EXHIBIT 10.3
EXECUTION VERSION
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MASTER REPURCHASE AGREEMENT
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as
buyer ("Buyer", which term shall include any
"Principal"
as defined and provided for in Annex I) or as agent pursuant hereto ("Agent"),
THE NEW YORK MORTGAGE COMPANY, LLC
as seller ("Seller"), and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as
individual guarantors (the "Guarantors")
Dated October 2, 2002
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TABLE OF CONTENTS
Page
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1. Applicability...........................................................1
2. Definitions.............................................................1
3. Program; Initiation of Transactions....................................18
4. Repurchase.............................................................19
5. Price Differential.....................................................20
6. Margin Maintenance.....................................................20
7. Income Payments........................................................21
8. Security Interest......................................................22
9. Payment and Transfer...................................................22
10. Conditions Precedent...................................................22
11. Program; Costs.........................................................25
12. Servicing..............................................................26
13. Representations and Warranties.........................................27
14. Covenants..............................................................32
15. Events of Default......................................................36
16. Remedies Upon Default..................................................38
17. Reports................................................................40
18. Repurchase Transactions................................................42
19. Single Agreement.......................................................43
20. Notices and Other Communications.......................................43
21. Entire Agreement; Severability.........................................44
22. Non assignability......................................................45
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23. Set-off................................................................45
24. Binding Effect; Governing Law; Jurisdiction............................45
25. No Waivers, Etc........................................................46
26. Intent.................................................................46
27. Disclosure Relating to Certain Federal Protections.....................47
28. Power of Attorney......................................................47
29. Buyer May Act Through Affiliates.......................................47
30. Indemnification; Obligations...........................................47
31. Counterparts...........................................................48
32. Confidentiality........................................................48
33. Recording of Communications............................................49
34. Non-Utilization Fee....................................................49
35. Periodic Due Diligence Review..........................................49
36. Authorizations.........................................................50
SCHEDULES
Schedule 1 - Representations and Warranties with Respect to Purchased Mortgage
Loans
Schedule 2 - Authorized Representatives
ANNEXES
Annex I - Buyer Acting as Agent
Annex II - Non-Utilization Fee Formula
EXHIBITS
Exhibit A - Form of Transaction Request
Exhibit B - Form of Purchase Confirmation
Exhibit C - Form of Mortgage Loan Schedule and Exception Report
Exhibit D - Form of Officer's Compliance Certificate
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Exhibit E - Form of Guaranty
Exhibit F - Form of Opinion of Seller's and Guarantors' counsel
Exhibit H - List of Preferred Takeout Investors
Exhibit I - Officer's Certificate of the Seller
Exhibit J - Seller's Tax Identification Number
Exhibit K - Existing Indebtedness
Exhibit L - RESERVED
Exhibit M - Escrow Instruction Letter
Exhibit N - Custodial and Bank Fee Schedule
Exhibit O - Form of Servicer Notice
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1. APPLICABILITY
From time to time the parties hereto may enter into
transactions in which Seller agrees to transfer to Buyer Mortgage Loans (as
hereinafter defined) against the transfer of funds by Buyer, with a simultaneous
agreement by Buyer to transfer to Seller such Mortgage Loans at a date certain
or on demand, against the transfer of funds by Seller. Each such transaction
shall be referred to herein as a "Transaction" and, unless otherwise agreed in
writing, shall be governed by this Agreement, including any supplemental terms
or conditions contained in any annexes identified herein, as applicable
hereunder.
2. DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
"Acceptable State" means any state acceptable pursuant to
Seller's Underwriting Guidelines.
"Accepted Servicing Practices" means, with respect to any
Mortgage Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.
"Act of Insolvency" means, with respect to any Person or its
Affiliates, (i) the filing of a petition, commencing, or authorizing the
commencement of any case or proceeding, or the voluntary joining of any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law relating to the protection of creditors, or suffering
any such petition or proceeding to be commenced by another which is consented
to, not timely contested or results in entry of an order for relief; (ii) the
seeking of the appointment of a receiver, trustee, custodian or similar official
for such party or an Affiliate or any substantial part of the property of
either; (iii) the appointment of a receiver, conservator, or manager for such
party or an Affiliate by any governmental agency or authority having the
jurisdiction to do so; (iv) the making or offering by such party or an Affiliate
of a composition with its creditors or a general assignment for the benefit of
creditors; (v) the admission by such party or an Affiliate of such party of its
inability to pay its debts or discharge its obligations as they become due or
mature; or (vi) that any governmental authority or agency or any person, agency
or entity acting or purporting to act under governmental authority shall have
taken any action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the property of such party or of any
of its Affiliates, or shall have taken any action to displace the management of
such party or of any of its Affiliates or to curtail its authority in the
conduct of the business of such party or of any of its Affiliates.
"Adjusted Tangible Net Worth" means, for any Person, Net Worth
of such Person plus 1% of the outstanding servicing portfolio balance of such
Person plus Subordinated Debt (provided that Subordinated Debt shall not be
taken into account to the extent that it would be greater than 25% of Adjusted
Tangible Net Worth to be comprised of Subordinated Debt), minus
all intangible assets, including capitalized servicing rights, goodwill,
patents, tradenames, trademarks, copyrights, franchises, any organization
expenses, deferred expenses, receivables from shareholders, Affiliates or
employees, and any other asset as shown as an intangible asset on the balance
sheet of the Seller on a consolidated basis as determined at a particular date
in accordance with GAAP.
"Affiliate" means, with respect to any Person, any "affiliate"
of such Person, as such term is defined in the Bankruptcy Code.
"Aged Loan" means a Mortgage Loan which has been subject to a
Transaction hereunder for a period of greater than 60 days but not greater than
90 days.
"Agency" means ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or GNMA, as applicable.
"Agency Security" means a mortgage-backed security issued by
an Agency.
"Agent" means Credit Suisse First Boston Mortgage Capital LLC
or any affiliate or successor thereto.
"Agreement" means this Master Repurchase Agreement, as it may
be amended, supplemented or otherwise modified from time to time.
"Alt A Mortgage Loan" means a first lien Mortgage Loan
originated in accordance with the criteria established by Buyer for Alt-A
Mortgage Loans, as approved by Buyer in its sole discretion and which has a FICO
score of at least 600.
"Appraised Value" means the value set forth in an appraisal
made in connection with the origination of the related Mortgage Loan as the
value of the Mortgaged Property.
"Asset Tape" means a remittance report on a monthly basis or
requested by Buyer pursuant to Section 17d hereof containing servicing
information, including, without limitation, those fields reasonably requested by
Buyer from time to time, on a loan-by-loan basis and in the aggregate, with
respect to the Purchased Mortgage Loans serviced by Seller or any Servicer for
the month (or any portion thereof) prior to the Reporting Date.
"Assignment of Mortgage" means an assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form, sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect the sale of the Mortgage to Buyer.
"Bailee Letter" has the meaning assigned to such term in the
Custodial Agreement.
"Bankruptcy Code" means the United States Bankruptcy Code of
1978, as amended from time to time.
"Bid" has the meaning set forth in Section 4(c) hereof.
"Bid Fee" has the meaning set forth in Section 4(c) hereof.
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"Business Day" means any day other than (A) a Saturday or
Sunday and (B) a public or bank holiday in New York City.
"Buyer" means Credit Suisse First Boston Mortgage Capital LLC,
and any successor hereunder.
"Buyer's Margin Amount" means with respect to any Transaction
as of any date of determination, an amount equal to the product of (A) Buyer's
Margin Percentage and (B) the Purchase Price for such Transaction.
"Buyer's Margin Percentage" means, with respect to any
Transaction as of any date, a percentage equal to the percentage obtained by
dividing the (A) Market Value of the Purchased Mortgage Loans on the Purchase
Date for such Transaction by (B) the Purchase Price on the Purchase Date for
such Transaction; provided, that, with respect to any Mortgage Loan which was
not an Exception Mortgage Loan on the related Purchase Date and which, as of the
date of determination, is an Exception Mortgage Loan, Buyer's Margin Percentage
as of such date of determination shall be equal to the percentage obtained by
dividing (A) the Market Value of such Mortgage Loan on the related Purchase Date
by (B) the amount the Purchase Price would have been on the Purchase Date if
such Mortgage Loan had been categorized as the type of Mortgage Loan (e.g.,
Exception Mortgage Loan, etc.) that it is categorized on the date of
determination.
"Capital Lease Obligations" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Change in Control" means:
(A) any transaction or event as a result of which the
Guarantors cease to own, collectively, beneficially or of record, 51%
of the stock of Seller;
(B) the sale, transfer, or other disposition of all or
substantially all of Seller's assets (excluding any such action taken
in connection with any securitization transaction); or
(C) the consummation of a merger or consolidation of Seller
with or into another entity or any other corporate reorganization, if
more than 50% of the combined voting power of the continuing or
surviving entity's stock outstanding immediately after such merger,
consolidation or such other reorganization is owned by persons who were
not stockholders of Seller immediately prior to such merger,
consolidation or other reorganization.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collection Account" means one or more accounts established by
the Servicer for the benefit of Buyer, into which all collections and proceeds
on or in respect of the Mortgage Loans shall be deposited by Servicer.
"Committed Mortgage Loan" means a Mortgage Loan which is the
subject of a Take-out Commitment with a Take-out Investor.
"Conforming Mortgage Loan" means a first lien Mortgage Loan
originated in accordance with the criteria of an Agency for purchase of Mortgage
Loans, including, without limitation, conventional Mortgage Loans, FHA Loans and
VA Loans, as determined by Buyer in its sole discretion.
"Consolidated" means for any Person, and any calculation, such
Person and its consolidated Subsidiaries.
"Custodial Agreement" means the custodial agreement dated as
of the date hereof, among Seller, Buyer and Custodian as the same may be amended
from time to time.
"Custodian" means LaSalle Bank, National Association or such
other party specified by Buyer and agreed to by Seller, which approval shall not
be unreasonably withheld.
"Default" means an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Due Date" means the day of the month on which the Monthly
Payment is due on a Mortgage Loan, exclusive of any days of grace.
"E&O Insurance" means insurance coverage with respect to
employee dishonesty, forgery or alteration, theft, disappearance and
destruction, robbery and safe burglary, property (other than money and
securities) and computer fraud in an aggregate amount acceptable to ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ Mac.
"Effective Date" means the date upon which the conditions
precedent set forth in Section 10 shall have been satisfied.
"Electronic Tracking Agreement" means an Electronic Tracking
Agreement among Buyer, Seller, MERS and MERSCORP, Inc., to the extent
applicable.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any corporation or trade or business
that is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which Seller is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and
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Section 412(c)(11) of the Code and the lien created under Section 302(f) of
ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the
Code of which Seller is a member.
"Escrow Instruction Letter" means the Escrow Instruction
Letter from Seller to the Settlement Agent, in the form of Exhibit M hereto, as
the same may be modified, supplemented and in effect from time to time.
"Escrow Payments" means, with respect to any Mortgage Loan,
the amounts constituting ground rents, taxes, assessments, water rates, sewer
rents, municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
"Event of Default" has the meaning specified in Section 15
hereof.
"Event of Termination" means with respect to Seller (i) with
respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as
to which the PBGC has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified with 30 days of the occurrence of such
event, or (ii) the withdrawal of Seller or any ERISA Affiliate thereof from a
Plan during a plan year in which it is a substantial employer, as defined in
Section 4001(a)(2) of ERISA, or (iii) the failure by Seller or any ERISA
Affiliate thereof to meet the minimum funding standard of Section 412 of the
Code or Section 302 of ERISA with respect to any Plan, including, without
limitation, the failure to make on or before its due date a required installment
under Section 412(m) of the Code or Section 302(e) of ERISA, or (iv) the
distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by Seller or any ERISA Affiliate thereof to terminate
any plan, or (v) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss
of tax-exempt status of the trust of which such Plan is a part if Seller or any
ERISA Affiliate thereof fails to timely provide security to the Plan in
accordance with the provisions of said sections, or (vi) the institution by the
PBGC of proceedings under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or (vii) the receipt by Seller
or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action
of the type described in the previous clause (vi) has been taken by the PBGC
with respect to such Multiemployer Plan, or (viii) any event or circumstance
exists which may reasonably be expected to constitute grounds for Seller or any
ERISA Affiliate thereof to incur liability under Title IV of ERISA or under
Sections 412(c)(11) or 412(n) of the Code with respect to any Plan.
"Exception Mortgage Loan" means any Mortgage Loan which is
otherwise ineligible for purchase hereunder, or which otherwise becomes
ineligible for purchase hereunder and which is approved by Buyer in its sole
discretion; provided, however, that Seller shall pay to Buyer a fee of $25 with
respect to any such approval of an Exception Mortgage Loan other than a Wet-Ink
Mortgage Loan and $10 with respect to any such approval of an Exception Mortgage
Loan which is a Wet-Ink Mortgage Loan; and provided, that upon 30 days' notice
to the Seller, Buyer may change such Exception Mortgage Loan approval fee. The
Pricing Rate, Market Value, Purchase Price and Buyer's Margin Percentage with
respect to Exception Mortgage Loans shall be set in the sole discretion of
Buyer. Buyer may at any time, and in its sole
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discretion, no longer consider a Mortgage Loan an Exception Mortgage Loan, in
which case such Mortgage Loan shall have a Market Value of zero.
"Existing Indebtedness" has the meaning specified in Section
13(a)(23) hereof.
"▇▇▇▇▇▇ Mae" means ▇▇▇▇▇▇ ▇▇▇, the government sponsored
enterprise formerly known as the Federal National Mortgage Association.
"FHA" means the Federal Housing Administration, an agency
within the United States Department of Housing and Urban Development, or any
successor thereto, and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
"FHA Approved Mortgagee" means a corporation or institution
approved as a mortgagee by the FHA under the National Housing Act, as amended
from time to time, and applicable FHA Regulations, and eligible to own and
service mortgage loans such as the FHA Loans.
"FHA Loan" means a Mortgage Loan which is the subject of an
FHA Mortgage Insurance Contract.
"FHA Mortgage Insurance" means, mortgage insurance authorized
under the National Housing Act, as amended from time to time, and provided by
the FHA.
"FHA Mortgage Insurance Contract" means the contractual
obligation of the FHA respecting the insurance of a Mortgage Loan.
"FHA Regulations" means the regulations promulgated by the
Department of Housing and Urban Development under the National Housing Act, as
amended from time to time and codified in 24 Code of Federal Regulations, and
other Department of Housing and Urban Development issuances relating to FHA
Loans, including the related handbooks, circulars, notices and mortgagee
letters.
"FICO" means Fair ▇▇▇▇▇ & Co., or any successor thereto.
"Foreclosed Loan" means a Mortgage Loan, the property securing
which has been foreclosed upon by Seller.
"▇▇▇▇▇▇▇ Mac" means the Federal Home Loan Mortgage Corporation
or any successor thereto.
"GAAP" means generally accepted accounting principles in
effect from time to time in the United States of America and applied on a
consistent basis.
"GNMA" means the Government National Mortgage Association and
any successor thereto.
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"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions over
Seller, any Guarantor or Buyer, as applicable.
"Gross Margin" means, with respect to each adjustable rate
Mortgage Loan, the fixed percentage amount set forth in the related Mortgage
Note.
"Guarantee" means, as to any Person, any obligation of such
Person directly or indirectly guaranteeing any Indebtedness of any other Person
or in any manner providing for the payment of any Indebtedness of any other
Person or otherwise protecting the holder of such Indebtedness against loss
(whether by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise);
provided that the term "Guarantee" shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii) obligations to
make servicing advances for delinquent taxes and insurance or other obligations
in respect of a Mortgaged Property, to the extent required by Buyer. The amount
of any Guarantee of a Person shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have
correlative meanings.
"Guarantors" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, in
their capacity as personal guarantors under the Guaranty. The term "Guarantor"
shall mean these two persons respectively.
"Guaranty" means the guaranty of the Guarantors dated as of
the date hereof, pursuant to which each Guarantor fully and unconditionally
guarantees the obligations of the Seller hereunder.
"High Cost Mortgage Loans" means any Mortgage Loans classified
as (a) "high cost" loans under the Home Ownership and Equity Protection Act of
1994, as amended or (b) "high cost," "threshold," or "predatory" loans under any
other applicable state, federal or local law.
"Income" means with respect to any Purchased Mortgage Loan at
any time until repurchased by the Seller, any principal received thereon or in
respect thereof and all interest, dividends or other distributions thereon.
"Indebtedness" means, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business, so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
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Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for the account of such Person; (e) Capital Lease Obligations of such Person;
(f) obligations of such Person under repurchase agreements, sale/buy-back
agreements or like arrangements; (g) Indebtedness of others Guaranteed by such
Person; (h) all obligations of such Person incurred in connection with the
acquisition or carrying of fixed assets by such Person; and (i) Indebtedness of
general partnerships of which such Person is a general partner.
"Index" means, with respect to any adjustable rate Mortgage
Loan, the index identified on the Mortgage Loan Schedule and set forth in the
related Mortgage Note for the purpose of calculating the applicable Mortgage
Interest Rate.
"Interest Rate Adjustment Date" means the date on which an
adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan
becomes effective.
"Interest Rate Protection Agreement" means, with respect to
any or all of the Mortgage Loans, any short sale of a US Treasury Security, or
futures contract, or mortgage related security, or Eurodollar futures contract,
or options related contract, or interest rate swap, cap or collar agreement or
Take-out Commitment, or similar arrangement providing for protection against
fluctuations in interest rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, entered into by Seller and an
Affiliate of Buyer or such other party acceptable to Buyer in its sole
discretion, which agreement is acceptable to Buyer in its sole discretion.
"Jumbo Mortgage Loan" means an A quality first lien Mortgage
Loan which is not eligible for sale to an Agency.
"LIBOR" means for each day, the rate of interest (calculated
on a per annum basis) equal to the overnight British Bankers Association Rate as
reported on the display designated as "BBAM" "Page ▇▇▇ ▇▇" on Bloomberg (or such
other display as may replace "BBAM" "Page ▇▇▇ ▇▇" on Bloomberg) on such date of
determination, and if such rate shall not be so quoted, the rate per annum at
which Buyer is offered Dollar deposits at or about 11:00 a.m., (New York City
time), on such day, by prime banks in the interbank eurodollar market where the
eurodollar and foreign currency exchange operations in respect of its loans are
then being conducted for delivery on such day for an overnight period, and in an
amount comparable to the amount of the Purchase Price of Transactions to be
outstanding on such day.
"Lien" means any mortgage, lien, pledge, charge, security
interest or similar encumbrance.
"Margin Call" has the meaning specified in Section 6(a)
hereof.
"Margin Deadline" has the meaning specified in Section 6(b)
hereof.
"Margin Deficit" has the meaning specified in Section 6(a)
hereof.
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"Market Value" means, with respect to any Purchased Mortgage
Loan as of any date of determination, the whole-loan servicing released fair
market value of such Purchased Mortgage Loan on such date as determined by Buyer
(or an Affiliate thereof) in its sole discretion. Without limiting the
generality of the foregoing, Seller acknowledges that (a) in the event that a
Purchased Mortgage Loan is not subject to a Take-out Commitment, Buyer may deem
the Market Value for such Mortgage Loan to be no greater than par and (b) the
Market Value of a Purchased Mortgage Loan may be reduced to zero by Buyer if:
(i) a breach of a representation, warranty or covenant made by
Seller in this Agreement with respect to such Purchased Mortgage Loan
has occurred and is continuing;
(ii) such Purchased Mortgage Loan is a Non-Performing Mortgage
Loan;
(iii) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement (other than
to a Take-out Investor pursuant to a Bailee Letter) for a period in
excess of ten (10) calendar days;
(iv) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement to a Take-out
Investor pursuant to a Bailee Letter for a period in excess of 45
calendar days;
(v) such Purchased Mortgage Loan has been subject to a
Transaction hereunder for a period of greater than (a) 60 days for all
Mortgage Loans other than Aged Loans or (b) 90 days with respect to
each Aged Loan;
(vi) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan
for which the Mortgage File has not been delivered to the Custodian on
or prior to the seventh Business Day after the related Purchase Date;
(vii) when the Purchase Price for such Purchased Mortgage Loan
is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all Aged Loans that are Purchased Mortgage Loans exceeds $7.5
million;
(viii) when the Purchase Price for such Purchased Mortgage
Loan is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all Alt A Mortgage Loans that are Purchased Mortgage Loans
exceeds $12 million;
(ix) when the Purchase Price for such Purchased Mortgage Loan
is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all Second Lien Mortgage Loans that are Purchased Mortgage
Loans exceeds $2.5 million; or
(x) when the Purchase Price for such Purchased Mortgage Loan
is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all
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Wet-Ink Mortgage Loans that are Purchased Mortgage Loans exceeds 30% of
the Maximum Aggregate Purchase Price.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of Seller, any Guarantor or any
Affiliate that is a party to any Program Agreement taken as a whole; (b) a
material impairment of the ability of Seller, any Guarantor or any Affiliate
that is a party to any Program Agreement to perform under any Program Agreement
and to avoid any Event of Default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability of any Program Agreement
against Seller, any Guarantor or any Affiliate that is a party to any Program
Agreement.
"Maximum Aggregate Purchase Price" means FORTY MILLION DOLLARS
($40,000,000).
"MERS" means Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
"MERS System" means the system of recording transfers of
mortgages electronically maintained by MERS.
"Monthly Payment" means the scheduled monthly payment of
principal and interest on a Mortgage Loan.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or any
successors thereto.
"Mortgage" means each mortgage, assignment of rents, security
agreement and fixture filing, or deed of trust, assignment of rents, security
agreement and fixture filing, deed to secure debt, assignment of rents, security
agreement and fixture filing, or similar instrument creating and evidencing a
lien on real property and other property and rights incidental thereto.
"Mortgage File" means, with respect to a Mortgage Loan, the
documents and instruments relating to such Mortgage Loan and set forth in
Exhibit F to the Custodial Agreement.
"Mortgage Interest Rate" means the rate of interest borne on a
Mortgage Loan from time to time in accordance with the terms of the related
Mortgage Note.
"Mortgage Interest Rate Cap" means, with respect to an
adjustable rate Mortgage Loan, the limit on each Mortgage Interest Rate
adjustment as set forth in the related Mortgage Note.
"Mortgage Loan" means any Exception Mortgage Loan, Jumbo
Mortgage Loan, Alt A Mortgage Loan, Second Lien Mortgage Loan or Conforming
Mortgage Loan which is a closed-end, fixed or floating-rate, one-to-four-family
residential mortgage or home equity loan evidenced by a promissory note and
secured by a mortgage, which satisfies the requirements set forth in the
Underwriting Guidelines and Section 13(b) hereof; provided, however, that,
except as expressly approved in writing by Buyer, Mortgage Loans shall not
include any "high-LTV"
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loans (i.e., a mortgage loan having a loan-to-value ratio in excess of 100% or
in excess of such lower percentage set forth in the Underwriting Guidelines or
with respect to Second Lien Mortgage Loans, a combined loan-to value ratio, in
excess of the lower of (i) the percentage specified in the Underwriting
Guidelines or (ii) 100%) or any High Cost Mortgage Loans and; provided, further,
that the origination date with respect to such Mortgage Loan is no earlier than
thirty (30) days prior to the related Purchase Date.
"Mortgage Loan Documents" means the documents in the related
Mortgage File to be delivered to the Custodian.
"Mortgage Loan Schedule" means with respect to any Transaction
as of any date, a mortgage loan schedule in the form of either (a) Exhibit C
attached hereto or (b) a computer tape or other electronic medium generated by
Seller and delivered to Buyer and Custodian, which provides information
(including, without limitation, the information set forth on Exhibit C attached
hereto) relating to the Purchased Mortgage Loans in a format acceptable to
Buyer.
"Mortgage Loan Schedule and Exception Report" has the meaning
assigned to such term in the Custodial Agreement.
"Mortgage Note" means the promissory note or other evidence of
the indebtedness of a Mortgagor secured by a Mortgage.
"Mortgaged Property" means the real property securing
repayment of the debt evidenced by a Mortgage Note.
"Mortgagor" means the obligor or obligors on a Mortgage Note,
including any person who has assumed or guaranteed the obligations of the
obligor thereunder.
"Multiemployer Plan" means a multiemployer plan defined as
such in Section 3(37) of ERISA to which contributions have been or are required
to be made by Seller or any ERISA Affiliate and that is covered by Title IV of
ERISA.
"Net Income" means, for any period and any Person, the net
income of such Person for such period as determined in accordance with GAAP.
"Net Worth" means, with respect to any Person, an amount equal
to, on a consolidated basis, such Person's stockholder equity (determined in
accordance with GAAP).
"1934 Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Non-Performing Mortgage Loan" means (i) any Mortgage Loan for
which any payment of principal or interest is more than twenty-nine (29) days
past due, (ii) any Mortgage Loan with respect to which the related mortgagor is
in bankruptcy or (iii) any Mortgage Loan with respect to which the related
mortgaged property is in foreclosure.
"Notice Date" has the meaning given to it in Section 3(b)
hereof.
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"Obligations" means (a) all of Seller's indebtedness,
obligations to pay the Repurchase Price on the Repurchase Date, the Price
Differential on each Price Differential Payment Date, and other obligations and
liabilities, to Buyer, its Affiliates or Custodian arising under, or in
connection with, the Program Agreements, whether now existing or hereafter
arising; (b) any and all sums paid by Buyer or on behalf of Buyer in order to
preserve any Purchased Mortgage Loan or its interest therein; (c) in the event
of any proceeding for the collection or enforcement of any of Seller's
indebtedness, obligations or liabilities referred to in clause (a), the
reasonable expenses of retaking, holding, collecting, preparing for sale,
selling or otherwise disposing of or realizing on any Purchased Mortgage Loan,
or of any exercise by Buyer of its rights under the Program Agreements,
including, without limitation, attorneys' fees and disbursements and court
costs; and (d) all of Seller's indemnity obligations to Buyer or Custodian or
both pursuant to the Program Agreements.
"Olympus" means Olympus Servicing L.P., or any successor in
interest thereto.
"PBCG" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Plan" means an employee benefit or other plan established or
maintained by any Seller or any ERISA Affiliate and covered by Title IV of
ERISA, other than a Multiemployer Plan.
"Post Default Rate" means an annual rate of interest equal to
the greater of (a) the Pricing Rate plus 3% or (b) the Mortgage Interest Rate.
"Preferred Committed Mortgage Loan" means any Committed
Mortgage Loan subject to a Takeout Commitment with a Preferred Takeout Investor.
"Preferred Takeout Investor" means the Buyer-approved Takeout
Investors listed on Exhibit H hereto as supplemented from time to time at the
reasonable discretion of the Buyer; provided, that Buyer shall have the right to
notify the Sellers of its withdrawal of approval of any Preferred Takeout
Investor, in its reasonable discretion.
"Price Differential" means with respect to any Transaction as
of any date of determination, an amount equal to the product of (A) the Pricing
Rate for such Transaction and (B) the Purchase Price for such Transaction,
calculated daily on the basis of a 360-day year for the actual number of days
during the period commencing on (and including) the Purchase Date for such
Transaction and ending on (but excluding) the Repurchase Date.
"Price Differential Payment Date" means, with respect to a
Purchased Mortgage Loan, the 5th day of the month following the related Purchase
Date and each succeeding 5th day of the month thereafter; provided, that, with
respect to such Purchased Mortgage Loan, the final Price Differential Payment
Date shall be the related Repurchase Date; and provided, further, that
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if any such day is not a Business Day, the Price Differential Payment Date shall
be the next succeeding Business Day.
"Pricing Rate" means LIBOR plus:
(a) 1.125% with respect to Transactions the subject of which
are Conforming Mortgage Loans (other than Wet-Ink Mortgage Loans or
Aged Loans);
(b) 1.125% with respect to Transactions the subject of which
are Jumbo Mortgage Loans (other than Wet-Ink Mortgage Loans or Aged
Loans);
(c) 1.375% with respect to Transactions the subject of which
are Alt A Mortgage Loans (other than Wet-Ink Mortgage Loans or Aged
Loans);
(d) 1.375% with respect to Transactions the subject of which
are Second Lien Mortgage Loans (other than Wet-Ink Mortgage Loans or
Aged Loans); and
(e) 1.40% with respect to Transactions the subject of which
are Wet-Ink Mortgage Loans; and
(f) 2.00% with respect to Transactions the subject of which
are Aged Loans;
(g) the rate determined in the sole discretion of Buyer with
respect to Transactions the subject of which are Exception Mortgage
Loans and any other Transactions so identified by the Buyer in agreeing
to enter into a Transaction with respect to such Exception Mortgage
Loan
The Pricing Rate shall change in accordance with LIBOR, as
provided in Section 5(a).
"Principal" has the meaning given to it in Annex I.
"Program Agreements" means, collectively, the Custodial
Agreement, this Agreement, the Electronic Tracking Agreement, if entered into,
the Guaranty and, with respect to each Exception Mortgage Loan, a Purchase
Confirmation.
"Property" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Confirmation" means a confirmation of a Transaction,
in the form attached as Exhibit B hereto.
"Purchase Date" means the date on which Purchased Mortgage
Loans are to be transferred by Seller to Buyer.
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"Purchase Price" means the price at which each Purchased
Mortgage Loan is transferred by a Seller to Buyer, which shall equal:
(a) on the Purchase Date, in the case of Purchased Mortgage
Loans which are Jumbo Mortgage Loans, Conforming Mortgage Loans or Alt-A
Mortgage Loans the lesser of either: (x) the product of (1) the Market Value of
such Purchased Mortgage Loan multiplied by (2) the applicable Purchase Price
Percentage for such Mortgage Loan or (y) the outstanding principal amount
thereof as set forth on the related Mortgage Loan Schedule;
(b) on the Purchase Date, in the case of Purchased Mortgage
Loans which are Second Lien Mortgage Loans the lesser of either:
(i) (x) with respect to Mortgage Loans other than Preferred
Committed Mortgage Loans the product of (1) the outstanding principal amount
thereof as set forth in the Mortgage Loan Schedule multiplied by (2) the
applicable Purchase Price Percentage for such Mortgage Loan and (y) with respect
to Purchased Mortgage Loans which are Preferred Committed Mortgage Loans, the
outstanding principal amount thereof as set forth in the Mortgage Loan Schedule
or (ii) the product of (1) the Market Value of such Purchased Mortgage Loan
multiplied by (2) the applicable Purchase Price Percentage for such Mortgage
Loan; or
(c) on any day after the Purchase Date, except where Buyer and
the Seller agree otherwise, the amount determined under the immediately
preceding clauses (i) or (ii) decreased by the amount of any cash transferred by
the Seller to Buyer pursuant to Section 4(c) hereof or applied to reduce the
Seller's obligations under clause (ii) of Section 4(b) hereof or under Section 6
hereof.
"Purchase Price Percentage" means, with respect to each
Mortgage Loan, the following percentage, as applicable:
(a) 98% with respect to Purchased Mortgage Loans that are Alt
A Mortgage Loans;
(b) 98% with respect to Purchased Mortgage Loans that are
Jumbo Mortgage Loans;
(c) 98% with respect to Transactions the subject of which are
first lien Conforming Mortgage Loans;
(d) 96% with respect to Transactions the subject of which are
Second Lien Mortgage Loans; and
(e) with respect to Transactions the subject of which are
Exception Mortgage Loans, a percentage to be determined by Buyer in its
sole discretion.
"Purchased Mortgage Loans" means the collective reference to
Mortgage Loans together with the Repurchase Assets related to such Mortgage
Loans transferred by Seller to Buyer in a Transaction hereunder, listed on the
related Mortgage Loan Schedule attached to the
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related Transaction Request, which such Mortgage Loans the Custodian has been
instructed to hold pursuant to the Custodial Agreement.
"Qualified Insurer" means a mortgage guaranty insurance
company duly authorized and licensed where required by law to transact mortgage
guaranty insurance business and approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac.
"Qualified Originator" means an originator of Mortgage Loans
which is acceptable under the Underwriting Guidelines.
"Records" means all instruments, agreements and other books,
records, and reports and data generated by other media for the storage of
information maintained by Seller or Servicer or any other person or entity with
respect to a Purchased Mortgage Loan. Records shall include the Mortgage Notes,
any Mortgages, the Mortgage Files, the credit files related to the Purchased
Mortgage Loan and any other instruments necessary to document or service a
Mortgage Loan.
"REO Property" means real property acquired by Seller,
including a Mortgaged Property acquired through foreclosure of a Mortgage Loan
or by deed in lieu of such foreclosure.
"Reporting Date" means the 5th day of each month or, if such
day is not a Business Day, the next succeeding Business Day.
"Repurchase Assets" has the meaning assigned thereto in
Section 8 hereof.
"Repurchase Date" means the earlier of (i) the Termination
Date, (ii) the date set forth in the applicable Purchase Confirmation, (iii) the
date determined by application of Section 16 hereof or (iv) the date identified
to Buyer by Seller as the date that the related Mortgage Loan is to be sold
pursuant to a Take-out Commitment.
"Repurchase Price" means the price at which Purchased Mortgage
Loans are to be transferred from Buyer to Seller upon termination of a
Transaction, which will be determined in each case (including Transactions
terminable upon demand) as the sum of the Purchase Price and the accrued but
unpaid Price Differential as of the date of such determination.
"Request for Certification" means a notice sent to the
Custodian reflecting the sale of one or more Purchased Mortgage Loans to Buyer
hereunder.
"Requirement of Law" means, with respect to any Person, any
law, treaty, rule or regulation or determination of an arbitrator, a court or
other governmental authority, applicable to or binding upon such Person or any
of its property or to which such Person or any of its property is subject.
"Responsible Officer" means shall mean, as to any Person, the
chief executive officer or, with respect to financial matters, the chief
financial officer of such Person.
"S&P" means Standard & Poor's Ratings Services, or any
successor thereto.
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"SEC" means the Securities and Exchange Commission, or any
successor thereto.
"Second Lien Mortgage Loan" means a Mortgage Loan which is has
a second lien on the related Mortgaged Property.
"Seller" means The New York Mortgage Company, LLC or its
permitted successors and assigns.
"Servicer" means Olympus, or any other servicer approved by
Buyer in its sole discretion, which may be Seller.
"Settlement Agent" means, with respect to any Transaction the
subject of which is a Wet-Ink Mortgage Loan, the entity approved by Buyer, in
its sole good-faith discretion, which may be a title company, escrow company or
attorney in accordance with local law and practice in the jurisdiction where the
related Wet-Ink Mortgage Loan is being originated. A Settlement Agent is deemed
approved unless Buyer notifies Seller otherwise at any time electronically or in
writing.
"SIPA" means the Securities Investor Protection Act of 1970,
as amended from time to time.
"Subordinated Debt" means, Indebtedness of Seller which is (i)
unsecured, (ii) no part of the principal of such Indebtedness is required to be
paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) prior to the date which is one year following the
Termination Date and (iii) the payment of the principal of and interest on such
Indebtedness and other obligations of Seller in respect of such Indebtedness are
subordinated to the prior payment in full of the principal of and interest
(including post-petition obligations) on the Transactions and all other
obligations and liabilities of Seller to Buyer hereunder on terms and conditions
approved in writing by Buyer and all other terms and conditions of which are
satisfactory in form and substance to Buyer.
"Subsidiary" means, with respect to any Person, any
corporation, partnership or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person.
"Take-out Commitment" means a commitment of Seller to either
(a) sell one or more identified Mortgage Loans to a Take-out Investor or (b) (i)
swap one or more identified Mortgage Loans with a Take-out Investor that is an
Agency for an Agency Security, and (ii) sell the related Agency Security to a
Take-out Investor, and in each case, the corresponding Take-out Investor's
commitment back to Seller to effectuate any of the foregoing, as applicable.
With respect to any Take-out Commitment with an Agency, the applicable agency
documents list Buyer as sole subscriber.
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"Take-out Investor" means (i) an Agency or (ii) other
institution which has made a Take-out Commitment and has been approved by Buyer.
"Termination Date" means the earlier of (a) October 1, 2003,
and (b) the date of the occurrence of an Event of Default.
"Test Period" means any calendar quarter.
"Transaction" has the meaning set forth in Section 1 hereof.
"Transaction Request" means a request from Seller to Buyer, in
the form attached as Exhibit A hereto, to enter into a Transaction.
"Trust Receipt and Certification" means, with respect to any
Transaction as of any date, a receipt and certification in the form attached as
an exhibit to the Custodial Agreement.
"Underwriting Guidelines" means the standards, procedures and
guidelines of Agencies and any Takeout Investor or Investors listed on Exhibit G
hereto for underwriting and acquiring Mortgage Loans, which guidelines as
acceptable to Buyer in its sole discretion.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect on the date hereof in the State of New York or the Uniform Commercial
Code as in effect in the applicable jurisdiction.
"VA" means the U.S. Department of Veterans Affairs, an agency
of the United States of America, or any successor thereto including the
Secretary of Veterans Affairs.
"VA Approved Lender" means a lender which is approved by the
VA to act as a lender in connection with the origination of VA Loans.
"VA Loan" means a Mortgage Loan which is subject of a VA Loan
Guaranty Agreement as evidenced by a VA Loan Guaranty Agreement, or a Mortgage
Loan which is a vender loan sold by the VA.
"VA Loan Guaranty Agreement" means the obligation of the
United States to pay a specific percentage of a Mortgage Loan (subject to a
maximum amount) upon default of the Mortgagor pursuant to the Servicemen's
Readjustment Act, as amended.
"Violation Deadline" has the meaning assigned thereto in
Section 4(c) hereof.
"Wet-Ink Documents" means, with respect to any Wet-Ink
Mortgage Loan, the (a) Transaction Request and (b) Mortgage Loan Schedule.
"Wet-Ink Mortgage Loan" means a Mortgage Loan which Seller is
selling to Buyer simultaneously with the origination thereof.
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3. PROGRAM; INITIATION OF TRANSACTIONS
a. From time to time, in the sole discretion of Buyer, Buyer
will purchase from Seller certain Mortgage Loans that have been either
originated by Seller or purchased by Seller from other originators. THIS
AGREEMENT IS NOT A COMMITMENT BY BUYER TO ENTER INTO TRANSACTIONS WITH SELLER
BUT RATHER SETS FORTH THE PROCEDURES TO BE USED IN CONNECTION WITH PERIODIC
REQUESTS FOR BUYER TO ENTER INTO TRANSACTIONS WITH SELLER. SELLER HEREBY
ACKNOWLEDGES THAT BUYER IS UNDER NO OBLIGATION TO AGREE TO ENTER INTO, OR TO
ENTER INTO, ANY TRANSACTION PURSUANT TO THIS AGREEMENT; PROVIDED, THAT, BUYER
SHALL GIVE THE SELLER AT LEAST 60 DAYS PRIOR WRITTEN NOTICE OF ITS DECISION NOT
TO ENTER INTO ANY ADDITIONAL TRANSACTIONS HEREUNDER.. All Purchased Mortgage
Loans shall exceed or meet the Underwriting Guidelines, and shall be serviced by
Servicer. The aggregate Purchase Price of Purchased Mortgage Loans subject to
outstanding Transactions shall not exceed the Maximum Aggregate Purchase Price.
b. With respect to each Transaction involving Mortgage Loans
which are not Wet-Ink Mortgage Loans, Seller shall give Buyer and Custodian at
least 1 Business Day's prior notice of any proposed Purchase Date (the date on
which such notice is given, the "Notice Date"); provided, that if Seller is
delivering 25 or fewer Mortgage Loans, which are not Wet-Ink Mortgage Loans, on
a Purchase Date, the notice shall be delivered on or before 10:30 a.m. (New York
City time) on the Purchase Date. With respect to Wet-Ink Mortgage Loans, Seller
shall deliver notice of any proposed purchase on or before 3:00 p.m. (New York
City time) on the Purchase Date. On the Notice Date, Seller shall (i) request
that Buyer enter into a Transaction by furnishing to Buyer a Transaction
Request, (ii) deliver to Buyer and Custodian a Mortgage Loan Schedule and (iii)
deliver to Custodian a Request for Certification and each Mortgage File or
Wet-Ink Documents for each Wet-Ink Mortgage Loan in accordance with Section
10(b)(3) and otherwise comply with the procedures set forth herein. Following
receipt of such request, Buyer may enter into such requested Transaction or may
notify Seller of its intention not to enter into such Transaction. In the event
the Mortgage Loan Schedule provided by Seller contains erroneous computer data,
is not formatted properly or the computer fields are otherwise improperly
aligned, Buyer shall provide written or electronic notice to Seller describing
such error and Seller may either (a) give Buyer written or electronic authority
to correct the computer data, reformat the Mortgage Loans or properly align the
computer fields or (b) correct the computer data, reformat or properly align the
computer fields itself and resubmit the Mortgage Loan Schedule as required
herein. In the event that the Seller gives Buyer authority to correct the
computer data, reformat the Mortgage Loan Schedule or properly align the
computer fields, the Seller shall pay $10 per change and any other direct
expenses incurred by Buyer; provided, that upon 30 days' notice to the Sellers,
Buyer may change such computer correction fee. The Seller shall hold Buyer
harmless for such correction, reformatting or realigning, as applicable, except
as otherwise expressly provided herein.
c. With respect to each Exception Mortgage Loan, upon receipt
of the Transaction Request, Buyer shall, consistent with this Agreement, specify
the terms for such proposed Transaction, including the Purchase Price, the
Pricing Rate, the Market Value and the Repurchase Date in respect of such
Transaction. The terms thereof shall be set forth in the Purchase Confirmation
to be delivered to Seller on or prior to the Purchase Date.
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d. With respect to each Exception Mortgage Loan, the Purchase
Confirmation, together with this Agreement, shall constitute conclusive evidence
of the terms agreed between Buyer and Seller with respect to the Transaction to
which the Purchase Confirmation relates, and Seller's acceptance of the related
proceeds shall constitute Seller's agreement to the terms of such Purchase
Confirmation. It is the intention of the parties that, with respect to each
Exception Mortgage Loan, each Purchase Confirmation shall not be separate from
this Agreement but shall be made a part of this Agreement. In the event of any
conflict between this Agreement and, with respect to each Exception Mortgage
Loan, a Purchase Confirmation, the terms of the Purchase Confirmation shall
control with respect to the related Transaction.
e. Upon the satisfaction of the applicable conditions
precedent set forth in Section 10 hereof, all of Seller's interest in the
Repurchase Assets shall pass to Buyer on the Purchase Date, against the transfer
of the Purchase Price to Seller. Upon transfer of the Mortgage Loans to Buyer as
set forth in this Section and until termination of any related Transactions as
set forth in Sections 4 or 16 of this Agreement, ownership of each Mortgage
Loan, including each document in the related Mortgage File and Records, is
vested in Buyer; provided that, prior to the recordation by the Custodian as
provided for in the Custodial Agreement record title in the name of Seller to
each Mortgage shall be retained by Seller in trust, for the benefit of Buyer,
for the sole purpose of facilitating the servicing and the supervision of the
servicing of the Mortgage Loans.
f. With respect to each Wet-Ink Mortgage Loan, by no later
than 12:00 noon, (New York City time) on the seventh Business Day following the
applicable Purchase Date, Seller shall cause the related Settlement Agent to
deliver to the Custodian the remaining documents in the Mortgage File.
4. REPURCHASE
a. Seller shall repurchase the related Purchased Mortgage
Loans from Buyer on each related Repurchase Date. Such obligation to repurchase
exists without regard to any prior or intervening liquidation or foreclosure
with respect to any Purchased Mortgage Loan (but liquidation or foreclosure
proceeds received by Buyer shall be applied to reduce the Repurchase Price for
such Purchased Mortgage Loan on each Price Differential Payment Date except as
otherwise provided herein). Seller is obligated to repurchase and take physical
possession of the Purchased Mortgage Loans from Buyer or its designee (including
the Custodian) at Seller's expense on the related Repurchase Date.
b. Provided that no Default shall have occurred and is
continuing, and Buyer has received the related Repurchase Price upon repurchase
of the Purchased Mortgage Loans, Buyer agrees to release its ownership interest
hereunder in the Purchased Mortgage Loans (including, the Repurchase Assets
related thereto) at the request of Seller. With respect to payments in full by
the related Mortgagor of a Purchased Mortgage Loan, Seller agrees to (i) provide
Buyer with a copy of a report from the related Servicer indicating that such
Purchased Mortgage Loan has been paid in full, (ii) remit to Buyer, within two
Business Days, the Repurchase Price with respect to such Purchased Mortgage
Loans and (iii) provide Buyer a notice specifying each Purchased Mortgage Loan
that has been prepaid in full. Buyer agrees to release its ownership
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interest in Purchased Mortgage Loans which have been prepaid in full after
receipt of evidence of compliance with clauses (i) through (iii) of the
immediately preceding sentence.
c. In the event that at any time any Purchased Mortgage Loan
violates the applicable sublimit set forth in the definition of Market Value,
Buyer may, in its sole discretion, redesignate such Mortgage Loan as an
Exception Mortgage Loan. If Buyer does not redesignate such Mortgage Loan as an
Exception Mortgage Loan, and if Seller fails to notify Buyer within five (5)
Business Days following notice or knowledge of such violation that Seller does
not want to receive a bid for such Mortgage Loan as described below, Buyer or an
Affiliate of Buyer may offer to terminate Seller's right and obligation to
repurchase such Mortgage Loan by paying Seller a price to be set by Buyer in its
sole discretion (a "Bid"). Seller, within five (5) Business Days of receipt of
Buyer's bid (the "Violation Deadline") may, in its sole discretion, either (i)
accept Buyer's bid, terminating Seller's right to repurchase such Mortgage Loan
under this Agreement or (ii) immediately repurchase the Mortgage Loan at the
Repurchase Price in accordance with this Section 4. Seller shall pay Buyer a bid
fee equal to $250 (the "Bid Fee") with respect to each Mortgage Loan on which
Buyer or its Affiliate makes a Bid, regardless of whether the Bid is accepted
and such Bid Fee shall be due and payable to Buyer on or before the Violation
Deadline. Any amount paid by Buyer or its Affiliate to terminate Seller's right
to repurchase a Purchased Mortgage Loan if a Bid is accepted pursuant to this
Section shall be applied by Buyer toward the outstanding Repurchase Price for
the applicable Transaction.
5. PRICE DIFFERENTIAL.
a. On each Business Day that a Transaction is outstanding, the
Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid
Price Differential shall be settled in cash on each related Price Differential
Payment Date. Two Business Days prior to the Price Differential Payment Date,
Buyer shall give Seller written or electronic notice of the amount of the Price
Differential due on such Price Differential Payment Date. On the Price
Differential Payment Date, Seller shall pay to Buyer the Price Differential for
such Price Differential Payment Date (along with any other amounts to be paid
pursuant to Sections 7 and 34 hereof), by wire transfer in immediately available
funds.
b. If Seller fails to pay all or part of the Price
Differential by 3:00 p.m. (New York City time) on the related Price Differential
Payment Date, with respect to any Purchased Mortgage Loan, Seller shall be
obligated to pay to Buyer (in addition to, and together with, the amount of such
Price Differential) interest on the unpaid Repurchase Price at a rate per annum
equal to the Post Default Rate until the Price Differential is received in full
by Buyer.
6. MARGIN MAINTENANCE
a. If at any time the Market Value of any Purchased Mortgage
Loan subject to a Transaction is less than Buyer's Margin Amount for such
Transaction (a "Margin Deficit"), then Buyer may by notice to any Seller require
Seller to transfer to Buyer cash in an amount at least equal to the Margin
Deficit (such requirement, a "Margin Call") .
b. Notice delivered pursuant to Section 6(a) may be given by
any written means. Any notice given before 10:00 a.m. (New York City time) on a
Business Day shall be met, and the related Margin Call satisfied, no later than
5:00 p.m. (New York City time) on such Business Day; notice given after 10:00
a.m. (New York City time) on a Business Day shall be met, and
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the related Margin Call satisfied, no later than 5:00 p.m. (New York City time)
on the following Business Day (the foregoing time requirements for satisfaction
of a Margin Call are referred to as the "Margin Deadlines"). The failure of
Buyer, on any one or more occasions, to exercise its rights hereunder, shall not
change or alter the terms and conditions to which this Agreement is subject or
limit the right of Buyer to do so at a later date. Seller and Buyer each agree
that a failure or delay by Buyer to exercise its rights hereunder shall not
limit or waive Buyer's rights under this Agreement or otherwise existing by law
or in any way create additional rights for Seller.
7. INCOME PAYMENTS
a. If Income is paid in respect of any Purchased Mortgage Loan
during the term of a Transaction, such Income shall be the property of Buyer.
Notwithstanding the foregoing, and provided no Event of Default has occurred and
is continuing, Buyer agrees that if a third-party Servicer is in place for any
Purchased Mortgage Loans, such Servicer shall deposit such Income to the
Collection Account. Seller shall deposit all Income received in its capacity as
Servicer of any Purchased Mortgage Loans to the Collection Account in accordance
with Section 12(c) hereof.
b. Provided no Event of Default has occurred and is
continuing, on each Price Differential Payment Date, Seller shall remit to Buyer
an amount equal to the Price Differential out of the interest portion of the
Income paid in respect to the Purchased Mortgage Loans for the preceding month
in accordance with Section 5 of this Agreement. Upon termination of any
Transaction, to the extent that there is any excess Income after repayment of
all amounts to be transferred to Buyer by Seller, Buyer, in its sole option, may
apply the excess income to reduce the Repurchase Price due upon termination of
any other outstanding Transactions.
c. In the event that an Event of Default has occurred and is
continuing, notwithstanding any provision set forth herein, Seller shall remit
to Buyer all Income received with respect to each Purchased Mortgage Loan on the
related Price Differential Payment Date or on such other date or dates as Buyer
notifies Seller in writing.
d. Notwithstanding any provision to the contrary in this
Section 7, within two (2) Business Days of receipt by Seller of any prepayment
of principal in full, with respect to a Purchased Mortgage Loan, Seller shall
remit such amount to Buyer and Buyer shall immediately apply any such amount
received by Buyer to reduce the amount of the Repurchase Price due upon
termination of the related Transaction.
e. Notwithstanding anything to the contrary set forth herein,
upon notice by Buyer to Seller, Seller shall remit to Buyer all collections
received by Servicer or Seller on the Purchased Mortgage Loans in accordance
with Buyer's directions no later than the day on which aggregate collections of
principal and interest (excluding principal prepayments) on the Purchased
Mortgaged Loans reaches an amount to be indicated by Buyer in its sole
discretion.
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8. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be
sales and purchases and not loans, in the event any such Transactions are deemed
to be loans, Seller hereby pledges to Buyer as security for the performance by
Seller of its Obligations and hereby grants, assigns and pledges to Buyer a
fully perfected first priority security interest in the Purchased Mortgage
Loans, the Records, and all related servicing rights, the Program Agreements (to
the extent such Program Agreements and Seller's right thereunder relate to the
Purchased Mortgage Loans), any related Take-out Commitments, any Property
relating to the Purchased Mortgage Loans, all insurance policies and insurance
proceeds relating to any Purchased Mortgage Loan or the related Mortgaged
Property, including, but not limited to, any payments or proceeds under any
related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts
and VA Loan Guaranty Agreements (if any), Income, the Collection Account,
Interest Rate Protection Agreements, accounts (including any interest of Seller
in escrow accounts) and any other contract rights, instruments, accounts,
payments, rights to payment (including payments of interest or finance charges)
general intangibles and other assets relating to the Purchased Mortgage Loans
(including, without limitation, any other accounts) or any interest in the
Purchased Mortgage Loans, and any proceeds (including the related securitization
proceeds) and distributions with respect to any of the foregoing and any other
property, rights, title or interests as are specified on a Transaction Request
and/or Trust Receipt and Certification, in all instances, whether now owned or
hereafter acquired, now existing or hereafter created (collectively, the
"Repurchase Assets"). Seller agrees to execute, deliver and/or file such
documents and perform such acts as may be reasonably necessary to fully perfect
Buyer's security interest created hereby. Furthermore, the Seller hereby
authorizes the Buyer to file financing statements relating to the Repurchase
Assets, as the Buyer, at its option, may deem appropriate. The Seller shall pay
the filing costs for any financing statement or statements prepared pursuant to
this Section.
9. PAYMENT AND TRANSFER
Unless otherwise mutually agreed in writing, all transfers of
funds to be made by Seller hereunder shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to Buyer at the
following account maintained by Buyer: Account No. 3051-2445, for the account of
CSFB-Buyer/ NY Mortgage Seller -- Inbound, Citibank, ABA No. 021100089 or such
other account as Buyer shall specify to Seller in writing. Seller acknowledges
that it has no rights of withdrawal from the foregoing account. All Purchased
Mortgage Loans transferred by one party hereto to the other party shall be in
the case of a purchase by Buyer in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment in blank and
such other documentation as Buyer may reasonably request. All Purchased Mortgage
Loans shall be evidenced by a Trust Receipt and Certification. Any Repurchase
Price received by Buyer after 2:00 p.m. (New York City time) shall be deemed
received on the next succeeding Business Day.
10. CONDITIONS PRECEDENT
a. Initial Transaction. As conditions precedent to the initial
Transaction, Buyer shall have received on or before the day of such initial
Transaction the following, in form and
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substance satisfactory to Buyer and duly executed by Seller, the Guarantors and
each other party thereto:
(1) Program Agreements. The Program Agreements (including
without limitation the Guaranty, and a Custodial Agreement in a form
acceptable to Buyer) duly executed and delivered by the parties thereto
and being in full force and effect, free of any modification, breach or
waiver.
(2) Security Interest. Evidence that all other actions
necessary or, in the opinion of Buyer, desirable to perfect and protect
Buyer's interest in the Purchased Mortgage Loans and other Repurchase
Assets have been taken, including, without limitation, duly executed
and filed Uniform Commercial Code financing statements on Form UCC-1.
(3) Organizational Documents. A certificate of the corporate
secretary of Seller substantially in the form of Exhibit I hereto,
attaching certified copies of Seller's charter, bylaws and corporate
resolutions approving the Program Agreements and transactions
thereunder (either specifically or by general resolution) and all
documents evidencing other necessary corporate action or governmental
approvals as may be required in connection with the Program Agreements.
(4) Good Standing Certificate. A certified copy of a good
standing certificate of Seller, dated as of no earlier than the date 10
Business Days prior to the Purchase Date with respect to the initial
Transaction hereunder.
(5) Incumbency Certificate. An incumbency certificate of the
corporate secretary of Seller, certifying the names, true signatures
and titles of the representatives duly authorized to request
transactions hereunder and to execute the Program Agreements.
(6) Opinion of Counsel. An opinion of Seller's and each
Guarantor's counsel, in form and substance substantially as set forth
in Exhibit F attached hereto.
(7) Underwriting Guidelines. A true and correct copy of the
Underwriting Guidelines certified by an officer of Seller.
(8) Fees. Payment of any fees due to Buyer hereunder.
(9) Insurance. Evidence that Seller has added Buyer as a loss
payee under the Seller's E&O Insurance.
b. All Transactions. The obligation of Buyer to enter into
each Transaction pursuant to this Agreement is subject to the following
conditions precedent:
(1) Due Diligence Review. Without limiting the generality of
Section 35 hereof, Buyer shall have completed, to its satisfaction, its
due diligence review of the related Mortgage Loans and Seller.
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(2) Required Documents.
(a) With respect to each Purchased Mortgage Loan which is not
a Wet-Ink Mortgage Loan, the Mortgage File has been delivered to the
Custodian (i) with respect to any purchase of 25 or fewer Mortgage
Loans on a single Purchase Date, on or prior to 3:00 p.m. (New York
City time) on the Purchase Date, and (ii) with respect to any
purchase of 26 or more Mortgage Loans on a single Purchase Date, at
least 24 hours prior to the Purchase Date;
(b) With respect to each Wet-Ink Mortgage Loan, the Wet-Ink
Documents have been delivered to Buyer or Custodian, as the case may
be, by 3:00 p.m. (New York City time) on the Purchase Date.
(3) Transaction Documents. Buyer or its designee shall have received
on or before the day of such Transaction (unless otherwise specified in
this Agreement) the following, in form and substance satisfactory to Buyer
and (if applicable) duly executed:
(a) A Transaction Request delivered pursuant to Section 3(c)
hereof and a Purchase Confirmation.
(b) The Request for Certification and the related Mortgage
Loan Schedule and Exception Report, and the Trust Receipt.
(c) Such certificates, opinions of counsel or other documents
as Buyer may reasonably request.
(4) No Default. No Default or Event of Default shall have occurred
and be continuing;
(5) Requirements of Law. Buyer shall not have determined that the
introduction of or a change in any Requirement of Law or in the
interpretation or administration of any Requirement of Law applicable to
Buyer has made it unlawful, and no Governmental Authority shall have
asserted that it is unlawful, for Buyer to enter into Transactions with a
Pricing Rate based on LIBOR.
(6) Representations and Warranties. Both immediately prior to the
related Transaction and also after giving effect thereto and to the
intended use thereof, the representations and warranties made by Seller in
each Program Agreement shall be true, correct and complete on and as of
such Purchase Date in all material respects with the same force and effect
as if made on and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as
of such specific date).
(7) Electronic Tracking Agreement. To the extent Seller is selling
Mortgage Loans which are registered on the MERS(R) System, an Electronic
Tracking Agreement entered into, duly executed and delivered by the
parties thereto and being in full force and effect, free of any
modification, breach or waiver.
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(8) Material Adverse Change. None of the following shall have
occurred and/or be continuing:
(a) Credit Suisse First Boston, New York Branch's corporate
bond rating as calculated by S&P or ▇▇▇▇▇'▇ has been lowered or
downgraded to a rating below investment grade by S&P or ▇▇▇▇▇'▇;
(b) an event or events shall have occurred in the good faith
determination of Buyer resulting in the effective absence of a "repo
market" or comparable "lending market" for financing debt
obligations secured by mortgage loans or securities or an event or
events shall have occurred resulting in Buyer not being able to
finance Purchased Assets through the "repo market" or "lending
market" with traditional counterparties at rates which would have
been reasonable prior to the occurrence of such event or events; or
(c) an event or events shall have occurred resulting in the
effective absence of a "securities market" for securities backed by
mortgage loans or an event or events shall have occurred resulting
in Buyer not being able to sell securities backed by mortgage loans
at prices which would have been reasonable prior to such event or
events; or
(d) there shall have occurred a material adverse change in the
financial condition of Buyer which affects (or can reasonably be
expected to affect) materially and adversely the ability of Buyer to
fund its obligations under this Agreement.
11. PROGRAM; COSTS
a. Seller shall reimburse Buyer for any of Buyer's reasonable
out-of-pocket costs, including due diligence review costs and reasonable
attorney's fees, incurred by Buyer in determining the acceptability to Buyer of
any Mortgage Loans. Seller shall also pay, or reimburse Buyer if Buyer shall
pay, any termination fee, which may be due any servicer. Seller shall pay the
fees and expenses of Buyer's counsel in connection with the Program Agreements.
Legal fees for any subsequent amendments to this Agreement or related documents
shall be borne by Seller. Seller shall pay ongoing custodial and bank fees and
expenses as set forth on Exhibit N hereto, and any other ongoing fees and
expenses under any other Program Document.
b. If Buyer determines that, due to the introduction of, any change
in, or the compliance by Buyer with (i) any eurocurrency reserve requirement or
(ii) the interpretation of any law, regulation or any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be an increase in the cost to Buyer in engaging in
the present or any future Transactions, then Seller agrees to pay to Buyer, from
time to time, upon demand by Buyer (with a copy to Custodian) the actual cost of
additional amounts as specified by Buyer to compensate Buyer for such increased
costs.
c. With respect to any Transaction, Buyer may conclusively rely
upon, and shall incur no liability to Seller in acting upon, any request or
other communication that Buyer reasonably believes to have been given or made by
a person authorized to enter into a
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Transaction on Seller's behalf, whether or not such person is listed on the
certificate delivered pursuant to Section 10(a)(5) hereof. In each such case,
Seller hereby waives the right to dispute Buyer's record of the terms of the
Purchase Confirmation, request or other communication.
d. Notwithstanding the assignment of the Program Agreements with
respect to each Purchased Mortgage Loan to Buyer, Seller agrees and covenants
with Buyer to enforce diligently Seller's rights and remedies set forth in the
Program Agreements.
e. Any payments made by Seller or any Guarantor to Buyer shall be
free and clear of, and without deduction or withholding for, any taxes;
provided, however, that if such payer shall be required by law to deduct or
withhold any taxes from any sums payable to Buyer, then such payer shall (A)
make such deductions or withholdings and pay such amounts to the relevant
authority in accordance with applicable law, (B) pay to Buyer the sum that would
have been payable had such deduction or withholding not been made, and (C) at
the time Price Differential is paid, pay to Buyer all additional amounts as
specified by Buyer to preserve the after-tax yield Buyer would have received if
such tax had not been imposed.
12. SERVICING
a. Seller, on Buyer's behalf, shall contract with Servicer to, or if
Seller is the Servicer, Seller shall, service the Mortgage Loans consistent with
the degree of skill and care that Seller customarily requires with respect to
similar Mortgage Loans owned or managed by it and in accordance with Accepted
Servicing Practices. The Servicer shall (i) comply with all applicable Federal,
State and local laws and regulations, (ii) maintain all state and federal
licenses necessary for it to perform its servicing responsibilities hereunder
and (iii) not impair the rights of Buyer in any Mortgage Loans or any payment
thereunder. Buyer may terminate the servicing of any Mortgage Loan with the
then-existing servicer in accordance with Section 12(e) hereof.
b. Seller shall cause the Servicer to hold or cause to be held all
escrow funds collected by Servicer with respect to any Purchased Mortgage Loans
in trust accounts and shall apply the same for the purposes for which such funds
were collected.
c. Seller shall cause the Servicer to deposit all collections
received by Servicer on the Purchased Mortgage Loans in the Collection Account
no later than the 5th Business Day following receipt; provided, however, that
any amounts required to be remitted to Buyer shall be deposited in the
Collection Account on or prior to the day on which such remittance is to occur.
d. Upon Buyer's request, Seller shall provide promptly to Buyer (i)
a Servicer Notice addressed to and agreed to by the Servicer of the related
Purchased Mortgage Loans, advising such Servicer of such matters as Buyer may
reasonably request, including, without limitation, recognition by the Servicer
of Buyer's interest in such Purchased Mortgage Loans and the Servicer's
agreement that upon receipt of notice of an Event of Default from Buyer, it will
follow the instructions of Buyer with respect to the Purchased Mortgage Loans
and any related Income with respect thereto.
e. Upon the occurrence of an Event of Default hereunder or a
material default under the Servicing Agreement, Buyer shall have the right to
immediately terminate the
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Servicer's right to service the Purchased Mortgage Loans without payment of any
penalty or termination fee. Seller and the Servicer shall cooperate in
transferring the servicing of the Purchased Mortgage Loans to a successor
servicer appointed by Buyer in its sole discretion.
f. If Seller should discover that, for any reason whatsoever, Seller
or any entity responsible to Seller for managing or servicing any such Purchased
Mortgage Loan has failed to perform fully Seller's obligations under the Program
Agreements or any of the obligations of such entities with respect to the
Purchased Mortgage Loans, Seller shall promptly notify Buyer.
13. REPRESENTATIONS AND WARRANTIES
a. Each of Seller and each Guarantor represents and warrants to
Buyer as of the date hereof and as of each Purchase Date for any Transaction
that:
(1) Seller Existence. Seller has been duly organized and is validly
existing as a limited liability company in good standing under the laws of
the State of New York.
(2) Licenses. Seller is duly licensed or is otherwise qualified in
each jurisdiction in which it transacts business for the business which it
conducts and is not in default of any applicable federal, state or local
laws, rules and regulations unless, in either instance, the failure to
take such action is not reasonably likely (either individually or in the
aggregate) to cause a Material Adverse Effect and is not in default of
such state's applicable laws, rules and regulations. Seller has the
requisite power and authority and legal right to originate and purchase
Mortgage Loans (as applicable) and to own, sell and ▇▇▇▇▇ ▇ ▇▇▇▇ on all of
its right, title and interest in and to the Mortgage Loans, and to execute
and deliver, engage in the transactions contemplated by, and perform and
observe the terms and conditions of, this Agreement, each Program
Agreement and any Transaction Request or, if applicable, Purchase
Confirmation. Seller is an FHA Approved Mortgagee and VA Approved Lender.
(3) Power. Seller has all requisite corporate or other power, and
has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted, except where the lack of such licenses,
authorizations, consents and approvals would not be reasonably likely to
have a Material Adverse Effect.
(4) Due Authorization. Seller has all necessary corporate or other
power, authority and legal right to execute, deliver and perform its
obligations under each of the Program Agreements, as applicable. Each
Guarantor has the legal capacity to execute, deliver and perform its
obligations under each of the Program Agreements, as applicable. This
Agreement, any Transaction Request, Purchase Confirmation and the Program
Agreements have been (or, in the case of Program Agreements and any
Transaction Request, Purchase Confirmation not yet executed, will be) duly
authorized, executed and delivered by Seller and each Guarantor, all
requisite or other corporate action having been taken, and each is valid,
binding and enforceable against Seller and each Guarantor in accordance
with its terms except as such enforcement may be affected by bankruptcy,
by other insolvency laws, or by general principles of equity.
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(5) Financial Statements. The Seller has heretofore furnished to
Buyer a copy of (a) its Consolidated balance sheet and the Consolidated
balance sheets of its consolidated Subsidiaries for the fiscal year of the
Seller ended December 31, 2001 and the related Consolidated statements of
income and retained earnings and of cash flows for the Seller and its
consolidated Subsidiaries for such fiscal year, setting forth in each case
in comparative form the figures for the previous year, with the opinion
thereon of ▇▇▇▇▇▇, ▇▇▇▇▇ & Company LLP and (b) its Consolidated balance
sheet and the Consolidated balance sheets of its consolidated Subsidiaries
for the quarterly fiscal period of the Seller ended March 31, 2002 and the
related Consolidated statements of income and retained earnings and of
cash flows for the Seller and its consolidated Subsidiaries for such
quarterly fiscal period, setting forth in each case in comparative form
the figures for the previous year. All such financial statements are
complete and correct and fairly present, in all material respects, the
Consolidated financial condition of the Seller and its Subsidiaries and
the Consolidated results of its operations as at such dates and for such
fiscal periods, all in accordance with GAAP applied on a consistent basis.
Since March 31, 2002, there has been no material adverse change in the
consolidated business, operations or financial condition of the Seller and
its consolidated Subsidiaries taken as a whole from that set forth in said
financial statements nor is Seller aware of any state of facts which
(without notice or the lapse of time) would or could result in any such
material adverse change. The Seller has, on the date of the statements
delivered pursuant to this Section (the "Statement Date") no liabilities,
direct or indirect, fixed or contingent, matured or unmatured, known or
unknown, or liabilities for taxes, long-term leases or unusual forward or
long-term commitments not disclosed by, or reserved against in, said
balance sheet and related statements, and at the present time there are no
material unrealized or anticipated losses from any loans, advances or
other commitments of Seller except as heretofore disclosed to Buyer in
writing. Each Guarantor has heretofore furnished to Buyer a copy of its
annual personal financial statement and annual tax return for the year
ended December 31, 2001 and such financial statements are complete and
correct and fairly present, in all material respects, the financial
condition of each Guarantor as at such dates and for such fiscal period,
all in accordance with GAAP applied on a consistent basis. Since December
31, 2001, there has been no material adverse change in the financial
condition of each Guarantor from that set forth in said financial
statements nor is any Guarantor aware of any state of facts which (without
notice or the lapse of time) would or could result in any such material
adverse change.
(6) Event of Default. There exists no Event of Default under Section
15(b) hereof, which default gives rise to a right to accelerate
indebtedness as referenced in Section 15(b) hereof, under any mortgage,
borrowing agreement or other instrument or agreement pertaining to
indebtedness for borrowed money or to the repurchase of mortgage loans or
securities.
(7) Solvency. Each of Seller and Guarantor is solvent and will not
be rendered insolvent by any Transaction and, after giving effect to such
Transaction, will not be left with an unreasonably small amount of capital
with which to engage in its business. Neither Seller nor any Guarantor
intends to incur, nor does it believe that it has incurred, debts beyond
its ability to pay such debts as they mature and is not contemplating the
commencement of insolvency, bankruptcy, liquidation or consolidation
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proceedings or the appointment of a receiver, liquidator, conservator,
trustee or similar official in respect of such entity or any of its
assets. The amount of consideration being received by Seller upon the sale
of the Purchased Mortgage Loans to Buyer constitutes reasonably equivalent
value and fair consideration for such Purchased Mortgage Loans. Seller is
not transferring any Purchased Mortgage Loans with any intent to hinder,
delay or defraud any of its creditors.
(8) No Conflicts. The execution, delivery and performance by each of
Seller and each Guarantor of this Agreement, any Transaction Request or
Purchase Confirmation hereunder and the Program Agreements do not conflict
with any term or provision of the certificate of incorporation or by-laws
of Seller or any law, rule, regulation, order, judgment, writ, injunction
or decree applicable to Seller or either Guarantor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Seller or any Guarantor, which conflict would have a
Material Adverse Effect and will not result in any violation of any such
mortgage, instrument, agreement or obligation to which Seller or any
Guarantor is a party.
(9) True and Complete Disclosure. All information, reports,
exhibits, schedules, financial statements or certificates of Seller, any
Guarantor, or any Affiliate thereof or any of their officers furnished or
to be furnished to Buyer in connection with the initial or any ongoing due
diligence of Seller, any Guarantor, or any Affiliate or officer thereof,
negotiation, preparation, or delivery of the Program Agreements are true
and complete and do not omit to disclose any material facts necessary to
make the statements herein or therein, in light of the circumstances in
which they are made, not misleading. All financial statements have been
prepared in accordance with GAAP.
(10) Approvals. No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or
court is required under applicable law in connection with the execution,
delivery and performance by Seller or any Guarantor of this Agreement, any
Transaction Request, Purchase Confirmation and the Program Agreements.
(11) Litigation. There is no action, proceeding or investigation
pending with respect to which either the Seller or either Guarantor has
received service of process or, to the best of Seller's or either
Guarantor's knowledge threatened against it before any court,
administrative agency or other tribunal (A) asserting the invalidity of
this Agreement, any Transaction, Transaction Request, Purchase
Confirmation or any Program Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement,
any Transaction Request, Purchase Confirmation or any Program Agreement,
(C) makes a claim individually in an amount greater than $1 million or in
an aggregate amount greater than $3 million, (D) which requires filing
with the Securities and Exchange Commission in accordance with the 1934
Act or any rules thereunder or (E) which might materially and adversely
affect the validity of the Mortgage Loans or the performance by it of its
obligations under, or the validity or enforceability of, this Agreement,
any Transaction Request, Purchase Confirmation or any Program Agreement.
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(12) Material Adverse Change. There has been no material adverse
change in the business, operations, financial condition, properties or
prospects of Seller, Guarantor or their Affiliates since the date set
forth in the most recent financial statements supplied to Buyer.
(13) Ownership. Upon payment of the Purchase Price and the filing of
the financing statement and delivery of the Mortgage Files to the
Custodian and the Custodian's receipt of the related Request for
Certification, Buyer shall become the sole owner of the Purchased Mortgage
Loans and related Repurchase Assets, free and clear of all liens and
encumbrances.
(14) Underwriting Guidelines. The Underwriting Guidelines provided
to Buyer are the true and correct Underwriting Guidelines of Seller.
(15) Taxes. Seller and its Subsidiaries, and each Guarantor have
filed all Federal income tax returns and all other material tax returns
that are required to be filed by them and have paid all taxes due pursuant
to such returns or pursuant to any assessment received by any of them,
except for any such taxes as are being appropriately contested in good
faith by appropriate proceedings diligently conducted and with respect to
which adequate reserves have been provided. The charges, accruals and
reserves on the books of Seller and its Subsidiaries, and each Guarantor
in respect of taxes and other governmental charges are, in the opinion of
Seller or Guarantor, as applicable, adequate.
(16) Investment Company. Neither Seller nor any of its Subsidiaries
is an "investment company", or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as
amended.
(17) Chief Executive Office; Jurisdiction of Organization. On the
Effective Date, Seller's chief executive office, is, and has been, located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. On the
Effective Date, Seller's jurisdiction of organization is New York. Seller
shall provide Buyer with thirty days advance notice of any change in
Seller's principal office or place of business or jurisdiction. Seller has
no trade name. During the preceding five years, Seller has not been known
by or done business under any other name, corporate or fictitious, and has
not filed or had filed against it any bankruptcy receivership or similar
petitions nor has it made any assignments for the benefit of creditors.
(18) Location of Books and Records. The location where Seller keeps
its books and records, including all computer tapes and records relating
to the Purchased Mortgage Loans and the related Repurchase Assets is its
chief executive office.
(19) Adjusted Tangible Net Worth. On the Effective Date, Seller's
Adjusted Tangible Net Worth is not less than $4.3 Million.
(20) ERISA. Each Plan to which Seller or its Subsidiaries make
direct contributions, and, to the knowledge of Seller, each other Plan and
each Multiemployer Plan, is in compliance in all material respects with,
and has been administered in all
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material respects in compliance with, the applicable provisions of ERISA,
the Code and any other Federal or State law.
(21) Adverse Selection. Seller has not selected the Purchased
Mortgage Loans in a manner so as to adversely affect Buyer's interests.
(22) Agreements. Neither Seller nor any Subsidiary of Seller is a
party to any agreement, instrument, or indenture or subject to any
restriction materially and adversely affecting its business, operations,
assets or financial condition, except as disclosed in the financial
statements described in Section 13(a)(5) hereof. Neither Seller nor any
Subsidiary of Seller is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained
in any agreement, instrument, or indenture which default could have a
material adverse effect on the business, operations, properties, or
financial condition of Seller as a whole. No holder of any indebtedness of
Seller or of any of its Subsidiaries has given notice of any asserted
default thereunder.
(23) Other Indebtedness. All Indebtedness (other than Indebtedness
evidenced by this Agreement) of Seller existing on the date hereof is
listed on Exhibit K hereto (the "Existing Indebtedness").
(24) Agency Approvals. With respect to each Agency Security and to
the extent necessary, Seller is an FHA Approved Mortgagee, a VA Approved
Lender and a GNMA Approved Lender. Seller is also approved by ▇▇▇▇▇▇ ▇▇▇
as an approved lender and ▇▇▇▇▇▇▇ Mac as an approved seller/servicer, and,
to the extent necessary, approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act.
In each such case, Seller is in good standing, with no event having
occurred or Seller having any reason whatsoever to believe or suspect will
occur prior to the issuance of the Agency Security or the consummation of
the Take-out Commitment, as the case may be, including, without
limitation, a change in insurance coverage which would either make Seller
unable to comply with the eligibility requirements for maintaining all
such applicable approvals or require notification to the relevant Agency
or to the Department of Housing and Urban Development, FHA or VA. Should
Seller for any reason cease to possess all such applicable approvals, or
should notification to the relevant Agency or to the Department of Housing
and Urban Development, FHA or VA be required, Seller shall so notify Buyer
immediately in writing. Seller has adequate financial standing, servicing
facilities, procedures and experienced personnel necessary for the sound
servicing of mortgage loans of the same types as may from time to time
constitute Mortgage Loans and in accordance with Accepted Servicing
Practices.
(25) No Reliance. Each of Seller and each Guarantor has made its own
independent decisions to enter into the Program Agreements and each
Transaction and as to whether such Transaction is appropriate and proper
for it based upon its own judgment and upon advice from such advisors
(including without limitation, legal counsel and accountants) as it has
deemed necessary. Neither Seller nor any Guarantor is relying upon any
advice from Buyer as to any aspect of the Transactions, including without
limitation, the legal, accounting or tax treatment of such Transactions.
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b. With respect to every Purchased Mortgage Loan, each of Seller and
each Guarantor represents and warrants to Buyer as of the applicable Purchase
Date for any Transaction and each date thereafter that each representation and
warranty set forth on Schedule 1 is true and correct.
c. The representations and warranties set forth in this Agreement
shall survive transfer of the Purchased Mortgage Loans to Buyer and shall
continue for so long as the Purchased Mortgage Loans are subject to this
Agreement. Upon discovery by Seller, Servicer or Buyer of any breach of any of
the representations or warranties set forth in this Agreement, the party
discovering such breach shall promptly give notice of such discovery to the
others. Buyer has the right to require, in its unreviewable discretion, Seller
to repurchase within three (3) Business Days after receipt of notice from Buyer
any Purchased Mortgage Loan (i) for which a breach of one or more of the
representations and warranties referenced in Section 13(b) exists and which
breach has a material adverse effect on the value of such Mortgage Loan or the
interests of Buyer or (ii) which is determined by Buyer, in its good faith
discretion, to be unacceptable for inclusion in a securitization.
14. COVENANTS
Each of Seller and each Guarantor covenants with Buyer that, during the term of
this facility:
a. Adjusted Tangible Net Worth. Seller shall maintain an Adjusted
Tangible Net Worth of at least $4.3 million.
b. Indebtedness to Adjusted Tangible Net Worth Ratio. Seller's ratio
of Indebtedness to Adjusted Tangible Net Worth shall not exceed 20:1.
c. Litigation. Seller will promptly, and in any event within ten
(10) days after service of process on any of the following, give to Buyer notice
of all litigation, actions, suits, arbitrations, investigations (including,
without limitation, any of the foregoing which are threatened or pending) or
other legal or arbitrable proceedings affecting Seller or any of its
Subsidiaries or affecting any of the Property of any of them before any
Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Program Agreements or any action to be taken in
connection with the transactions contemplated hereby, (ii) makes a claim
individually in an amount greater than $1 million or in an aggregate amount
greater than $3 million, or (iii) which, individually or in the aggregate, if
adversely determined, could be reasonably likely to have a Material Adverse
Effect. Seller will promptly provide notice of any judgment, which with the
passage of time, could cause an Event of Default hereunder.
d. Prohibition of Fundamental Changes. Seller shall not enter into
any transaction of merger or consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation, winding up or dissolution) or
sell all or substantially all of its assets; provided, that Seller may merge or
consolidate with (a) any wholly owned subsidiary of Seller, or (b) any other
Person if Seller is the surviving corporation; and provided further, that if
after giving effect thereto, no Default would exist hereunder.
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e. Maintenance of Profitability. Seller shall not permit, for any
Test Period, Net Income for such Test Period, before income taxes for such Test
Period and distributions made during such Test Period, to be less than $1.00.
f. Servicer; Asset Tape. Upon the occurrence of any of the following
(a) the occurrence and continuation of an Event of Default, (b) upon any
Purchased Mortgage Loan becoming an Aged Loan, (c) the fifth Business Day of
each month, or (d) upon the request of Buyer, Seller shall cause Servicer to
provide to Buyer, electronically, in a format mutually acceptable to Buyer and
Seller, an Asset Tape by no later than the Reporting Date. Seller shall not
cause the Mortgage Loans to be serviced by any servicer other than a servicer
expressly approved in writing by Buyer, which approval shall be deemed granted
by Buyer with respect to Seller with the execution of this Agreement.
g. Insurance. Seller or its Affiliates, will continue to maintain,
for Seller and its Subsidiaries, insurance coverage with respect to employee
dishonesty, forgery or alteration, theft, disappearance and destruction, robbery
and safe burglary, property (other than money and securities) and computer fraud
in an aggregate amount acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac.
h. No Adverse Claims. Seller warrants and will defend, and shall
cause any Servicer to defend, the right, title and interest of Buyer in and to
all Purchased Mortgage Loans and the related Repurchase Assets against all
adverse claims and demands.
i. Assignment. Except as permitted herein, neither Seller nor any
Servicer shall sell, assign, transfer or otherwise dispose of, or grant any
option with respect to, or pledge, hypothecate or grant a security interest in
or lien on or otherwise encumber (except pursuant to the Program Agreements),
any of the Purchased Mortgage Loans or any interest therein, provided that this
Section shall not prevent any transfer of Purchased Mortgage Loans in accordance
with the Program Agreements.
j. Security Interest. Seller shall do all things necessary to
preserve the Purchased Mortgage Loans and the related Repurchase Assets so that
they remain subject to a first priority perfected security interest hereunder.
Without limiting the foregoing, Seller will comply with all rules, regulations
and other laws of any Governmental Authority and cause the Purchased Mortgage
Loans or the related Repurchase Assets to comply with all applicable rules,
regulations and other laws. Seller will not allow any default for which Seller
is responsible to occur under any Purchased Mortgage Loans or the related
Repurchase Assets or any Program Agreement and Seller shall fully perform or
cause to be performed when due all of its obligations under any Purchased
Mortgage Loans or the related Repurchase Assets and any Program Agreement.
k. Records.
(1) Seller shall collect and maintain or cause to be collected and
maintained all Records relating to the Purchased Mortgage Loans in
accordance with industry custom and practice for assets similar to the
Purchased Mortgage Loans, including those maintained pursuant to the
preceding subparagraph, and all such Records shall be in
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Custodian's possession unless Buyer otherwise approves. Seller will not
allow any such papers, records or files that are an original or an only
copy to leave Custodian's possession, except for individual items removed
in connection with servicing a specific Mortgage Loan, in which event
Seller will obtain or cause to be obtained a receipt from a financially
responsible person for any such paper, record or file. Seller or the
Servicer of the Purchased Mortgage Loans will maintain all such Records
not in the possession of Custodian in good and complete condition in
accordance with industry practices for assets similar to the Purchased
Mortgage Loans and preserve them against loss.
(2) For so long as Buyer has an interest in or lien on any Purchased
Mortgage Loan, Seller will hold or cause to be held all related Records in
trust for Buyer. Seller shall notify, or cause to be notified, every other
party holding any such Records of the interests and liens in favor of
Buyer granted hereby.
(3) Upon reasonable advance notice from Custodian or Buyer, Seller
shall (x) make any and all such Records available to Custodian or Buyer to
examine any such Records, either by its own officers or employees, or by
agents or contractors, or both, and make copies of all or any portion
thereof, and (y) permit Buyer or its authorized agents to discuss the
affairs, finances and accounts of Seller with its chief operating officer
and chief financial officer and to discuss the affairs, finances and
accounts of Seller with its independent certified public accountants.
l. Books. Seller shall keep or cause to be kept in reasonable detail
books and records of account of its assets and business and shall clearly
reflect therein the transfer of Purchased Mortgage Loans to Buyer.
m. Approvals. Seller shall maintain all licenses, permits or other
approvals necessary for Seller to conduct its business and to perform its
obligations under the Program Agreements, and Seller shall conduct its business
strictly in accordance with applicable law.
n. Material Change in Business. Seller shall not make any material
change in the nature of its business as carried on at the date hereof. There
shall be no material change in the senior management of Seller.
o. Underwriting Guidelines. Without the prior written consent of
Buyer, Seller shall not amend or otherwise modify the Underwriting Guidelines.
Without limiting the foregoing, in the event that Seller makes any amendment or
modification to the Underwriting Guidelines, Seller shall promptly deliver to
Buyer a complete copy of the amended or modified Underwriting Guidelines.
p. Distributions. Seller shall not pay any dividends greater than
Net Income in any given calendar year. If an Event of Default has occurred and
is continuing, Seller shall not pay any dividends with respect to any capital
stock or other equity interests in such entity, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of Seller.
q. Applicable Law. Seller and each Guarantor shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority.
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r. Existence. Seller shall preserve and maintain its legal existence
and all of its material rights, privileges, licenses and franchises.
s. Chief Executive Office; Jurisdiction of Organization. Seller
shall not move its chief executive office from the address referred to in
Section 13(a)(17) or change its jurisdiction of organization from the
jurisdiction referred to in Section 13(a)(17) unless it shall have provided
Buyer 30 days' prior written notice of such change.
t. Taxes. Seller and each Guarantor shall pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained.
u. Transactions with Affiliates. Seller will not enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under the Program Agreements, (b) in
the ordinary course of Seller's business and (c) upon fair and reasonable terms
no less favorable to Seller than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, or make a payment that is
not otherwise permitted by this Section to any Affiliate.
v. Guarantees. Seller shall not create, incur, assume or suffer to
exist any Guarantees, except (i) to the extent reflected in Seller's financial
statements or notes thereto and (ii) to the extent the aggregate Guarantees of
Seller do not exceed $500,000.
w. Indebtedness. Seller shall not incur any additional material
Indebtedness (other than (i) the Existing Indebtedness in amounts not to exceed
the amounts specified on Exhibit K hereto and (ii) usual and customary accounts
payable for a mortgage company) without the prior written consent of Buyer.
x. Hedging. Seller has entered into Interest Rate Protection
Agreements with respect to the Alt A Mortgage Loans, Jumbo Mortgage Loans and
Conforming Mortgage Loans, having terms with respect to protection against
fluctuations in interest rates acceptable to Buyer in its sole discretion.
y. True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of Seller, each Guarantor, any
Affiliate thereof or any of their officers furnished to Buyer hereunder and
during Buyer's diligence of Seller and each Guarantor are and will be true and
complete and do not omit to disclose any material facts necessary to make the
statements herein or therein, in light of the circumstances in which they are
made, not misleading. All required financial statements, information and reports
delivered by Seller to Buyer pursuant to this Agreement shall be prepared in
accordance with U.S. GAAP, or, if applicable, to SEC filings, the appropriate
SEC accounting regulations.
z. Agency Approvals; Servicing. Seller shall maintain its status
with ▇▇▇▇▇▇ ▇▇▇ as an approved lender and ▇▇▇▇▇▇▇ Mac as an approved
seller/servicer, in each case in good standing. Seller shall service all
Purchased Mortgage Loans which are Committed Mortgage
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Loans in accordance with the applicable agency guide. Should Seller, for any
reason, cease to possess all such applicable Agency Approvals, or should
notification to the relevant Agency or to the Department of Housing and Urban
Development, FHA or VA be required, such Seller shall so notify Buyer
immediately in writing. Notwithstanding the preceding sentence, Seller shall
take all necessary action to maintain all of their applicable Agency Approvals
at all times during the term of this Agreement and each outstanding Transaction.
Seller has adequate financial standing, servicing facilities, procedures and
experienced personnel necessary for the sound servicing of mortgage loans of the
same types as may from time to time constitute Mortgage Loans and in accordance
with Accepted Servicing Practices.
aa. Take-out Payments. With respect to each Committed Mortgage Loan,
Seller shall arrange that all payments under the related Take-out Commitment
shall be paid directly to Buyer at the account set forth in Section 9 hereof, or
to an account approved by Buyer in writing prior to such payment. With respect
to any Agency Take-out Commitment, if applicable, (1) with respect to the wire
transfer instructions as set forth in ▇▇▇▇▇▇▇ Mac Form 987 (Wire Transfer
Authorization for a Cash Warehouse Delivery) such wire transfer instructions are
identical to Buyer's wire instructions or Buyer has approved such wire transfer
instructions in writing in its sole discretion, or (2) the Payee Number set
forth on ▇▇▇▇▇▇ Mae Form 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity
Mortgage Loan Schedule) or ▇▇▇▇▇▇ ▇▇▇ Form 1069 (Adjustable-Rate Mortgage Loan
Schedule), as applicable, is identical to the Payee Number that has been
identified by Buyer in writing as Buyer's Payee Number or Buyer has previously
approved the related Payee Number in writing in its sole discretion; with
respect to any Take-out Commitment with an Agency, the applicable agency
documents list Buyer as sole subscriber, unless otherwise agreed to in writing
by Buyer, in Buyer's sole discretion.
bb. No Pledge. Seller shall not pledge, transfer or convey any
security interest in the Collection Account to any Person without the express
written consent of Buyer.
15. EVENTS OF DEFAULT
Each of the following shall constitute an "Event of Default"
hereunder:
a. Payment Failure. Failure of Seller to (i) make any payment of
Price Differential or Repurchase Price or any other sum which has become due, on
a Price Differential Payment Date or a Repurchase Date or otherwise, whether by
acceleration or otherwise, under the terms of this Agreement, any other
warehouse and security agreement or any other document evidencing or securing
Indebtedness of Seller to Buyer or to any Affiliate of Buyer, or (ii) cure any
Margin Deficit when due pursuant to Section 6 hereof.
b. Cross Default. (i) Seller or any of Seller's Affiliates shall be
in default under (i) any Indebtedness of Seller or of such Affiliate which
default (1) involves the failure to pay a matured obligation, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
with respect to such Indebtedness, or (ii) any other contract to which Seller or
such Affiliate is a party which default (1) involves the failure to pay a
matured obligation, or (2) permits the acceleration of the maturity of
obligations by any other party to or beneficiary of such contract.
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c. Assignment. Assignment or attempted assignment by Seller or any
Guarantor of this Agreement or any rights hereunder without first obtaining the
specific written consent of Buyer, or the granting by Seller of any security
interest, lien or other encumbrances on any Purchased Mortgage Loans to any
person other than Buyer.
d. Insolvency. An Act of Insolvency shall have occurred with respect
to Seller, any Guarantor or any Affiliate.
e. Material Adverse Change. Any material adverse change in the
Property, business, financial condition or operations of Seller or any Guarantor
or any of its Affiliates shall occur, in each case as determined by Buyer in its
sole good faith discretion, or any other condition shall exist which, in Buyer's
sole good faith discretion, constitutes a material impairment of Seller's
ability to perform its obligations under this Agreement or any other Program
Agreement.
f. Breach of Financial Representation or Covenant or Obligation. A
breach by Seller or either Guarantor of any of the representations, warranties
or covenants or obligations set forth in Sections 13(a)(1), 13(a)(7), 13(a)(12),
13(a)(19), 13(a)(24), ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇, 14w or 14bb of this
Agreement.
g. Breach of Non-Financial Representation or Covenant. A breach by
Seller or any Guarantor of any other material representation, warranty or
covenant set forth in this Agreement (and not otherwise specified in Section
15(f) above), if such breach is not cured within five (5) Business Days (other
than the representations and warranties set forth in Schedule 1, which shall be
considered solely for the purpose of determining the Market Value, the existence
of a Margin Deficit and the obligation to repurchase such Mortgage Loan) unless
(i) such party shall have made any such representations and warranties with
knowledge that they were materially false or misleading at the time made, (ii)
any such representations and warranties have been determined by Buyer in its
sole discretion to be materially false or misleading on a regular basis, or
(iii) Buyer, in its sole discretion, determines that such breach of a material
representation, warranty or covenant materially and adversely affects (A) the
condition (financial or otherwise) of such party, its Subsidiaries or
Affiliates; or (B) Buyer's determination to enter into this Agreement or
Transactions with such party, then such breach shall constitute an immediate
Event of Default and Seller shall have no cure right hereunder).
h. Guarantor Breach. A breach by any Guarantor of any material
representation, warranty or covenant set forth in the Guaranty or any other
Program Agreement, any "event of default" by Guarantor under the Guaranty, any
repudiation of the Guaranty by any Guarantor, or if the Guaranty is not
enforceable against the applicable Guarantor.
i. Change of Control. The occurrence of a Change in Control.
j. Failure to Transfer. Seller fails to transfer the Purchased
Mortgage Loans to Buyer on the applicable Purchase Date (provided Buyer has
tendered the related Purchase Price).
k. Judgment. A final judgment or judgments for the payment of money
in excess of the lesser of (a) $3 million or (b) 50% of the Seller's Adjusted
Tangible Net Worth in the aggregate shall be rendered against the Seller or any
of its Affiliates by one or more courts,
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administrative tribunals or other bodies having jurisdiction and the same shall
not be satisfied, discharged (or provision shall not be made for such discharge)
or bonded, or a stay of execution thereof shall not be procured, within 30 days
from the date of entry thereof.
l. Government Action. Any Governmental Authority or any person,
agency or entity acting or purporting to act under governmental authority shall
have taken any action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the Property of Seller, any Guarantor
or any Affiliate thereof, or shall have taken any action to displace the
management of Seller, any Guarantor or any Affiliate thereof or to curtail its
authority in the conduct of the business of Seller, any Guarantor or any
Affiliate thereof, or takes any action in the nature of enforcement to remove,
limit or restrict the approval of Seller, any Guarantor or Affiliate as an
issuer, buyer or a seller/servicer of Mortgage Loans or securities backed
thereby, and such action provided for in this subparagraph (m) shall not have
been discontinued or stayed within 30 days.
m. Inability to Perform. An officer of Seller or any of the
Guarantors shall admit its inability to, or its intention not to, perform any of
Seller's Obligations or any Guarantor's obligations hereunder or under the
Guaranty.
n. Security Interest. This Agreement shall for any reason cease to
create a valid, first priority security interest in any material portion of the
Purchased Mortgage Loans or other Repurchase Assets purported to be covered
hereby.
o. Financial Statements. Seller's audited annual financial
statements or the notes thereto or other opinions or conclusions stated therein
shall be qualified or limited by reference to the status of Seller as a "going
concern" or a reference of similar import.
An Event of Default shall be deemed to be continuing unless
expressly waived by Buyer in writing.
16. REMEDIES UPON DEFAULT
In the event that an Event of Default shall have occurred:
a. Buyer may, at its option (which option shall be deemed to have
been exercised immediately upon the occurrence of an Act of Insolvency of Seller
or any Affiliate), declare an Event of Default to have occurred hereunder and,
upon the exercise or deemed exercise of such option, the Repurchase Date for
each Transaction hereunder shall, if it has not already occurred, be deemed
immediately to occur (except that, in the event that the Purchase Date for any
Transaction has not yet occurred as of the date of such exercise or deemed
exercise, such Transaction shall be deemed immediately canceled). Buyer shall
(except upon the occurrence of an Act of Insolvency) give notice to Seller of
the exercise of such option as promptly as practicable.
b. If Buyer exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Section, (i) Seller's obligations in
such Transactions to repurchase all Purchased Mortgage Loans, at the Repurchase
Price therefor on the Repurchase Date determined in accordance with subparagraph
(a) of this Section, shall thereupon become immediately due
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and payable, (ii) all Income paid after such exercise or deemed exercise shall
be retained by Buyer and applied, in Buyer's sole discretion, to the aggregate
unpaid Repurchase Prices for all outstanding Transactions and any other amounts
owing by Seller hereunder, and (iii) Seller shall immediately deliver to Buyer
the Mortgage Files relating to any Purchased Mortgage Loans subject to such
Transactions then in Seller's possession or control.
c. Buyer also shall have the right to obtain physical possession,
and to commence an action to obtain physical possession, of all Records and
files of Seller relating to the Purchased Mortgage Loans and all documents
relating to the Purchased Mortgage Loans (including, without limitation, any
legal, credit or servicing files with respect to the Purchased Mortgage Loans)
which are then or may thereafter come in to the possession of Seller or any
third party acting for Seller. To obtain physical possession of any Purchased
Mortgage Loans held by Custodian, Buyer shall present to Custodian a Trust
Receipt and Certification. Buyer shall be entitled to specific performance of
all agreements of Seller contained in this Agreement.
d. Buyer shall have the right to direct all servicers then servicing
any Purchased Mortgage Loans to remit all collections thereon to Buyer, and if
any such payments are received by Seller, Seller shall not commingle the amounts
received with other funds of Seller and shall promptly pay them over to Buyer.
Buyer shall also have the right to terminate any one or all of the servicers
then servicing any Purchased Mortgage Loans with or without cause. In addition,
Buyer shall have the right to immediately sell the Purchased Mortgage Loans and
liquidate all Repurchase Assets. Such disposition of Purchased Mortgage Loans
may be, at Buyer's option, on either a servicing-released or a
servicing-retained basis. Buyer shall be entitled to place the Purchased
Mortgage Loans in a pool for issuance of mortgage-backed securities at the
then-prevailing price for such securities and to sell such securities for such
prevailing price in the open market. Buyer shall also be entitled to sell any or
all of such Mortgage Loans individually for the prevailing price.
e. Upon the happening of one or more Events of Default, Buyer may
apply any proceeds from the liquidation of the Purchased Mortgage Loans and
Repurchase Assets to the Repurchase Prices hereunder and all other Obligations
in the manner Buyer deems appropriate in its sole discretion.
f. Seller shall be liable to Buyer for (i) the amount of all
reasonable legal or other expenses (including, without limitation, all costs and
expenses of Buyer in connection with the enforcement of this Agreement or any
other agreement evidencing a Transaction, whether in action, suit or litigation
or bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally, further including, without limitation, the reasonable fees and
expenses of counsel (including the costs of internal counsel of Buyer) incurred
in connection with or as a result of an Event of Default, (ii) damages in an
amount equal to the cost (including all fees, expenses and commissions) of
entering into replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of Default, and (iii)
any other loss, damage, cost or expense directly arising or resulting from the
occurrence of an Event of Default in respect of a Transaction.
g. To the extent permitted by applicable law, Seller shall be liable
to Buyer for interest on any amounts owing by Seller hereunder, from the date
Seller becomes liable for such
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amounts hereunder until such amounts are (i) paid in full by Seller or (ii)
satisfied in full by the exercise of Buyer's rights hereunder. Interest on any
sum payable by Seller under this Section 16(g) shall be at a rate equal to the
Post-Default Rate.
h. Buyer shall have, in addition to its rights hereunder, any rights
otherwise available to it under any other agreement or applicable law.
i. Buyer may exercise one or more of the remedies available to Buyer
immediately upon the occurrence of an Event of Default and, except to the extent
provided in subsections (a) and (d) of this Section, at any time thereafter
without notice to Seller. All rights and remedies arising under this Agreement
as amended from time to time hereunder are cumulative and not exclusive of any
other rights or remedies which Buyer may have.
j. Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and Seller hereby expressly waives any defenses
Seller might otherwise have to require Buyer to enforce its rights by judicial
process. Seller also waives any defense (other than a defense of payment or
performance) Seller might otherwise have arising from the use of nonjudicial
process, enforcement and sale of all or any portion of the Purchased Mortgage
Loans, or from any other election of remedies. Seller recognizes that
nonjudicial remedies are consistent with the usages of the trade, are responsive
to commercial necessity and are the result of a bargain at arm's length.
k. Buyer shall have the right to perform reasonable due diligence
with respect to Seller and the Mortgage Loans, which review shall be at the
expense of Seller.
17. REPORTS
a. Notices. Seller shall furnish to Buyer (x) promptly, copies of
any material and adverse notices (including, without limitation, notices of
defaults, breaches, potential defaults or potential breaches) and any material
financial information that is not otherwise required to be provided by Seller
hereunder which is given to Seller's lenders, (y) immediately, notice of the
occurrence of any Event of Default hereunder or default or breach by Seller or
Servicer or either Guarantor of any obligation under any Program Agreement or
any material contract or agreement of Seller or Servicer or either Guarantor or
the occurrence of any event or circumstance that such party reasonably expects
has resulted in, or will, with the passage of time, result in, a Material
Adverse Effect or an Event of Default or such a default or breach by such party
and (z) the following:
(1) as soon as available and in any event within sixty (60) calendar
days after the end of each calendar month, the unaudited consolidated
balance sheets of Seller and its consolidated Subsidiaries as at the end
of such period and the related unaudited consolidated statements of income
and retained earnings and of cash flows for the Seller and its
consolidated Subsidiaries for such period and the portion of the fiscal
year through the end of such period, accompanied by a certificate of a
Responsible Officer of Seller, which certificate shall state that said
consolidated financial statements fairly present in all material respects
the consolidated financial condition and results of operations of Seller
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and its consolidated Subsidiaries in accordance with GAAP, consistently
applied, as at the end of, and for, such period (subject to normal
year-end adjustments);
(2) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of Seller, the Consolidated balance
sheets of Seller and its consolidated Subsidiaries as at the end of such
fiscal year and the related Consolidated statements of income and retained
earnings and of cash flows for the Seller and its consolidated
Subsidiaries for such year, setting forth in each case in comparative form
the figures for the previous year, accompanied by an opinion thereon of
independent certified public accountants of recognized national standing,
which opinion and the scope of audit shall be acceptable to Buyer in its
sole discretion, shall have no "going concern" qualification and shall
state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of Seller and
its respective consolidated Subsidiaries as at the end of, and for, such
fiscal year in accordance with GAAP;
(3) as soon as available and in any event within 90 days after the
end of the calendar year of each Guarantor, the annual personal financial
statements and annual tax return for each Guarantor;
(4) such other prepared statements that Buyer may reasonably
request;
(5) if applicable, copies of any 10-Ks, 10-Qs, registration
statements and other "corporate finance" SEC filings (other than 8-Ks) by
Seller, within 5 Business Days of their filing with the SEC; provided,
that, Seller or any Affiliate will provide Buyer and Credit Suisse First
Boston Corporation with a copy of the annual 10-K filed with the SEC by
Seller or its Affiliates, no later than 90 days after the end of the year;
(6) as soon as available, and in any event within thirty (30) days
of receipt, copies of relevant portions of all final written Agency, FHA,
VA, Governmental Authority and investor audits, examinations, evaluations,
monitoring reviews and reports of its operations (including those prepared
on a contract basis) which provide for or relate to (i) material
corrective action required, (ii) material sanctions proposed, imposed or
required, including without limitation notices of defaults, notices of
termination of approved status, notices of imposition of supervisory
agreements or interim servicing agreements, and notices of probation,
suspension, or non-renewal, or (iii) "report cards," "grades" or other
classifications of the quality of Seller's operations;
(7) from time to time such other information regarding the financial
condition, operations, or business of the Seller as Buyer may reasonably
request;
(8) as soon as reasonably possible, and in any event within thirty
(30) days after a Responsible Officer of the Seller has knowledge of the
occurrence of any Event of Termination, stating the particulars of such
Event of Termination in reasonable detail;
(9) As soon as reasonably possible, notice of any of the following
events:
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(a) change in the insurance coverage required of Seller,
Servicer or any other Person pursuant to any Program Agreement, with
a copy of evidence of same attached;
(b) any material dispute, litigation, investigation,
proceeding or suspension between Seller or Servicer, on the one
hand, and any Governmental Authority or any Person;
(c) any material change in accounting policies or financial
reporting practices of Seller or Servicer;
(d) with respect to any Purchased Mortgage Loan, immediately
upon receipt of notice or knowledge thereof, that the underlying
Mortgaged Property has been damaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty, or
otherwise damaged so as to affect adversely the value of such
Mortgaged Loan;
(e) any material issues raised upon examination of Seller or
Seller's facilities by any Governmental Authority;
(f) promptly upon receipt of notice or knowledge of (i) any
default related to any Repurchase Asset, (ii) any lien or security
interest (other than security interests created hereby or by the
other Program Agreements) on, or claim asserted against, any of the
Purchased Mortgage Loans; and
(g) any other event, circumstance or condition that has
resulted, or has a possibility of resulting, in a Material Adverse
Effect with respect to Seller or Servicer.
b. Officer's Certificates. Seller will furnish to Buyer, at the time
the Seller furnishes each set of financial statements pursuant to Section
17(a)(1) or (2) above, a certificate of a Responsible Officer of Seller in the
form of Exhibit D hereto.
c. Mortgage Loan Reports. Seller will furnish to Buyer monthly
electronic Mortgage Loan performance data, including, without limitation,
delinquency reports (i.e., delinquency, foreclosure and net charge-off reports).
d. Asset Tape. Seller shall provide to Buyer, electronically, in a
format mutually acceptable to Buyer and Seller, an Asset Tape by no later than
the Reporting Date.
e. Other. Seller shall deliver to Buyer any other reports or
information reasonably requested by Buyer or as otherwise required pursuant to
this Agreement.
18. REPURCHASE TRANSACTIONS
Buyer may, in its sole election, engage in repurchase transactions
with the Purchased Mortgage Loans or otherwise pledge, hypothecate, assign,
transfer or otherwise convey the Purchased Mortgage Loans with a counterparty of
Buyer's choice. Unless an Event
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of Default shall have occurred, no such transaction shall relieve Buyer of its
obligations to transfer Purchased Mortgage Loans to Seller pursuant to Section 4
hereof, or of Buyer's obligation to credit or pay Income to, or apply Income to
the obligations of, Seller pursuant to Section 7 hereof. In the event Buyer
engages in a repurchase transaction with any of the Purchased Mortgage Loans or
otherwise pledges or hypothecates any of the Purchased Mortgage Loans, Buyer
shall have the right to assign to Buyer's counterparty any of the applicable
representations or warranties herein and the remedies for breach thereof, as
they relate to the Purchased Mortgage Loans that are subject to such repurchase
transaction.
19. SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered hereunto, and
will enter into each Transaction hereunder, in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to
set-off claims and apply property held by them in respect of any Transaction
against obligations owing to them in respect of any other Transactions hereunder
and (iii) that payments, deliveries and other transfers made by either of them
in respect of any Transaction shall be deemed to have been made in consideration
of payments, deliveries and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries and other
transfers may be applied against each other and netted.
20. NOTICES AND OTHER COMMUNICATIONS
Any and all notices (with the exception of Transaction Requests or
Purchase Confirmations, which shall be delivered via facsimile only),
statements, demands or other communications hereunder may be given by a party to
the other by mail, facsimile, messenger or otherwise to the address specified
below, or so sent to such party at any other place specified in a notice of
change of address hereafter received by the other. All notices, demands and
requests hereunder may be made orally, to be confirmed promptly in writing, or
by other communication as specified in the preceding sentence.
If to Seller:
The New York Mortgage Company, LLC
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Guarantors:
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Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
For Transaction Requests and Purchase Confirmations:
Credit Suisse First Boston Mortgage Capital LLC
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Phone Number: ▇▇▇-▇▇▇-▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
For all other Notices:
Credit Suisse First Boston Mortgage Capital LLC
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with a copy to:
Credit Suisse First Boston Mortgage Capital LLC
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Attention: Legal Department
21. ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the
parties containing general terms and conditions for repurchase transactions.
Each provision and agreement herein shall be treated as separate and independent
from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or agreement.
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22. NON ASSIGNABILITY
The Program Agreements are not assignable by Seller or either Guarantor. Buyer
may from time to time assign all or a portion of its rights and obligations
under this Agreement and the Program Agreements; provided, however that Buyer
shall maintain, for review by Seller upon written request, a register of
assignees and a copy of an executed assignment and acceptance by Buyer and
assignee ("Assignment and Acceptance"), specifying the percentage or portion of
such rights and obligations assigned. Upon such assignment, (a) such assignee
shall be a party hereto and to each Program Agreement to the extent of the
percentage or portion set forth in the Assignment and Acceptance, and shall
succeed to the applicable rights and obligations of Buyer hereunder, and (b)
Buyer shall, to the extent that such rights and obligations have been so
assigned by it to either (i) an Affiliate of Buyer which assumes the obligations
of Buyer or (ii) to another Person approved by Seller (such approval not to be
unreasonably withheld) which assumes the obligations of Buyer, be released from
its obligations hereunder and under the Program Agreements. Unless otherwise
stated in the Assignment and Acceptance, Seller shall continue to take
directions solely from Buyer unless otherwise notified by Buyer in writing.
Buyer may distribute to any prospective assignee any document or other
information delivered to Buyer by Seller.
23. SET-OFF
In addition to any rights and remedies of Buyer provided by law,
Buyer shall have the right, without prior notice to Seller or any Guarantor, any
such notice being expressly waived by Seller or any Guarantor to the extent
permitted by applicable law, upon any amount becoming due and payable by Seller
or any Guarantor hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by Buyer or any branch or agency thereof to
or for the credit or the account of Seller or the Guarantors. Buyer agrees
promptly to notify Seller and the Guarantors after any such set-off and
application made by Buyer; provided, that the failure to give such notice shall
not affect the validity of such set-off and application.
24. BINDING EFFECT; GOVERNING LAW; JURISDICTION
a. This Agreement shall be binding and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Seller
acknowledges that the obligations of Buyer hereunder or otherwise are not the
subject of any guaranty by, or recourse to, any direct or indirect parent or
other Affiliate of Buyer. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH,
AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF.
b. SELLER AND EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY. SELLER AND
EACH GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
COURT OF THE STATE OF NEW YORK, OR
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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR
PROCEEDING. SELLER AND EACH GUARANTOR HEREBY SUBMITS TO, AND WAIVES ANY
OBJECTION THEY MAY HAVE TO, EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ AND THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR
RELATING TO THE PROGRAM AGREEMENTS.
25. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party
shall constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to exercise
any other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to give
a notice pursuant to Section 6(a), 16(a) or otherwise, will not constitute a
waiver of any right to do so at a later date.
26. INTENT
a. The parties recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the United
States Code, as amended (except insofar as the type of Purchased Mortgage Loans
subject to such Transaction or the term of such Transaction would render such
definition inapplicable), and a "securities contract" as that term is defined in
Section 741 of Title 11 of the United States Code, as amended (except insofar as
the type of assets subject to such Transaction would render such definition
inapplicable).
b. It is understood that either party's right to liquidate Purchased
Mortgage Loans delivered to it in connection with Transactions hereunder or to
exercise any other remedies pursuant to Section 16 hereof is a contractual right
to liquidate such Transaction as described in Sections 555 and 559 of Title 11
of the United States Code, as amended.
c. The parties agree and acknowledge that if a party hereto is an
"insured depository institution," as such term is defined in the Federal Deposit
Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a
"qualified financial contract," as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable).
d. It is understood that this Agreement constitutes a "netting
contract" as defined in and subject to Title IV of the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA") and each payment entitlement and
payment obligation under any Transaction hereunder shall constitute a "covered
contractual payment entitlement" or "covered contractual payment obligation",
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a "financial institution" as that term is defined in
FDICIA).
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27. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that:
a. in the case of Transactions in which one of the parties is a
broker or dealer registered with the SEC under Section 15 of the 1934 Act, the
Securities Investor Protection Corporation has taken the position that the
provisions of the SIPA do not protect the other party with respect to any
Transaction hereunder;
b. in the case of Transactions in which one of the parties is a
government securities broker or a government securities dealer registered with
the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to
the other party with respect to any Transaction hereunder; and
c. in the case of Transactions in which one of the parties is a
financial institution, funds held by the financial institution pursuant to a
Transaction hereunder are not a deposit and therefore are not insured by the
Federal Deposit Insurance Corporation or the National Credit Union Share
Insurance Fund, as applicable.
28. POWER OF ATTORNEY
Seller hereby authorizes Buyer to file such financing statement or
statements relating to the Purchased Mortgage Loans without Seller's signature
thereon as Buyer, at its option, may deem appropriate. Seller hereby appoints
Buyer as Seller's agent and attorney-in-fact to execute any such financing
statement or statements in Seller's name and to perform all other acts which
Buyer deems appropriate to perfect and continue its ownership interest in and/or
the security interest granted hereby, if applicable, and to protect, preserve
and realize upon the Purchased Mortgage Loans, including, but not limited to,
the right to endorse notes, complete blanks in documents, transfer servicing,
and sign assignments on behalf of Seller as its agent and attorney-in-fact. This
agency and power of attorney is coupled with an interest and is irrevocable
without Buyer's consent. Notwithstanding the foregoing, the power of attorney
hereby granted may be exercised only during the occurrence and continuance of
any Event of Default hereunder. Seller shall pay the filing costs for any
financing statement or statements prepared pursuant to this Section 28.
29. BUYER MAY ACT THROUGH AFFILIATES
Buyer may, from time to time, designate one or more affiliates
for the purpose of performing any action hereunder.
30. INDEMNIFICATION; OBLIGATIONS
a. Each of Seller and each Guarantor agrees to hold Buyer and each
of its respective Affiliates and their officers, directors, employees, agents
and advisors (each, an "Indemnified Party") harmless from and indemnify each
Indemnified Party (and will reimburse each Indemnified Party as the same is
incurred) against all liabilities, losses, damages, judgments, costs and
expenses (including, without limitation, reasonable fees and expenses of
counsel) of any kind which may be imposed on, incurred by, or asserted against
any Indemnified
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Party relating to or arising out of this Agreement, any Transaction Request,
Purchase Confirmation, any Program Agreement or any transaction contemplated
hereby or thereby resulting from anything other than the Indemnified Party's
gross negligence or willful misconduct. Each of Seller and each Guarantor also
agrees to reimburse each Indemnified Party for all reasonable expenses in
connection with the enforcement of this Agreement and the exercise of any right
or remedy provided for herein, any Transaction Request, Purchase Confirmation
and any Program Agreement, including, without limitation, the reasonable fees
and disbursements of counsel. Seller's and each Guarantor's agreements in this
Section 30 shall survive the payment in full of the Repurchase Price and the
expiration or termination of this Agreement. Each of Seller and each Guarantor
hereby acknowledges that its obligations hereunder are recourse obligations of
Seller and such Guarantor and are not limited to recoveries each Indemnified
Party may have with respect to the Purchased Mortgage Loans. Each of Seller and
each Guarantor also agrees not to assert any claim against Buyer or any of its
Affiliates, or any of their respective officers, directors, employees, attorneys
and agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the facility
established hereunder, the actual or proposed use of the proceeds of the
Transactions, this Agreement or any of the transactions contemplated thereby.
THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES,
WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) OF THE INDEMNIFIED PARTIES.
b. Without limitation to the provisions of Section 4, if any payment
of the Repurchase Price of any Transaction is made by Seller other than on the
then scheduled Repurchase Date thereto as a result of an acceleration of the
Repurchase Date pursuant to Section 16 or for any other reason, Seller shall,
upon demand by Buyer, pay to Buyer an amount sufficient to compensate Buyer for
any losses, costs or expenses that it may reasonably incur as of a result of
such payment.
c. Without limiting the provisions of Section 30(a) hereof, if
Seller fails to pay when due any costs, expenses or other amounts payable by it
under this Agreement, including, without limitation, fees and expenses of
counsel and indemnities, such amount may be paid on behalf of Seller by Buyer,
in its sole discretion.
31. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument.
32. CONFIDENTIALITY
This Agreement and its terms, provisions, supplements and
amendments, and notices hereunder, are proprietary to Buyer and Agent and shall
be held by Seller and each Guarantor in strict confidence and shall not be
disclosed to any third party without the written consent of Buyer except for (i)
disclosure to Seller's or any Guarantor's direct and indirect Affiliates and
Subsidiaries, attorneys or accountants, but only to the extent such disclosure
is
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necessary and such parties agree to hold all information in strict confidence,
or (ii) disclosure required by law, rule, regulation or order of a court or
other regulatory body.
33. RECORDING OF COMMUNICATIONS
Buyer, Seller and each Guarantor shall have the right (but not the
obligation) from time to time to make or cause to be made tape recordings of
communications between its employees and those of the other party with respect
to Transactions. Buyer, Seller and each Guarantor consent to the admissibility
of such tape recordings in any court, arbitration, or other proceedings. The
parties agree that a duly authenticated transcript of such a tape recording
shall be deemed to be a writing conclusively evidencing the parties' agreement.
34. NON-UTILIZATION FEE
No later than the Price Differential Payment Date following the end
of each calendar month, Seller shall pay in immediately available funds to Buyer
a non-refundable fee calculated in accordance with the formula set forth in the
schedule attached hereto as Annex II. Such payment shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to
Buyer at such account designated by Buyer.
35. PERIODIC DUE DILIGENCE REVIEW
Seller acknowledges that Buyer has the right to perform continuing
due diligence reviews with respect to the Seller and the Mortgage Loans, for
purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or otherwise, and Seller agrees that upon
reasonable (but no less than one (1) Business Day's) prior notice unless an
Event of Default shall have occurred, in which case no notice is required, to
Seller, Buyer or its authorized representatives will be permitted during normal
business hours to examine, inspect, and make copies and extracts of, the
Mortgage Files and any and all documents, records, agreements, instruments or
information relating to such Mortgage Loans in the possession or under the
control of Seller and/or the Custodian. Seller also shall make available to
Buyer a knowledgeable financial or accounting officer for the purpose of
answering questions respecting the Mortgage Files and the Mortgage Loans.
Without limiting the generality of the foregoing, Seller acknowledges that Buyer
may purchase Mortgage Loans from Seller based solely upon the information
provided by Seller to Buyer in the Purchased Assets Schedule and the
representations, warranties and covenants contained herein, and that Buyer, at
its option, has the right at any time to conduct a partial or complete due
diligence review on some or all of the Mortgage Loans purchased in a
Transaction, including, without limitation, ordering Broker's price opinions,
new credit reports and new appraisals on the related Mortgaged Properties and
otherwise re-generating the information used to originate such Mortgage Loan.
Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon
third party underwriter to perform such underwriting. Seller agrees to cooperate
with Buyer and any third party underwriter in connection with such underwriting,
including, but not limited to, providing Buyer and any third party underwriter
with access to any and all documents, records, agreements, instruments or
information relating to such Mortgage Loans in the possession, or under the
control, of Seller. Seller further agrees that Seller shall pay all
out-of-pocket costs and expenses
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incurred by Buyer in connection with Buyer's activities pursuant to this Section
35 ("Due Diligence Costs").
36. AUTHORIZATIONS
Any of the persons whose signatures and titles appear on Schedule 2
are authorized, acting singly, to act for Seller or Buyer, as the case may be,
under this Agreement.
[Signature Page Follows]
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Credit Suisse First Boston Mortgage Capital LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________________________________
Title:
____________________________________________________
Date: October 2, 2002
_____________________________________________________
The New York Mortgage Company, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________________________________
Title: President
____________________________________________________
Date: October 2, 2002
_____________________________________________________
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_____________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
as Guarantor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
as Guarantor