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EXHIBIT 10.89
MASTER REPURCHASE AGREEMENT
DATED AS OF JUNE 4, 1999
BETWEEN:
BEAR ▇▇▇▇▇▇▇ MORTGAGE CAPITAL CORPORATION
DORAL FINANCIAL CORPORATION
1. Applicability
From time to time the parties hereto may enter into transactions in
which Doral Financial Corporation ("Seller") agrees to transfer to Bear ▇▇▇▇▇▇▇
Mortgage Capital Corporation ("Buyer") Mortgage Loans 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 shall be governed by this Agreement, as the same shall be
amended from time to time.
2. Definitions
(a) "Act of Insolvency", with respect to either Buyer or Seller, (i)
the commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
law, or such party seeking the appointment of a receiver, trustee, custodian or
similar official for such party or any substantial part of its property, or
(ii) the commencement of any such case or proceeding against such party, or
another seeking such an appointment, or the filing against a party of an
application for a protective decree under the provisions of the Securities
Investor Protection Act of 1970, which (A) is consented to or not timely
contested by such party, (B) results in the entry of an order for relief, such
an appointment, the issuance of such a protective decree or the entry of an
order having a similar effect, or (C) is not dismissed within 15 days, (iii)
the making by a party of a general assignment for the benefit of creditors, or
(iv) the admission in writing by a party of such party's inability to pay such
party's debts as they become due;
(b) "Additional Purchased Mortgage Loans", Mortgage Loans provided by
Seller to Buyer pursuant to Paragraph 4(a) hereof;
(c) "Agency" shall refer to GNMA, FNMA or FHLMC, as the case may be;
(d) "Agency Documentation" shall refer collectively to the Guides and
parts or chapters thereof and to GNMA, FNMA and FHLMC forms and schedules;
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(e) "Agency Registration Form" shall refer to Form HUD 11705 (Schedule
of Subscriber), ▇▇▇▇▇▇ ▇▇▇ Form 2014 (Delivery Schedule), FHLMC Form 939
(Settlement and Information Multiple Registration Form) or FHLMC Form 987
(Warehouse Delivery Form) as applicable, on which it is indicated that the
related Agency Security shall be issued to, and in the name of, Bear, ▇▇▇▇▇▇▇ &
Co. Inc.;
(f) "Agency Security" shall refer to a GNMA Security, a FNMA Security
or a FHLMC Security;
(g) "Approvals" shall refer to the approvals of FHLMC, FNMA and GNMA
described in Paragraph 11(b)(xi) of these Supplemental Terms;
(h) "Business Day", any day other than a Saturday, Sunday and any day
on which banks located in the State of New York are authorized or required to
close for business;
(i) "Buyer's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of a percentage, agreed to by Buyer
and Seller prior to entering into the Transaction and specified in the related
Request/Confirmation, to the Repurchase Price for such Transaction as of such
date;
(j) "Covenant Compliance Certificate" shall have the meaning set forth
in Paragraph 13 hereof;
(k) "Custodian", the custodian named in the Custody Agreement and any
permitted successor thereto;
(l) "Custody Agreement", the Tri-Party Custody Agreement among Buyer,
Seller and the Custodian providing for the custody of records relating to the
Purchased Mortgage Loans;
(m) "Custodian" shall refer to the Custodian named in the Custody
Agreement;
(n) "Custody Receipt" shall refer to the Receipt substantially in the
form attached as an exhibit to the Custody Agreement;
(o) "FHA" shall refer to the Federal Housing Administration;
(p) "FHLMC" shall refer to the Federal Home Loan Mortgage Corporation;
(q) "FHLMC Guide" shall refer to the ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' and
Servicers' Guide, as such Guide may hereafter from time to time be amended;
(r) "FHLMC Security" shall refer to a Mortgage Participation
Certificate issued and guaranteed by FHLMC and backed by a pool of Mortgage
Loans;
(s) "FNMA" shall refer to the Federal National Mortgage Association;
(t) "FNMA Guide" shall refer to the ▇▇▇▇▇▇ Mae MBS Selling and
Servicing Guide, as such Guide may hereafter from time to time be amended;
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(u) "FNMA Security" shall refer to a Guaranteed Mortgage Pass-Through
Certificate issued and guaranteed by FNMA and backed by a pool of Mortgage
Loans;
(v) "GAAP" shall refer to generally accepted accounting principles
consistently applied;
(w) "GNMA" shall refer to the Government National Mortgage
Association;
(x) "GNMA Guide" shall refer to the GNMA Mortgage-Backed Securities
Guide, as such Guide may hereafter from time to time be amended;
(y) "GNMA Security" shall refer to (i) fully-modified pass-through
mortgage-backed certificate guaranteed by GNMA and backed by a pool of Mortgage
Loans and (ii) Mortgage-Backed Serial Notes guaranteed by GNMA and backed by a
pool of Mortgage Loans;
(z) "Guide" shall refer to the GNMA Guide, the FNMA Guide or the FHLMC
Guide, as applicable;
(aa) "Income", with respect to any Mortgage Loan at any time, any
principal thereof then payable and all payments of interest and principal
together with other distributions thereon or proceeds thereof;
(bb) "Loan Schedule", a schedule of Mortgage Loans identifying each
Mortgage Loan: (1) in the case of all Mortgage Loans, by Seller's loan number,
Mortgagor's name and address (including the state and zip code) of the
mortgaged property, whether such Mortgage Loan bears a fixed or adjustable
interest rate, the loan-to-value ratio, the outstanding principal amount as of
a specified date, the initial interest rate borne by such Mortgage Loan, the
original principal balance thereof, the current scheduled monthly payment of
principal and interest, the maturity of the related Note, the property type,
the occupancy status, the appraised value, the original term to maturity and
whether or not the Mortgage Loan (including the related Note) has been
modified; and (2) in the case of adjustable rate Mortgage Loans, the interest
rate borne by such Mortgage Loan on the Purchase Date, the index and applicable
determination date for each adjustment period, the gross margin, the payment
adjustment period (in months), months to next payment adjustment, periodic
payment adjustment cap, lifetime payment adjustment cap, lifetime payment cap,
interest rate adjustment, periodic interest adjustment cap and lifetime
interest rate adjustment cap;
(cc) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;
(dd) "Market Value", with respect to any Mortgage Loans as of any
date, the fair market value of such Mortgage Loans on such date as determined
by Buyer in its reasonable business judgment from time to time and at such
times as it may elect in its sole discretion; provided, however, that a Market
Value of zero shall be assigned to (i) any Mortgage Loan that has been
delinquent for at least thirty (30) days, (ii) any Mortgage Loan that has been
subject to this Agreement for more than one hundred and eighty (180) days in
aggregate or (iii) any Mortgage Loan with respect to which there is a breach of
a representation or warranty made by Seller in this Agreement or the Custody
Agreement that materially adversely affects Buyer's interests hereunder;
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(ee) "Mortgage", the mortgage, deed of trust or other instrument
creating a first lien on an estate in fee simple interest in real property
securing a Note;
(ff) "Mortgage Loan", a first lien mortgage loan on single family
residential property consisting of a Note secured by a Mortgage;
(gg) "Mortgagor", the obligor on a Note;
(hh) "Note", the Note or other evidence of indebtedness evidencing the
indebtedness of a Mortgagor under a Mortgage Loan;
(ii) "Pooled Mortgage Loan" shall refer to an Agency Mortgage Loan
that is included in a pool designated to back an Agency Security and with
respect to which the Custodian has made an initial certification to the related
Agency;
(jj) "Prepooled Mortgage Loan" shall refer to a Mortgage Loan for
which there is no Takeout Commitment and is identified as such on the Loan
Schedule.
(kk) "Price Differential", with respect to any Transaction hereunder
as of any date, the aggregate amount obtained by daily application of the
Pricing Rate for such Transaction to the Purchase Price for such Transaction on
a 360 day per year basis 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 date of determination (reduced by any amount of such
Price Differential previously paid by Seller to Buyer with respect to such
Transaction);
(ll) "Pricing Rate", the per annum percentage rate for determination
of the Price Differential, which rate shall be specified in the related
Request/Confirmation;
(mm) "Prime Rate", the prime rate of U.S. money center commercial
banks as published in The Wall Street Journal;
(nn) "Purchase Date", the date with respect to each Transaction on
which Purchased Mortgage Loans are sold by Seller to Buyer hereunder;
(oo) "Purchase Price", (i) on the Purchase Date, the price at which
Purchased Mortgage Loans are sold by Seller to Buyer hereunder, and (ii)
thereafter, such price decreased by the amount of any cash transferred by
Seller to Buyer pursuant to Paragraph 4(a) hereof;
(pp) "Purchased Mortgage Loans", the Mortgage Loans sold by Seller to
Buyer in a Transaction hereunder, and any Mortgage Loans substituted therefor
in accordance with Paragraph 9 hereof. The term "Purchased Mortgage Loans" with
respect to any Transaction at any time also shall include Additional Purchased
Mortgage Loans delivered pursuant to Paragraph 4(a);
(qq) "Replacement Mortgage Loans", the meaning specified in Paragraph
12(e)(ii) hereof;
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(rr) "Repurchase Date", the date on which Seller is to repurchase the
Purchased Mortgage Loans from Buyer, including any date determined by
application of the provisions of Paragraphs 3(e) or 12 hereof;
(ss) "Repurchase Price", the price at which Purchased Mortgage Loans
are to be resold by 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 Price Differential as of the date of
such determination, increased by any amount determined by the application of
the provisions of Paragraph 12 hereof;
(tt) "Request/Confirmation", the request and confirmation
substantially in the form of Exhibit A hereto delivered pursuant to Paragraph 3
hereof;
(uu) "Security Release Form" shall refer to (i) ▇▇▇▇▇▇▇ Mac Form 996
(Warehouse Lender Release of Security Interest) in the case of a FHLMC
Security, (ii) ▇▇▇▇▇▇ Mae Form 2004 (Security Release Certification) in the
case of a FNMA Security and (iii) Form HUD 11711A (Release of Security
Interest) in the case of a GNMA Security.
(vv) "Takeout Assignment" shall refer to an assignment, substantially
in the form of Exhibit D hereto, executed by the Seller in favor of Buyer
assigning all of the Seller's rights under a Takeout Commitment;
(ww) "Takeout Commitment" shall refer to a trade confirmation from the
Takeout Investor to the Seller confirming the details of a forward trade
between the Takeout Investor and the Seller with respect to one or more Agency
Securities, which trade confirmation shall be valid, binding and in full force
and effect and relate to pools of Mortgage Loans that satisfy the "good
delivery standard" of the Public Securities Association as set forth in the
Public Securities Association Uniform Practices Guide;
(xx) "Takeout Investor" shall refer to a securities dealer or other
financial institution, listed in Exhibit G hereto, who has made a Takeout
Commitment. Such list may be modified from time to time by the Seller in its
sole discretion, upon written notice to the Seller, or by the Seller with the
written consent of the Seller. Such amended list shall be delivered by the
Seller to the Custodian;
(yy) "VA" shall refer to the Department of Veteran Affairs.
(zz) "Warehouse Facilities" shall refer to warehouse facilities
(relating to mortgage loans only) in excess of $10,000,000 listed on Exhibit B
hereto.
3. Initiation; Request/Confirmation; Termination; Transactions Optional
(a) Any agreement to enter into a Transaction shall be made in writing
at the initiation of Seller. In the event that Seller desires to enter into a
Transaction hereunder, Seller shall deliver to Buyer prior to 5:00 p.m., New
York City time, on the Business Day prior to the proposed Purchase Date, a
Request/Confirmation complete in every respect except for the signature of an
authorized representative of Buyer. Buyer shall, upon its receipt and approval
thereof, promptly execute and return the signed Request/Confirmation to Seller.
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(b) The Request/Confirmation shall describe the Purchased Mortgage
Loans in a manner satisfactory to Buyer (which may be by attaching a Loan
Schedule thereto), identify Buyer and Seller and set forth (i) the Purchase
Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the
Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase
Price applicable to the Transaction, and (v) any additional terms or conditions
of the Transaction mutually agreeable to Buyer and Seller.
(c) Each Request/Confirmation shall be binding upon the parties hereto
unless written notice of objection is given by the objecting party to the other
party within one (1) Business Day after Buyer has delivered the completed
Request/Confirmation to Seller.
(d) In the event of any conflict between the terms of a
Request/Confirmation and this Agreement, such Request/Confirmation shall
prevail.
(e) In the case of Transactions terminable upon demand, such demand
shall be made by Buyer or Seller, no later than such time as is customary in
accordance with market practice, by telephone or otherwise on or prior to the
Business Day on which such termination will be effective. On the date specified
in such demand, or on the date fixed for termination in the case of
Transactions having a fixed term, termination of the Transaction will be
effected by resale by Buyer to Seller or its agent of the Purchased Mortgage
Loans and any Income in respect thereof received by Buyer (and not previously
credited or transferred to, or applied to the obligations of, Seller hereunder)
against the transfer of the Repurchase Price to an account of Buyer.
(f) The adjustment mechanism and the index for any adjustable rate
Mortgage Loan must be satisfactory to Buyer in its sole discretion.
(g) Notwithstanding any provision of this Agreement or the Custody
Agreement to the contrary, the initiation of each Transaction is subject to the
approval of Buyer in its sole discretion. Buyer may, in its sole discretion,
reject any Mortgage Loan from inclusion in a Transaction hereunder for any
reason.
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all Purchased
Mortgage Loans subject to all Transactions hereunder is less than the aggregate
Buyer's Margin Amount for all such Transactions (a "Margin Deficit"), then
Buyer may by notice to Seller require Seller in such Transactions, at Buyer's
option, to transfer to Buyer cash or additional Mortgage Loans reasonably
acceptable to Buyer ("Additional Purchased Mortgage Loans"), so that the cash
and aggregate Market Value of the Purchased Mortgage Loans, including any such
Additional Purchased Mortgage Loans, will thereupon equal or exceed such
aggregate Buyer's Margin Amount.
(b) If the notice to be given by Buyer to Seller under subparagraph
(a) above is given at or prior to 10:00 a.m. New York city time on a Business
Day, Seller shall transfer cash or Additional Purchased Mortgage Loans to Buyer
prior to the close of business in New York City on the date of such notice, and
if such notice is given after 10:00 a.m. New York City time, Seller shall
transfer cash or Additional Purchased Mortgage Loans prior to the close of
business in New York City on the Business Day following the date of such
notice.
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(c) Any cash transferred pursuant to this Paragraph shall be held by
Buyer as though it were Additional Purchased Mortgage Loans and, unless Buyer
shall otherwise consent, shall not reduce the Repurchase Price of the related
Transaction.
5. Income Payments
Where a particular Transaction's term extends over an Income payment
date on the Mortgage Loans subject to that Transaction, all payments and
distributions, whether in cash or in kind, made on or with respect to the
Purchased Mortgage Loans shall, unless otherwise mutually agreed by Buyer and
Seller, be paid, delivered or transferred: (a) in the case of Agency
Securities, directly to Bear, ▇▇▇▇▇▇▇ & Co. Inc. as agent for the Buyer
pursuant to the instructions set forth at Exhibit E and (b) in the case of
Mortgage Loans, so long as an Event of Default on the part of Seller shall not
have occurred and be continuing, be paid directly to Seller by the related
Mortgagor. Buyer shall not be obligated to take any action pursuant to the
preceding sentence to the extent that such action would result in the creation
of a Margin Deficit, unless prior thereto or simultaneously therewith Seller
transfers to Buyer, at Buyer's option, cash or Additional Purchased Mortgage
Loans sufficient to eliminate such Margin Deficit.
6. 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 shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Mortgage Loans with respect to all Transactions hereunder and all proceeds
thereof. Seller shall pay all fees and expenses associated with perfecting such
security interest including, without limitation, the cost of filing financing
statements under the Uniform Commercial Code and recording assignments of
mortgage as and when required by Buyer in its sole discretion.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder
shall be in immediately available funds. All Mortgage Loans transferred by one
party hereto to the other party shall be transferred by notice to the Custodian
to the effect that the Custodian is now holding for the benefit of the
transferee the related documents and assignment forms delivered to it under the
Custody Agreement.
8. Segregation of Documents Relating to Purchased Mortgage Loans
All documents relating to Purchased Mortgage Loans in the possession
of Seller shall be segregated from other documents and securities in its
possession and shall be identified as being subject to this Agreement.
Ownership of all Purchased Mortgage Loans shall pass to Buyer and nothing in
this Agreement shall preclude Buyer from engaging in repurchase transactions
with the Purchased Mortgage Loans or otherwise pledging or hypothecating the
Purchased Mortgage Loans, but no such transaction shall relieve Buyer of its
obligations to resell and transfer Purchased Mortgage Loans to Seller pursuant
to the terms hereof.
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9. Substitution
Seller may, subject to agreement with and acceptance by Buyer,
substitute other Mortgage Loans for any Purchased Mortgage Loans. Such
substitution shall be made by transfer to Buyer of such other Mortgage Loans
and transfer to Seller of such Purchased Mortgage Loans. After substitution,
the substituted Mortgage Loans shall be deemed to be Purchased Mortgage Loans.
10. Delivery of Additional Documents
(a) The Seller shall, prior to or simultaneously with the funding of
each Transaction, deliver to Buyer through the Custodian a fully executed
Custody Receipt, and all other applicable documents required by the Custody
Agreement.
(b) The Seller shall, within ninety (90) days of a Mortgage Loan
becoming subject to this Agreement, deliver to Buyer (i) a duly authorized and
originally executed Takeout Assignment relating to a Takeout Commitment
covering such Mortgage Loan naming Buyer as the assignee, relating to a pool of
Mortgage Loans of which such Mortgage Loan forms a part and in form and
substance satisfactory to Buyer and (ii) a copy of the related Agency
Registration Form in form and substance satisfactory to Buyer.
(c) The Seller shall, simultaneously with the funding of the initial
Transaction under this Agreement relating to each type of Agency Security and
from time to time thereafter upon the request of Buyer, deliver to Buyer
evidence of the commitment of FHLMC, FNMA or GNMA, as appropriate, pursuant to
which the related Agency Securities shall be issued.
(d) The Seller shall deliver to Buyer on a monthly basis (or more
frequently if requested by Buyer), an investor commitment report, substantially
in the form attached hereto as Exhibit F, listing the existing commitments of
GNMA, FHLMC and FNMA (for securitizations and sales) relating to all
outstanding Request/Confirmations.
(e) Buyer, simultaneously with the funding of each Transaction
involving Mortgage Loans, shall cause the Custodian to be provided with an
executed Security Release Form appropriate for the related Agency Security
indicating that Seller releases its interest in the related Mortgage Loans into
one or more Agency Securities, upon the issuance of such Agency Security or
Securities. Such form shall be prepared by the Seller and provided to the
Custodian on behalf of Buyer in advance of the date on which delivery thereof
is required hereby. The Custodian shall execute such form on behalf of Buyer.
11. Representations, Warranties and Covenants
(a) Buyer and Seller each represents and warrants, and shall on and as
of the Purchase Date of any Transaction be deemed to represent and warrant, to
the other that:
(i) it is duly authorized to execute and deliver this
Agreement, to enter into the Transactions contemplated hereunder and
to perform its obligations hereunder and has taken all necessary
action to authorize such execution, delivery and performance;
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(ii) it will engage in such Transactions as principal (or, if
agreed in writing in advance of any Transaction by the other party
hereto, as agent for a disclosed principal);
(iii) the person signing this Agreement on its behalf is duly
authorized to do so on its behalf (or on behalf of any such disclosed
principal);
(iv) it has obtained all authorizations of any governmental body
required in connection with this Agreement and the Transactions
hereunder and such authorizations are in full force and effect; and
(v) the execution, delivery and performance of this Agreement
and the Transactions hereunder will not violate any law, ordinance,
charter, by-law or rule applicable to it or any agreement by which it
is bound or by which any of its assets are affected.
(b) Seller represents and warrants to Buyer, and shall on and as of
the Purchase Date of any Transaction be deemed to represent and warrant, as
follows:
(i) The documents disclosed by Seller to Buyer pursuant to this
Agreement are either original documents or genuine and true copies
thereof;
(ii) Seller is a separate and independent corporate entity from
the Custodian, Seller does not own a controlling interest in the
Custodian either directly or through affiliates and no director or
officer of Seller is also a director or officer of the Custodian;
(iii) None of the Purchase Price for any Mortgage Loan will be
used either directly or indirectly to acquire any security, as that
term is defined in Regulation T of the Regulations of the Board of
Governors of the Federal Reserve System, and Seller has not taken any
action that might cause any Transaction to violate any regulation of
the Federal Reserve Board;
(iv) Each Mortgage Loan was underwritten in accordance with the
written underwriting standards of Seller furnished by Seller to Buyer,
and no change to such underwriting standards has occurred since the
date of the last written revision to such standards was furnished to
Buyer by Seller;
(v) Seller shall be at the time it transfers to Buyer any
Mortgage Loans for any Transaction the legal and beneficial owner of
such Mortgage Loans, free of any lien, security interest, option or
encumbrance; and
(vi) Seller used no selection procedures that identified the
Mortgage Loans relating to a Transaction as being less desirable or
valuable than other comparable assets in Seller's portfolio on the
related Purchase Date.
(vii) All information provided by the Seller to Buyer concerning
the Mortgage Loans is true and correct;
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(viii) All data and other information provided by or on behalf of the
Seller to the Custodian, whether in writing, by electronic transmission or on
computer tape or diskette or otherwise, is true and correct;
(ix) The Seller is servicing each Mortgage Loan in strict conformity
with the servicing standards described in Paragraph 14 of this Agreement;
(x) The consummation of the Transaction as contemplated herein and
in the Custody Agreement will not violate any policy, regulation or guideline
of the FHA or VA or result in the voiding or reduction of the FHA insurance, VA
guarantee or any other insurance or guarantee in respect of any Mortgage Loan,
and such insurance or guarantee is in full force and effect or shall be in full
force and effect as required by the applicable GNMA Guide, FNMA Guide or FHLMC
Guide;
(xi) The Seller is a GNMA-approved issuer, a GNMA-approved servicer,
a FHA-approved mortgagee, a VA-approved lender, a FNMA-approved issuer, a
FNMA-approved servicer and a FHLMC-approved seller/servicer in good standing
("Approvals");
(xii) Each Mortgage Loan conforms to the requirements and
specifications (including, without limitation, all representations and
warranties required in respect thereof) set forth in the GNMA Guide, FNMA Guide
or FHLMC Guide, as applicable, and is eligible to be sold to any Agency to back
an Agency Security;
(xiii) Each and every document, certificate, instrument, insurance
policy, escrow and any other item necessary to satisfy the final delivery
requirements of FHLMC, FNMA or GNMA as required by the FHLMC Guide, the FNMA
Guide or the GNMA Guide, as applicable, for the issuance of the related Agency
Security are in form and substance acceptable to FHLMC, FNMA or GNMA, as
appropriate, and have been delivered to the Custodian;
(xiv) The Seller has no notice or knowledge of any fact, event or
circumstance whatsoever on the basis of which FHLMC, FNMA or GNMA, as
applicable, may delay the issuance of, or refuse to issue, the related Agency
Security;
(xv) Each copy of the document or documents evidencing the Agency
commitment delivered to Seller through the Custodian pursuant to Paragraph
10(c) hereof is a true and correct copy, and such GNMA, FHLMC or FNMA
commitment has not been withdrawn, amended or supplemented except as has been
theretofore disclosed to Buyer in writing;
(xvi) Other than the Prepooled Mortgage Loans identified as such on
the Loan Schedule, each Mortgage Loan that is intended to back an Agency
Security conforms in all respects with all requirements of the Takeout
Commitment applicable to the Agency Security to be backed by such Mortgage
Loans;
(xvii) Each Takeout Commitment with respect to Pooled Mortgage Loans
is a legal, valid and binding obligation of the Seller enforceable against it
in accordance with
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its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(xviii) Each Takeout Commitment with respect to Pooled Mortgage Loans
is enforceable by the Seller against the related Takeout Investor;
(xix) Each Takeout Commitment with respect to Pooled Mortgage Loans
is, by virtue of the related Takeout Assignment, enforceable by Buyer against
the related Takeout Investor;
(xx) Each Takeout Assignment with respect to Pooled Mortgage Loans
is a legal, valid and binding obligation of the Seller enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law); and
(xxi) Each Mortgage is secured by a negotiable promissory note.
(c) Seller hereby makes to Buyer, its successors and assigns each of
the representations and warranties regarding Seller and the Mortgage Loans
which Seller makes to the Agency in connection with its issuance of Agency
Securities backed by the related Pooled Mortgage Loans.
(d) Seller covenants with Buyer, from and after the date hereof, as
follows:
(i) Seller shall immediately notify Buyer if an Event of Default shall
have occurred;
(ii) Seller shall deliver to Buyer a current Loan Schedule with
respect to all Mortgage Loans subject to this Agreement with such frequency as
Buyer may require but in no event less frequently than weekly; and
(iii) No Mortgage Loan shall be subject to this Agreement for more
than one hundred and eighty (180) days in aggregate.
(iv) The Seller shall immediately notify Buyer if any Approvals are
withdrawn or modified;
(v) The Seller shall notify Buyer of any changes in the terms of,
or the parties to, the Warehouse Facilities within one (1) Business Day of the
Seller becoming aware of such changes, whether or not such changes have yet
become effective;
(vi) In the case of a Transaction involving Mortgage Loans that will
back an Agency Security, the Seller shall not alter or amend the Agency
Registration Form relating to such Transaction following the initial
preparation thereof without the express approval of Buyer;
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(vii) Without Buyer's express prior written approval, the
Seller shall not execute, in favor of any third party, any assignment
of rights held or purportedly held by the Seller under a given Takeout
Commitment;
(viii) All financial and other covenants made by the Seller
under the Warehouse Facilities shall be deemed to be made directly to
Buyer as though fully set forth herein; provided, however, that any
such covenants that require the Seller to obtain Buyer's consent prior
to entering into financing arrangements (other than the Transactions
contemplated hereby) shall be deemed to merely require prior written
notice by the Seller to Buyer of such financing arrangements without
any requirement for the consent of Buyer;
(ix) The Seller shall be at the time it delivers any
Purchased Mortgage Loans to the Custodian or Buyer for any
Transaction, and shall continue to be, through the Purchase Date
relating to each such Transaction, the legal and beneficial owner of
such Purchased Mortgage Loans free and clear of any lien, security
interest, option or encumbrance except for the security interest
created by this Agreement;
(x) The Seller shall deliver to Buyer the Covenant
Compliance Certificate referred to in Paragraph 13 on the last day of
each calendar quarter;
(xi) The Seller shall service the Mortgage Loans in
accordance with the provisions of Paragraph 14 hereof;
(xii) The Seller shall promptly notify Buyer after the
occurrence of any change that it reasonably believes would be
contemplated by Paragraph 12 hereof;
(xiii) Notwithstanding any other provision of this Agreement,
no Mortgage Loan shall be subject to this Agreement or to the Custody
Agreement for more than ninety (90) days in aggregate unless such
Mortgage Loan is a Pooled Mortgage Loan and the Seller shall have
delivered to Buyer a Takeout Assignment relating to a Takeout
Commitment covering such Mortgage Loan; and
(xiv) Notwithstanding any other provision of this Agreement,
no Mortgage Loan shall be subject to this Agreement or to the Custody
Agreement for more than one hundred and eighty (180) days in
aggregate.
(e) With respect to each Prepooled Mortgage Loan which
becomes a Pooled Mortgage Loan, the Seller shall represent and warrant
to Buyer, and shall on and as of the date on which such Prepooled
Mortgage Loan became a Pooled Mortgage Loan be deemed to represent
each of the representations, warranties and covenants set forth in
this Section 11.
12. Events of Default; Event of Termination
(a) The following events shall constitute events of default (each an
"Event of Default") hereunder with respect to Buyer or Seller, as applicable:
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(i) Seller fails to repurchase or Buyer fails to transfer Purchased
Mortgage Loans upon the applicable Repurchase Date pursuant to the terms
hereof;
(ii) Seller or Buyer fails, after one (1) Business Day's notice, to
comply with Paragraph 4 hereof;
(iii) An Act of Insolvency occurs with respect to Seller or Buyer or
any controlling entity thereof;
(iv) Any representation or warranty made by Seller or Buyer in this
Agreement or the Custody Agreement shall have been incorrect or untrue in any
material respect when made or repeated or deemed to have been made or repeated;
provided, however, that in the case of representations and warranties made with
respect to the Purchased Mortgage Loans, such circumstance shall not constitute
an Event of Default if, after determining the Market Value of the Purchased
Mortgage Loans without taking into account the Purchased Mortgage Loans with
respect to which such circumstance has occurred, no other Event of Default
shall have occurred and be continuing;
(v) Any covenant in this Agreement or the Custody Agreement shall
have been breached in any material respect; provided, however, that in the case
of covenants made with respect to the Purchased Mortgage Loans, such
circumstance shall not constitute an Event of Default if, after determining the
Market Value of the Purchased Mortgage Loans without taking into account the
Purchased Mortgage Loans with respect to which such circumstance has occurred,
no other Event of Default shall have occurred and be continuing;
(vi) Buyer shall have reasonably determined that Seller is or will be
unable to meet its commitments under this Agreement, shall have notified Seller
of such determination and Seller shall not have responded with appropriate
information to the contrary to the satisfaction of Buyer within twenty-four
(24) hours;
(vii) This Agreement shall for any reason cease to create a valid,
first priority security interest in any of the Purchased Mortgage Loans
purported to be covered hereby;
(viii) A final judgment by any competent court in the United States of
America for the payment of money in an amount of at least $500,000 is rendered
against Seller, and the same remains undischarged for a period of sixty (60)
days during which execution of such judgment is not effectively stayed;
(ix) Any event of default or any event which with notice, the passage
of time or both shall constitute an event of default shall occur and be
continuing under any repurchase or other financing agreement for borrowed funds
or indenture for borrowed funds by which Seller is bound or affected shall
occur and be continuing;
(x) In the reasonable judgment of Buyer a material adverse change
shall have occurred in the business, operations, properties, prospects or
condition (financial or otherwise) of Seller;
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(xi) Seller shall be in default with respect to any normal
and customary covenants under any debt contract or agreement, any
servicing agreement or any lease to which it is a party, which default
(a) permits acceleration of the obligations of the Seller under such
contract or agreement by any other party thereto or (b) could
materially adversely affect the financial condition of Seller (which
covenants include, but are not limited to, an Act of Insolvency of
Seller or the failure of Seller to make required payments under such
contract or agreement as they become due);
(xii) Seller shall fail to promptly notify Buyer of (i) the
acceleration of any debt obligation or the termination of any credit
facility of Seller; (ii) the amount and maturity of any such debt
assumed after the date hereof; (iii) any adverse developments with
respect to pending or future litigation involving Seller which could
reasonably be expected to have a material adverse effect on the
financial condition of the Seller; and (iv) any other developments
which might materially and adversely affect the financial condition of
Seller; or
(xiii) Seller shall have failed to comply in any material
respect with its obligations under the Custody Agreement.
(xiv) Any Approvals of the Seller are materially adversely
modified or revoked.
(b) If an Event of Default shall have occurred and be continuing,
then, at the option of the nondefaulting party, exercised by written notice to
the defaulting party (which option shall be deemed to have been exercised, even
if no notice is given, immediately upon the occurrence of an Act of
Insolvency), the Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur.
(c) In all Transactions in which the defaulting party is Seller, if
Buyer is deemed to have exercised the option referred to in subparagraph (b) of
this Paragraph, (i) Seller's obligations hereunder to repurchase all Purchased
Mortgage Loans in such Transactions shall thereupon become immediately due and
payable, (ii) to the extent permitted by applicable law, the Repurchase Price
with respect to each such Transaction shall be increased by the aggregate
amount obtained by daily application of (x) the greater of the Pricing Rate for
such Transaction and the Prime Rate to (y) the Repurchase Price for such
Transaction as of the Repurchase Date as determined pursuant to subparagraph
(b) of this Paragraph (decreased as of any day by (A) any amounts retained by
Buyer with respect to such Repurchase Price pursuant to clause (iii) of this
subparagraph, (B) any proceeds from the sale of Purchased Mortgage Loans
pursuant to subparagraph (e)(i) of this Paragraph, and (C) any amounts credited
to the account of Seller pursuant to subparagraph (f) of this Paragraph) on a
360 day per year basis for the actual number of days during the period from and
including the date of the Event of Default giving rise to such option to but
excluding the date of payment of the Repurchase Price as so increased, (iii)
all Income paid after such exercise or deemed exercise shall be payable to and
retained by Buyer applied to the aggregate unpaid Repurchase Prices owed by
Seller, and (iv) Seller shall immediately deliver or cause the Custodian to
deliver to Buyer any documents relating to Purchased Mortgage Loans subject to
such Transactions then in Seller's possession.
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(d) In all Transactions in which the defaulting party is Buyer, upon
tender by Seller of payment of the aggregate Repurchase Prices for all such
Transactions, Buyer's right, title and interest in all Purchased Mortgage Loans
subject to such Transactions shall be deemed transferred to Seller, and Buyer
shall deliver or cause the Custodian to deliver all documents relating to such
Purchased Mortgage Loans to Seller.
(e) After one (1) Business Day's notice to the defaulting party (which
notice need not be given if an Act of Insolvency shall have occurred, and which
may be the notice given under subparagraph (b) of this Paragraph or the notice
referred to in clause (ii) of the first sentence of subparagraph (a) of this
Paragraph), the nondefaulting party may:
(i) as to Transactions in which the defaulting party is
Seller, (A) immediately sell on a servicing released or servicing
retained basis as Buyer deems desirable, in a recognized market at
such price or prices as Buyer may in its sole discretion deem
satisfactory, any or all Purchased Mortgage Loans subject to such
Transactions and apply the proceeds thereof to the aggregate unpaid
Repurchase Prices and any other amounts owing by Seller hereunder or
(B) in its sole discretion elect, in lieu of selling all or a portion
of such Purchased Mortgage Loans, to give Seller credit for such
Purchased Mortgage Loans in an amount equal to the Market Value
therefor on such date against the aggregate unpaid Repurchase Prices
and any other amounts owing by Seller hereunder; and
(ii) as to Transactions in which the defaulting party is
Buyer, (A) purchase mortgage loans ("Replacement Mortgage Loans")
having substantially the same outstanding principal amount, maturity
and interest rate as any Purchased Mortgage Loans that are not
transferred by Buyer to Seller as required hereunder or (B) in its
sole discretion elect, in lieu of purchasing Replacement Mortgage
Loans, to be deemed to have purchased Replacement Mortgage Loans at
the price therefor on such date, calculated as the average of the
prices obtained from three (3) nationally recognized registered
broker/dealers that buy and sell comparable mortgage loans in the
secondary market.
(f) As to Transactions in which the defaulting party is Buyer, Buyer
shall be liable to Seller (i) with respect to Purchased Mortgage Loans (other
than Additional Purchased Mortgage Loans), for any excess of the price paid (or
deemed paid) by Seller for Replacement Mortgage Loans therefor over the
Repurchase Price for such Purchased Mortgage Loans and (ii) with respect to
Additional Purchased Mortgage Loans, for the price paid (or deemed paid) by
Seller for the Replacement Mortgage Loans therefor. In addition, Buyer shall be
liable to Seller for interest on such remaining liability with respect to each
such purchase (or deemed purchase) of Replacement Mortgage Loans from the date
of such purchase (or deemed purchase) until paid in full by Buyer. Such
interest shall be at a rate equal to the greater of the Pricing Rate for such
Transaction or the Prime Rate.
(g) For purposes of this Paragraph 12, the Repurchase Price for each
Transaction hereunder in respect of which the defaulting party is Buyer shall
not increase above the amount of such Repurchase Price for such Transaction
determined as of the date of the exercise or deemed exercise by Seller of its
option under subparagraph (b) of this Paragraph.
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(h) The defaulting party shall be liable to the nondefaulting party
for the amount of all reasonable legal or other expenses incurred by the
nondefaulting party in connection with or as a consequence of an Event of
Default, together with interest thereon at a rate equal to the greater of the
Pricing Rate for the relevant Transaction or the Prime Rate. Expenses incurred
in connection with an Event of Default shall include without limitation those
costs and expenses incurred by the nondefaulting party as a result of the early
termination of any repurchase agreement or reverse repurchase agreement entered
into by the nondefaulting party in connection with the Transaction then in
default.
(i) The nondefaulting party shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other agreement or
applicable law.
(j) At the option of Buyer, exercised by written notice to Seller, the
Repurchase Date for any or all Transactions shall be deemed to immediately
occur in the event that the senior debt obligations or short-term debt
obligations of Bear ▇▇▇▇▇▇▇ & Co. Inc. shall be rated below the four highest
generic grades (without regard to any pluses or minuses reflecting gradations
within such generic grades) by any nationally recognized statistical rating
organization.
(k) The exercise by any party of remedies after the occurrence of an
Event of Default shall be conducted in a commercially reasonable manner.
13. Financial Statements
(a) The Seller shall deliver to Buyer a quarterly certificate (the
"Covenant Compliance Certificate") signed by an authorized officer of the
Seller to the effect that as of such date, the Seller is in compliance with all
covenants set forth in this agreement and all covenants set forth in the
Warehouse Facilities.
(b) Each delivery of Purchased Securities by the Seller to Buyer
hereunder will constitute a representation by the Seller that there has been no
material adverse change in the Seller's financial condition not disclosed to
Buyer since the date of the Seller's most recent unaudited balance sheet or
income statement delivered to Buyer. The Seller shall provide Buyer, from time
to time at the Seller's expense, with such information of a financial or
operational nature as Buyer may reasonably request promptly upon receipt of
such request.
14. Servicing of the Purchased Mortgage Loans
(a) The parties hereto agree and acknowledge that, notwithstanding the
purchase and sale of the Purchased Mortgage Loans contemplated hereby, Seller
shall service the Purchased Mortgage Loans for the benefit of Buyer and, if
Buyer shall exercise its rights to sell the Purchased Mortgage Loans pursuant
to this Agreement prior to the related Repurchase Date, Buyer's assigns;
provided, however, that the obligation of Seller to service Purchased Mortgage
Loans for the benefit of Buyer as aforesaid shall cease upon the securitization
of Mortgage Loans into Agency Securities.
(b) The Seller shall service and administer the Mortgage Loans in
accordance with prudent mortgage loan servicing standards and procedures
generally accepted in the mortgage banking industry and in accordance with the
standards incorporated (with respect to the GNMA
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securitization program) the GNMA Guide or (with respect to the FNMA
securitization program) the FNMA Guide or (with respect to the FHLMC
securitization program) the FHLMC Guide; provided, however, that the Seller
shall at all times comply with applicable law and FHA regulations and VA
regulations so that the FHA insurance, VA guarantee or any other applicable
insurance or guarantee, if any, in respect of any Mortgage Loan is not voided
or reduced. The Seller shall at all times maintain accurate and complete
records of its servicing of the Mortgage Loans.
(c) Seller will provide Buyer with monthly reports, substantially
identical in form to FNMA's standard form of remittance report with respect to
all Purchased Mortgage Loans then involved in any Transaction hereunder.
(d) Buyer may, in its sole discretion if an Event of Default shall
have occurred and be continuing, without payment of any termination fee or any
other amount to Seller, sell the Mortgage Loans on a servicing released basis
without the payment of any termination fee to the Seller or terminate Seller as
the servicer of the Purchased Mortgage Loans with or without cause.
15. Single Agreement
Buyer and Seller acknowledge that, and have entered hereinto 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.
16. Notices and Other Communications
Except as otherwise expressly provided herein, all such notices or
communications shall be in writing (including, without limitation, telegraphic,
facsimile or telex communication) or confirmed in writing and such notices and
other communications shall, when mailed, telegraphed, communicated by facsimile
transmission or telexed, be effective when received at the address for notices
for the party to whom such notice or communications is to be given as follows:
if to Seller:
Doral Financial Corporation
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇_________
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to Buyer:
Bear ▇▇▇▇▇▇▇ Mortgage Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notwithstanding the foregoing, however, that a facsimile transmission shall be
deemed to be received when transmitted so long as the transmitting machine has
provided an electronic confirmation of such transmission, and provided further,
however, that all financial statements delivered shall be hand-delivered or
sent by first-class mail. Either party may revise any information relating to
it by notice in writing to the other party, which notice shall be effective on
the third business day following receipt thereof.
17. Payment of Expenses
Seller shall pay on demand all reasonable fees and expenses
(including, without limitation, the reasonable fees and expenses for legal
services of any kind whatsoever) incurred by Buyer or the Custodian in
connection with this Agreement and the Custody Agreement and the transactions
contemplated hereby and thereby, whether or not any Transactions are entered
into hereunder, including, by way of illustration and not by way of limitation,
the fees and expenses incurred in connection with (i) the preparation,
reproduction and distribution of this Agreement and the Custody Agreement and
any opinions of counsel, certificates of officers or other documents
contemplated by the aforementioned agreements and (ii) any Transaction under
this Agreement; provided, however, that Seller shall not be required to pay the
fees and expenses of Buyer incurred as a result of Buyer's default under this
Agreement. The obligation of Seller to pay such fees and expenses incurred
prior to or in connection with the termination of this Agreement shall survive
the termination of this Agreement.
18. Opinions of Counsel
Seller shall, on the Purchase Date of the first Transaction hereunder
and, upon the request of Buyer, on the Purchase Date of any subsequent
Transaction, cause to be delivered to Buyer, with reliance thereon permitted as
to any person or entity that purchases the Mortgage Loans from Buyer in a
repurchase transaction, a favorable opinion of counsel with respect to the
matters set forth in Exhibit C hereto, in form and substance acceptable to
Buyer and its counsel.
19. Further Assurances; Additional Information
(a) Seller shall promptly provide such further assurances or
agreements as Buyer may request in order to effect the purposes of this
Agreement and any Takeout Assignment.
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(b) At any reasonable time, Seller shall permit Buyer, its agents or
attorneys, to inspect and copy any and all documents and data in its possession
pertaining to each Purchased Mortgage Loan that is the subject of such
Transaction. Such inspection shall occur upon the request of Buyer at a
mutually agreeable location during regular business hours and on a date not
more than two (2) Business Days after the date of such request.
(c) Seller agrees to provide Buyer or its agents, from time to time,
with such information concerning Seller of a financial or operational nature as
Buyer may reasonably request.
(d) Seller shall provide Buyer or its agents, with copies of all
filings made by or on behalf of Seller or any entity that controls Seller, with
the Securities and Exchange Commission pursuant to the Securities Exchange Act
of 1934, as amended, promptly upon making such filings.
20. Buyer as Attorney-in-Fact
Buyer is hereby appointed the attorney-in-fact of Seller for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instruments that Buyer may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, Buyer shall have the right and power during the occurrence and
continuation of any Event of Default to receive, endorse and collect all checks
made payable to the order of Seller representing any payment on account of the
principal of or interest on any of the Purchased Mortgage Loans and to give
full discharge for the same.
21. Appointment of Agent
Buyer hereby appoints Bear ▇▇▇▇▇▇▇ Mortgage Capital Corporation as its
agent for purposes of issuing Requests/Confirmations, determining Market Value,
exercising Buyer's rights under any margin maintenance provision of this
Agreement and such other purposes as Buyer may direct. The appointment of such
agent shall not relieve Buyer of its obligations hereunder.
Buyer hereby appoints Bear, ▇▇▇▇▇▇▇ & Co. ▇▇▇.▇▇ its agent for
purposes of the receipt, registration and sale of Agency Securities.
22. Wire Instructions
(a) Any amounts to be transferred by Buyer to Seller hereunder shall
be sent by wire transfer in immediately available funds to the account of
Seller at:
FEDERAL RESERVE OF N.Y.
ABA # ▇▇▇▇▇▇▇▇▇
Doral Bank
For further credit to:
HF Mortgage Bankers
Acct. #▇-▇▇▇▇▇▇▇-▇
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(b) Any amounts to be transferred by Seller to Buyer hereunder shall
be sent by wire transfer in immediately available funds to the account of Buyer
at:
FNB CHICAGO/BEAR ▇▇▇▇▇▇▇ MBS
ABA #: ▇▇▇-▇▇▇-▇▇▇
Acct. No.: 5801230
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(c) Amounts received after 3:00 p.m., New York City time, on any
Business Day shall be deemed to have been paid and received on the next
succeeding Business Day.
23. 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.
24. Non-assignability; Termination
(a) The rights and obligations of the parties under this Agreement and
under any Transaction shall not be assigned by either party without the prior
written consent of the other party. Subject to the foregoing, this Agreement
and any Transactions shall be binding upon and shall inure to the benefit of
the parties and their respective successors and assigns.
(b) This Agreement and all Transactions outstanding hereunder shall
terminate automatically without any requirement for notice on the date
occurring three hundred and sixty-four (364) days after the date as of which
this Agreement is entered into; provided, however, that this Agreement and any
Transaction outstanding hereunder may be extended by mutual agreement of Buyer
and Seller; and provided further, however, that no such party shall be
obligated to agree to such an extension.
25. Agency Documentation
All references in this Agreement to items of Agency Documentation
shall, if such items are amended or superseded from time to time by the related
Agency, be deemed references to such Agency Documentation as so amended or
superseded.
26. Counterparts
This Agreement may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
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27. Governing Law
This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.
28. 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 subparagraph 4(a) hereof will not constitute a
waiver of any right to do so at a later date.
29. Use of Employee Plan Assets
(a) If assets of an employee benefit plan subject to any provision of
the Employee Retirement Income Security Act of 1974 ("ERISA") are intended to
be used by either party hereto (the "Plan Party") in a Transaction, the Plan
Party shall so notify the other party prior to the Transaction. The Plan Party
shall represent in writing to the other party that the Transaction does not
constitute a prohibited transaction under ERISA or is otherwise exempt
therefrom, and the other party may proceed in reliance thereon but shall not be
required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this
Paragraph, any such Transaction shall proceed only if Seller furnishes or has
furnished to Buyer its most recent available audited statement of its financial
condition and its most recent subsequent unaudited statement of its financial
condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller
shall be deemed (i) to represent to Buyer that since the date of Seller's
latest such financial statements, there has been no material adverse change in
Seller's financial condition which Seller has not disclosed to Buyer, and (ii)
to agree to provide Buyer with future audited and unaudited statements of its
financial condition as they are issued, so long as it is a Seller in any
outstanding Transaction involving a Plan Party.
30. Intent
(a) Each Transaction involving Mortgage Loans is entered into in
contemplation of the issuance of one or more Agency Securities backed by the
related Mortgage Loans. The parties intend that the Seller will act as issuer
or seller and/or servicer with respect to such Agency Securities, as
applicable, and that each Agency Security will be issued in the name of, and
delivered to or upon the order of, Bear, ▇▇▇▇▇▇▇ & Co. Inc.
(b) The parties intend and acknowledge 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 Mortgage
Loans subject to such Transaction or the term
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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.
(c) It is understood that either party's right to liquidate Mortgage
Loans delivered to it in connection with Transactions hereunder or to exercise
any other remedies pursuant to Paragraph 12 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.
31. 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 Securities and Exchange
Commission ("SEC") under Section 15 of the Securities Exchange Act of
1934 ("1934 Act"), the Securities Investor Protection Corporation has
taken the position that the provisions of the Securities Investor
Protection Act of 1970 ("SAPPY") 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, SAPPY 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, the
Federal Savings and Loan Insurance Corporation or the National Credit
Union Share Insurance Fund, as applicable.
BEAR ▇▇▇▇▇▇▇ MORTGAGE CAPITAL DORAL FINANCIAL CORPORATION
CORPORATION
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- -------------------
Title SR. VICE PRESIDENT Title EVP & TREASURER
Date 6-11-99 Date June 10, 1999
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EXHIBIT A
REQUEST/CONFIRMATION
TO: Doral Financial Corporation ("Seller")
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
FROM: Bear ▇▇▇▇▇▇▇ Mortgage Capital Corporation ("Buyer")
RE: TRANSACTIONS INVOLVING MORTGAGE LOANS TO BE SECURITIZED INTO AGENCY
SECURITIES
AGENCY (check one): FNMA (TM) FHLMC (TM) GNMA (TM)
Bear ▇▇▇▇▇▇▇ Mortgage Capital Corporation ("Buyer") is pleased to confirm your
sale and its purchase of the Mortgage Loans described below and listed on the
attached Loan Schedule pursuant to the Master Repurchase Agreement between the
Seller and Buyer under the following terms and conditions:
POOL/COMMITMENT NO.
ORIG. PRINCIPAL AMOUNT OF MORTGAGE LOANS:
CURRENT PRINCIPAL AMOUNT OF MORTGAGE LOANS:
PURCHASE DATE:
REPURCHASE DATE:
PURCHASE PRICE:
PRICING RATE:
MINIMUM REQUIRED MARGIN PERCENTAGE:
PRICE DIFFERENTIAL DUE DATE:
▇-▇
▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Agreement is incorporated by reference into this
Request/Confirmation and made a part hereof as if it were fully set forth
herein. All capitalized terms used herein but not otherwise defined shall have
the meanings specified in the Master Repurchase Agreement.
BEAR ▇▇▇▇▇▇▇ MORTGAGE CAPITAL
CORPORATION
BY: ______________________________
NAME: ____________________________
TITLE: ___________________________
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25
TO EXHIBIT A
CONFIRMATION/FUNDING REQUEST FOR MORTGAGE LOANS
Request No. ___
Date: _________
Amount
Funded
to
Product Wire Loan Borrower Loan Purchase Qualified Market Takeout Note Commitment Takeout Maturity
Investor Type Date Number Last Amount Price Originator Value Date Rate Number Price Date
-------- ---- ---- ------ ---- ------ ----- ---------- ----- ---- ---- ------ ----- ----
TOTALS:
[SELLER]
By: ______________________________
Title: ______________________________
Date: ______________________________
Amount to be
funded by MLMCI: $____________
26
EXHIBIT B
List of Warehousing Facilities for
Whole loans only
As of 6/4/99
LENDER* SIZE OF CREDIT LINE
------- ------------------------
(IN MILLIONS OF DOLLARS)
Banco Popular 70
Banco Santander 60
Government Development Bank 100
Economic Development Bank 20
Scotiabank 20
First Bank 40
Bankers Trust 313
Citibank 50
PaineWebber 200
▇▇▇▇▇▇▇ ▇▇▇▇▇ 600
Bear ▇▇▇▇▇▇▇ 450
TOTAL $1,923
======
Note: The above lines are in addition to over $1.0 Billion in Repo lines
available for securities.
---------------------
* In addition, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ has committed to a facility of
$450,000,000 but final documentation is still pending.
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EXHIBIT C
OPINION OF COUNSEL TO SELLER
1. Seller is duly organized and validly existing as a corporation in
good standing under the laws of the Commonwealth of Puerto Rico and has power
and authority to enter into and perform its obligations under this Agreement
and the Custody Agreement. Seller is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the business
transacted by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business, properties,
assets or condition (financial or other) of Seller and its subsidiaries,
considered as a whole.
2. This Agreement and the Custody Agreement have each been duly
authorized, executed and delivered by Seller, and each constitutes a valid and
legally binding obligation of Seller enforceable against Seller in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles.
3. No consent, approval, authorization or order of any state or
federal court or government agency or body is required to be obtained by Seller
for the consummation of the transactions contemplated by this Agreement or the
Custody Agreement.
4. The consummation of any of the transactions contemplated by this
Agreement and the Custody Agreement will not conflict with, result in a breach
of, or constitute a default under the articles of incorporation or bylaws of
Seller or the terms of any indenture or other agreement or instrument known to
us to which Seller is party or bound, or any order known to such counsel to be
applicable to Seller or any regulations applicable to Seller, of any state or
federal court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over Seller.
5. There is no pending or threatened action, suit or proceeding before
any court or governmental agency, authority or body or any arbitrator involving
Seller or relating to the transaction contemplated by this Agreement or the
Custody Agreement which, if adversely determined, would have a material adverse
effect on Buyer.
6. Seller is duly registered as a finance company in each state in
which Mortgage Loans were originated, to the extent such registration is
required by applicable law.
7. Each Mortgage Loan will have been endorsed in a manner which
satisfies any requirement of endorsement in order to transfer all right, title
and interest in and to that Mortgage Loan from Seller to Buyer. This Agreement
together with (a) the delivery of such related Mortgage Loans to Custodian and
(b) the endorsement of such Mortgage Loans to Buyer, creates a valid, perfected
security interest in such Mortgage Loans in favor of Buyer. As holder of the
Mortgage Loans by endorsement, Buyer shall, subject to the terms of the
Agreement, be entitled to the same security interest and liens with respect to
the Mortgage Loans as Seller, without the necessity of recording any
assignments of mortgage in the Registry of Property of Puerto Rico.
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EXHIBIT D
[TAKEOUT ASSIGNMENT]
_____________________ ("Takeout Investor")
(Address)
Attention: ____________________
Gentlemen:
Attached hereto is a correct and complete copy of your confirmation of
commitment (the "Commitment"), trade-dated ___________, 19__, to purchase
$____________ of _____% ____ year:
(Check Box)
: (a) Government National Mortgage Association;
: (b) Federal National Mortgage Association; or
: (c) Federal Home Loan Mortgage Corporation;
mortgage-backed pass-through securities ("Securities") at a purchase
price of ____________ from _________________. This is to confirm that (i) the
Commitment is in full force and effect, (ii) the Commitment has been assigned
to _____________________ ("Assignee") whose acceptance of such assignment is
indicated below, (iii) you will accept delivery of such Securities directly
from Assignee and (iv) you will pay Assignee for such Securities. Payment will
be made "delivery versus payment (DVP)" to Assignee in immediately available
funds. Assignee shall have the right to require you to fulfill your obligation
to purchase the Securities.
Notwithstanding the foregoing, the obligation to deliver the
Securities to you shall be that of [Seller] and your sole recourse for the
failure of such delivery shall be against [Seller].
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29
If you have any questions, please call ____________________ of the
Assignee at __________________ immediately.
Very truly yours,
[SELLER]
By: _________________________
Title: ______________________
Date: _______________________
Agreed to:
[ASSIGNEE]
By: ____________________
Title: _________________
Date: __________________
D-2
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EXHIBIT E
PAYMENT INSTRUCTIONS FOR AGENCY SECURITIES
FED FNMA AND FHLMC SECURITY INSTRUCTIONS: ________________
ABA _________
PTC GNMA SECURITY INSTRUCTIONS: ________
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
INVESTOR COMMITMENT REPORT
MORTGAGE LOANS
(SECURITIZATION)
Confirmation/
Funding Request Trade Delivery MBS Note/Coupon Delivery Trade Commitment
(Listed by Number) Date Takeout Investor Month Type Rate Price Amount Number Number Reason
------------------ ---- ---------------- ----- ---- ---- ----- ------ ------ ------ ------
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EXHIBIT G
TAKEOUT INVESTORS