, appropriate or apply any
accounts of the Borrower that consist of escrowed funds (except and to the
extent of any beneficial interest of the Borrower in such escrowed funds) that
have been so identified by the Borrower in writing at the time of deposit
thereof.
13.9. Successors and Assigns.
(a) This Agreement and the Issuers' rights and obligations herein
(including ownership of each Advance) shall be assignable by the Issuers and
their successors and assigns to any Eligible Assignee. Each assignor of an
Advance or any interest therein shall notify the Administrative Agent, the
related Managing Agent and the Borrower of any such assignment.
(b) Each Bank may assign to any Eligible Assignee or to any other
Bank all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Bank Commitment and any
Advances or interests therein owned by it), provided however, that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this Agreement,
(ii) the amount being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance Agreement
with respect to such assignment) shall in no event be less than the lesser of
(x) $20,000,000 and (y) all of the assigning Bank's Bank Commitment,
(iii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance Agreement, together with a processing and
recordation fee of $3,500, and
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(iv) concurrently with such assignment, such assignor Bank
shall assign to such assignee Bank an equal percentage of its rights and
obligations under the related Liquidity Agreement.
Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in such Assignment and Acceptance Agreement, (x)
the assignee thereunder shall be a party to this Agreement and, to the extent
that rights and obligations hereunder or under this Agreement have been assigned
to it pursuant to such Assignment and Acceptance Agreement, have the rights and
obligations of a Bank hereunder and thereunder and (y) the assigning Bank shall,
to the extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment and Acceptance Agreement, relinquish such rights and
be released from such obligations under this Agreement (and, in the case of an
Assignment and Acceptance Agreement covering all or the remaining portion of an
assigning Bank's rights and obligations under this Agreement, such Bank shall
cease to be a party thereto).
(c) The Administrative Agent shall maintain at its address referred
to in Section 13.1 a copy of each Assignment and Acceptance Agreement delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Banks and the Bank Commitment of, and aggregate outstanding
principal of Advances or interests therein owned by, each Bank from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrower, the Servicer, the
Managing Agents, the Administrative Agent and the Banks may treat each person
whose name is recorded in the Register as a Bank under this Agreement for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Servicer, the Managing Agents, the Administrative Agent or any
Bank at any time and from time to time upon prior notice.
(d) Each Lender may sell participations, to one or more banks or
other entities that are Eligible Assignees, in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Bank Commitment and the Advances or interests therein owned
by it); provided, however, that:
(i) such Lender's obligations under this Agreement (including,
without limitation, its Bank Commitment to the Borrower thereunder) shall remain
unchanged,
(ii) such Lender shall remain solely responsible to the other
parties to this Agreement for the performance of such obligations,
(iii) concurrently with such participation, the selling Lender
shall sell to such bank or other entity a participation in an equal percentage
of its rights and obligations under the related Liquidity Agreement, and
(iv) the agreement to enter into a participation, signed by
Lender and any participant must contain the confidentiality provision set forth
in Section 13.15 herein.
The Administrative Agent, the other Lenders, the Managing Agents, the Servicer
and the Borrower shall have the right to continue to deal solely and directly
with such Lenders in connection with such Lender's rights and obligations under
this Agreement.
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(e) The Borrower may not assign its rights or obligations hereunder
or any interest herein without the prior written consent of the Administrative
Agent, each Managing Agent and each Lender and any attempted assignment shall be
null and void.
(f) The parties hereto acknowledge that each of the Issuers has
granted to the related Managing Agent, as program agent, for the benefit of
holders of its Commercial Paper Notes, its liquidity banks, and certain other
related creditors, a security interest in its right, title and interest in and
to the Advances, the Transaction Documents and the Collateral. Each reference
herein or in any of the other Transaction Documents to the Liens in the
Collateral granted to the Issuers under the Transaction Documents shall be
deemed to include a reference to such security interest of the related program
agent.
13.10. Survival of Termination.
The provisions of Article X and Sections 2.12, 11.4, 11.5, 13.14, 13.15,
13.19, 13.20 and 13.21 shall survive any termination of this Agreement.
13.11. Exhibits.
The exhibits attached to this Agreement are incorporated herein and shall
be considered a part of this Agreement for the purposes stated herein, except
that in the event of any conflict between any of the provisions of such exhibits
and the provisions of this Agreement, the provisions of this Agreement shall
prevail.
13.12. Titles of Articles, Sections and Subsections.
All titles or headings to articles, sections, subsections or other
divisions of this Agreement or the exhibits hereto are only for the convenience
of the parties and shall not be construed to have any effect or meaning with
respect to the other content of such articles, sections, subsections or other
divisions, such other content being controlling as to the agreement between the
parties hereto.
13.13. Counterparts.
This Agreement may be executed in two or more counterparts, and it shall
not be necessary that the signatures of each of the parties hereto be contained
on any one counterpart hereof; each counterpart shall be deemed an original, but
all counterparts together shall constitute one and the same instrument.
13.14. No Proceedings.
The Borrower, the Servicer, the Administrative Agent and each Bank hereby
agrees that it will not institute against any Issuer, or join any other Person
in instituting against any Issuer, any bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law so long as any Commercial Paper Notes issued by
such Issuer shall be outstanding or there shall not have elapsed one year plus
one day since the last day on which any such Commercial Paper Notes shall have
been outstanding. The foregoing shall not limit the rights of the Borrower, the
Servicer, the
101
Administrative Agent, any Managing Agent or any Bank to file any claim in or
otherwise take any action with respect to any insolvency proceeding that was
instituted by any other Person.
13.15. Confidentiality.
Except as required by any Governmental Authority or subject to any
Governmental Requirement, with respect to either of them or any of their
Affiliates, the Borrower and the Servicer each hereby agrees that it will
maintain and cause its respective employees to maintain the confidentiality of
this Agreement, and the other Transaction Documents (and all drafts thereof),
and each Lender, each Managing Agent and the Administrative Agent agrees that it
will maintain and cause its respective employees to maintain the confidentiality
of the Collateral and all other non-public information with respect to the
Borrower and the Servicer, and their respective businesses obtained by such
party in connection with the structuring, negotiating and execution of the
transactions contemplated herein, in each case except (a) as may be required or
appropriate in communications with its respective independent certified public
accountants, legal advisors, or with independent financial rating agencies, (b)
as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal regulatory body having or claiming
to have jurisdiction over it, (c) as may be required or appropriate in response
to any summons or subpoena or in connection with any litigation, (d) as may be
required by or in order to comply with any law, order, regulation or ruling
including, without limitation, the federal securities laws, (e) as may be
required or appropriate in connection with disclosures to any and all persons,
without limitation of any kind, of information relating in the tax treatment and
tax structure of the transaction and all materials of any kind (including
opinions and other tax analyses) that are provided to the Lenders, the Borrower
or any of the Originators relating to such tax treatment and tax structure, (f)
in the case of any Bank, any Issuer, each Managing Agent or the Administrative
Agent, to any Liquidity Bank or provider of credit support to an Issuer, any
dealer or placement agent for such Issuer's commercial paper, and any actual or
potential assignee of, or participant in, any of the rights or obligations of
such Lender, or (g) in the case of any Issuer, any Managing Agent or the
Administrative Agent, to any Person whom any dealer or placement agent for such
Issuer shall have identified as an actual or potential investor in Commercial
Paper Notes; provided that any proposed recipient under clause (e), (f) or (g)
shall, as a condition to the receipt of any such information, agree to maintain
the confidentiality thereof; provided, further that all other disclosures shall
require the prior written consent of the relevant party.
13.16. Recourse Against Directors, Officers, Etc.
The Obligations are solely the entity obligations of the Borrower. No
recourse for the Obligations shall be had hereunder against any director,
officer, employee (in its capacity as such, and not as Servicer), trustee, agent
or any Person owning, directly or indirectly, any legal or beneficial interest
in the Borrower (in its capacity as such owner, and not as Servicer or otherwise
as a party to any Transaction Document). This Section 13.16 shall not, however,
(a) constitute a waiver, release or impairment of the Obligations, or (b) affect
the validity or enforceability of any other Transaction Document to which the
Originators, the Servicer, the Performance Guarantors or any of their Affiliates
are a party.
102
13.17. Waiver of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, THE NOTES, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT,
INSTRUMENT OR DOCUMENT DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING
IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OTHER TRANSACTION DOCUMENT
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
13.18. Consent to Jurisdiction; Waiver of Immunities.
EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
(a) IT IRREVOCABLY (i) SUBMITS TO THE JURISDICTION, FIRST, OF ANY
UNITED STATES FEDERAL COURT, AND, SECOND, IF FEDERAL JURISDICTION IS NOT
AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER CASE SITTING IN NEW YORK CITY,
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, (ii)
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY OTHER
COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE
DEFENSE OF AN INCONVENIENT FORUM TO MAINTENANCE OF SUCH ACTION OR PROCEEDING.
(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM THE
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH
THIS AGREEMENT.
13.19. Costs, Expenses and Taxes.
In addition to its obligations under Articles II and X, the Borrower
agrees to pay on demand:
(a) (i) all reasonable costs and expenses incurred by the
Administrative Agent, the Managing Agents and the Lenders, in connection with
the negotiation, preparation, execution and delivery or the administration
(including periodic auditing) of this Agreement, the Notes, the other
Transaction Documents, and, to the extent related to this Agreement, the Program
Documents (including any amendments or modifications of or supplements to the
Program Documents entered into in connection herewith), and any amendments,
consents or waivers executed in connection therewith, including, without
limitation, (A) the fees and expenses of outside counsel to any of such Persons
incurred in connection with any of the
103
foregoing or in advising such Persons as to their respective rights and remedies
under any of the Transaction Documents or (to the extent related to this
Agreement) the Program Documents, and (B) all out-of-pocket expenses (including
fees and expenses of independent accountants) incurred in connection with any
review of the books and records of the Borrower or the Servicer either prior to
the execution and delivery hereof or pursuant to Section 6.8, and (ii) all costs
and expenses actually incurred by the Administrative Agent, the Managing Agents
and the Lenders, in connection with the enforcement of, or any breach of, this
Agreement, the Notes, the other Transaction Documents and, to the extent related
to this Agreement, the Program Documents (including any amendments or
modifications of or supplements to the Program Documents entered into in
connection herewith), including, without limitation, the fees and expenses of
outside counsel to any of such Persons incurred in connection therewith,
including without limitation, with respect to each Issuer, the cost of rating
the Commercial Paper Notes by the Rating Agencies and the reasonable fees and
out-of-pocket expenses of counsel to each Issuer; and
(b) all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement, the Notes, the other Transaction Documents or (to the extent related
to this Agreement) the Program Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
13.20. Entire Agreement.
THE NOTES, THIS AGREEMENT, AND THE OTHER TRANSACTION DOCUMENTS EXECUTED
AND DELIVERED AS OF EVEN DATE HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES HERETO AND THERETO ANY MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. TO THE EXTENT THAT ANY PROVISIONS
OF THE TRANSACTION DOCUMENTS ARE INCONSISTENT WITH THE TERMS OF THIS AGREEMENT,
THIS AGREEMENT SHALL CONTROL.
13.21. Excess Funds.
An Issuer shall not be obligated to pay any amount pursuant to this
Agreement unless such Issuer has excess cash flow from operations or has
received funds with respect to such obligation which may be used to make such
payment and which funds or excess cash flow are not required to repay when due
its Commercial Paper Note or other short term funding backing its Commercial
Paper Notes, and after giving effect to such payment either (i) the Issuer could
issue Commercial Paper Notes to refinance all of is outstanding Commercial Paper
Notes (assuming such Commercial Paper Notes matured at such time) in accordance
with the program documents governing such Issuer's securitization program, or
(ii) all of Issuer's Commercial Paper Notes are paid in full. Any amount which
an Issuer does not pay pursuant to the operation of the preceding sentence shall
not constitute a claim, as defined in Section 101(5) of the United States
Bankruptcy Code, against such Issuer for any such insufficiency unless and until
such Issuer does have excess cash flow or excess funds.
104
[Signatures appear on the following page.]
105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BORROWER AHM SPV I, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Secretary
SERVICER AMERICAN HOME MORTGAGE SERVICING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President, General
Counsel & Secretary
ISSUERS LA FAYETTE ASSET SECURITIZATION LLC
By: Calyon New York Branch, as
Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
Title: ▇▇▇▇▇▇ ▇▇▇▇▇, Director
By: /s/ Kostantina Kourmpetis
-----------------------------------------------
Title: Kostantina Kourmpetis, Managing
Director
▇▇▇▇▇▇ CAPITAL LLC
By:
----------------------------------------------
Title: President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Title: Vice President
AMSTERDAM FUNDING CORPORATION
By:
----------------------------------------------
Title: Vice President
By:
----------------------------------------------
Title: Vice President
PARK AVENUE RECEIVABLES COMPANY
By:
----------------------------------------------
Title: Managing Director
By:
----------------------------------------------
Title:
BANKS AND
MANAGING AGENTS CALYON NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
By: /s/ Kostantina Kourmpetis
-----------------------------------------------
Name: Kostantina Kourmpetis
Title: Managing Director
SOCIETE GENERALE
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------------
Title: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------
Title: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
ABN AMRO BANK N.V.
By:
-----------------------------------------------
Title: SVP
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Director
BANK LLOYDS TSB BANK PLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President - Structured
Finance
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director - Structured Finance
JPMORGAN CHASE BANK, N.A.
By:
-----------------------------------------------
Title: Managing Director
By:
-----------------------------------------------
Title:
ADMINISTRATIVE AGENT CALYON NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
By: /s/ Kostantina Kourmpetis
-----------------------------------------------
Name: Kostantina Kourmpetis
Title: Managing Director
[American Home Mortgage Amended and Restated Loan Agreement - Exhibits]
SCHEDULE I
BANK COMMITMENTS AND PERCENTAGES
--------------------------------
Bank Bank Commitment Bank Commitment
---- --------------- Percentage
----------
ABN AMRO BANK N.V. $250,000,000 100%
CALYON NEW YORK BRANCH $300,000,000 75%
LLOYDS TSB BANK PLC $100,000,000 25%
JPMORGAN CHASE BANK $250,000,000 100%
SOCIETE GENERALE $250,000,000 100%
Issuer Issuer Facility
------ Amount
------
AMSTERDAM FUNDING CORPORATION $250,000,000
▇▇▇▇▇▇ CAPITAL LLC $250,000,000
LA FAYETTE ASSET SECURITIZATION LLC $400,000,000
PARK AVENUE RECEIVABLES COMPANY $250,000,000
I-1