EXHIBIT 10(aa)
SECOND AMENDED AND RESTATED ADDENDUM TO
MASTER REPURCHASE AGREEMENT
Dated as of August 19, 2005
Between
PULTE MORTGAGE LLC
as a Seller,
and
PULTE FUNDING, INC.
as Buyer
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS................................................... 5
Section 1.01. Certain Defined Terms.................................. 5
Section 1.02. Other Terms............................................ 23
ARTICLE II AMOUNTS AND TERMS OF PURCHASES............................... 24
Section 2.01. Facility............................................... 24
Section 2.02. Making Purchases....................................... 24
Section 2.03. Margin Maintenance..................................... 25
Section 2.04. Collections............................................ 26
Section 2.05. Repurchase or Substitution Procedures.................. 27
Section 2.06. Payments and Computations, Etc......................... 28
Section 2.07. Intent of the Seller and the Buyer..................... 28
Section 2.08. No Segregation of Assets............................... 28
Section 2.09. Substitution........................................... 29
ARTICLE III CONDITIONS OF PURCHASES...................................... 30
Section 3.01. C onditions Precedent to Any Purchase from the Seller.. 30
Section 3.02. C onditions Precedent to All Purchases................. 31
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................ 32
Section 4.01. Representations of the Seller........................... 32
ARTICLE V COVENANTS...................................................... 37
Section 5.01. ........................................................ 37
Section 5.02. Financial Statements and Reports........................ 37
Section 5.03. Taxes and Other Liens................................... 38
Section 5.04. Maintenance............................................. 38
Section 5.05. Further Assurances...................................... 38
Section 5.06. Insurance............................................... 39
Section 5.07. Accounts and Records.................................... 40
Section 5.08. Right of Inspection..................................... 40
Section 5.09. Notice of Certain Events................................ 40
Section 5.10. Performance of Certain Obligations...................... 40
Section 5.11. Notice of Default....................................... 41
Section 5.12. Compliance with Laws and Material Agreements............ 41
Section 5.13. Deposits of Proceeds.................................... 41
Section 5.14. Closing Instructions.................................... 41
Section 5.15. Special Affirmative Covenants Concerning Transferred
Mortgage Assets......................................... 41
Section 5.16. Limitations on Mergers and Dissolutions................. 41
Section 5.17. Fiscal Year............................................. 42
Section 5.18. Actions with Respect to Transferred Mortgage Assets.
The Seller shall not:................................... 42
Section 5.19. Net Worth............................................... 42
Section 5.20. Employee Benefit Plans.................................. 42
Section 5.21. Change of Principal Office.............................. 42
Section 5.22. Maximum Leverage........................................ 42
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Section 5.23. Delivery of Special Mortgage Loans................ 42
Section 5.24. Change in Business................................ 43
Section 5.25. Separate Conduct of Business...................... 43
Section 5.26. Sales, Liens, Etc................................. 43
Section 5.27. Operations and Properties......................... 43
Section 5.28. Performance Guarantor Credit Rating............... 44
Section 5.29. Take-Out Commitments.............................. 44
Section 5.30. Environmental Compliance.......................... 44
ARTICLE VI COVENANTS........................................................... 44
Section 6.01. Servicing......................................... 44
Section 6.02. Correction of Mortgage Notes...................... 44
ARTICLE VII EVENTS OF DEFAULT.................................................. 45
Section 7.01. Events of Default................................. 45
Section 7.02. Remedies.......................................... 47
ARTICLE VIII INDEMNIFICATION................................................... 50
Section 8.01. Indemnities by the Seller......................... 50
ARTICLE IX MISCELLANEOUS....................................................... 51
Section 9.01. Amendments, Etc................................... 51
Section 9.02. Notices, Etc...................................... 52
Section 9.03. Binding Effect; Assignability..................... 52
Section 9.04. Costs, Expenses and Taxes, Expenses and Taxes..... 52
Section 9.05. No Proceedings.................................... 53
Section 9.06. GOVERNING LAW..................................... 53
Section 9.07. Third Party Beneficiary........................... 53
Section 9.08. Execution in Counterparts......................... 54
Section 9.09. Repurchase Transactions........................... 54
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EXHIBITS
EXHIBIT A Form of Deferred Purchase Price Note
EXHIBIT B Form of ▇▇▇▇ of Sale
SCHEDULES
SCHEDULE I Trade Names
SCHEDULE II Approved Investors
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SECOND AMENDED AND RESTATED ADDENDUM TO MASTER REPURCHASE
AGREEMENT
This Second Amended and Restated Addendum to Master Repurchase Agreement,
dated as of August 19, 2005, (this "Agreement"), is made by and among PULTE
MORTGAGE LLC, a Delaware limited liability company (hereinafter, together with
its successors and assigns, the "Seller" or "Pulte Mortgage") and PULTE FUNDING,
INC., a Michigan corporation (hereinafter, together with its successors and
assigns, the "Buyer").
RECITALS
(1)Certain terms which are capitalized and used throughout this Agreement
(in addition to those defined above) are defined in Article I of this Agreement
or, if not defined therein, in the Master Repurchase Agreement.
(2)The Seller and Buyer have entered into that certain Master Repurchase
Agreement, dated as of December 22, 2000 (the "Master Repurchase Agreement").
(3)The Seller and Buyer have entered into that certain Addendum to Master
Repurchase Agreement, dated as of December 22, 2000 (the "Original Addendum").
(4)The Buyer and Seller wish to amend and restate a second time the
Original Addendum in order to supplement and amend the Master Repurchase
Agreement to enter Transactions involving Mortgage Assets (as defined below).
(4)This Agreement is in lieu of Annexes I-VII referred to in the Master
Repurchase Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Adjusted Liabilities" means, with respect to the Seller, without
duplication, and at any time, the sum of (a) all amounts that should be
reflected as liabilities on its balance sheet, plus (b) its total direct and
indirect guaranty and other obligations in respect of borrowed money
Indebtedness of others (calculated at the maximum amount of those obligations
that is stated in the relevant documents or, if not so stated, that may
reasonably be anticipated in good faith) plus (c) to the extent not already
included in clause (a) above, its total funding obligations to originate or
acquire Mortgage Loans that, in either case, are closed but not funded, minus
(d) its total trade payables and accrued expenses incurred in the ordinary
course of its business but unrelated to
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originating or acquiring any specific Mortgage Loan (including, without
limitation, trade payables and accrued expenses owed to its Affiliates but
excluding advances by its Affiliates and interest on those advances), minus (e)
such Seller's total deferred-federal-income tax liabilities.
"Adjusted Net Worth" means, for the Seller, without duplication, and at
any time, the sum of (a) its members' equity reflected on its balance sheet,
plus (b) the remainder of (A) the income that the Seller has deferred, for
accounting purposes, pending the sale of Mortgage Loans in accordance with
Statement of Financial Accounting Standards Number 91 and Number 122, as each is
published by the Financial Accounting Standards Board as of the date of this
Agreement, minus (B) reasonable reserves for the federal income tax liabilities
related to that deferred income.
"Administrative Agent" means Calyon New York, in its capacity as
administrative agent for the Lenders, or any successor administrative agent.
"Advance" means with respect to any Lender any amount disbursed by such
Lender to the Borrower pursuant to Section 2.1 of the Second Restated Loan
Agreement (or any conversion or continuation thereof).
"Advance Rate" means (i) with respect to a Conforming Loan or a Jumbo Loan
(other than a Super Jumbo Loan), ninety-eight percent (98%), (ii) with respect
to an Alt-A Loan, ninety-seven percent (97%), or, if a FICO Score Trigger Event
has occurred and is continuing, as reported to the Collateral Agent by the
Administrative Agent, then zero, (iii) with respect to a Second Lien Loan or a
Super Jumbo Loan, ninety-five percent (95%) and (iv) with respect to a Subprime
Loan, ninety percent (90%).
"Adverse Claim" means a lien, security interest, or other charge or
encumbrance, or any other type of preferential arrangement.
"Affiliate" of any Person means (a) any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person, or (b) any other Person who is a director, officer or employee (i) of
such Person, or (ii) of any Person described in the preceding clause (a). For
purposes of this definition, the term "control" (and the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession or ownership, directly or indirectly, of the power either (x) to
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise, or (y) vote 10% or more of the securities
having ordinary power in the election of directors or managers of such Person.
"Agreement" means this Agreement, as amended, modified or supplemented
from time to time.
"Alt-A Loan" means a Mortgage Loan (other than a Conforming Loan or a
Jumbo Loan) that (1) does not conform to the conventional underwriting standards
of ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae but that is underwritten to Approved
Investor guidelines (other than ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae), within
guidelines generally acceptable to industry norms for "Alt-A" loans, (2) has a
demonstrated secondary market and are readily securitizable, and (3) matches all
applicable requirements for purchase under the requirements of a Take-Out
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Commitment specifically issued for the purchase of such Mortgage Loan, and (4)
is a First Lien Mortgage Loan.
"Alternate Base Rate" means:
(i) for the Calyon New York Group, on any date, a fluctuating rate of
interest per annum equal to the higher of:
(a) the rate of interest most recently announced by Calyon New York
as its base rate; and
(b) the Federal Funds Rate (as defined below) most recently
determined by the Administrative Agent plus 1.0% per annum; and
(ii) for the JPMorgan Group, on any date, a fluctuating rate of interest
per annum equal to the higher of:
(a) a rate per annum equal to the prime rate of interest from time
to time by JPMorgan or its parent (which is not necessarily the
lowest rate charged to any customer), changing when and as said
prime rate changes; and
(b) the Federal Funds Rate (as defined below) most recently
determined by JPMorgan plus 1.0% per annum.
For purposes of this definition, "Federal Funds Rate" means, for any
period, a fluctuating interest rate per annum equal (for each day during such
period) to (i) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the immediately preceding Business Day) by the Federal Reserve Bank of New
York; or (ii) if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent, from three federal funds brokers of recognized
standing selected by it. The Alternate Base Rate is not necessarily intended to
be the lowest rate of interest determined by Calyon New York in connection with
extensions of credit.
"Approved Investor" means:
(a) ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae, or
(b) any Person with short-term ratings of at least A-1, P-1 and F1
from S&P, ▇▇▇▇▇'▇ and Fitch, respectively, or long-term unsecured debt
ratings (or in the case of a bank without such ratings that is the
principal subsidiary of a bank holding company, the rating of the bank
holding company) of at least AA, Aa2 and AA from S&P, ▇▇▇▇▇'▇, and Fitch
respectively, or
(c) all other Persons as may be approved by the Managing Agents,
which approvals may be subject to certain concentration limits but may not
be unreasonably withheld or delayed;
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provided that (i) if an Approved Investor has a short-term rating or a
long-term unsecured debt rating at the time such Person first becomes an
"Approved Investor" and such Person's short-term ratings or long-term
unsecured debt ratings are subsequently downgraded or withdrawn, such
Person shall cease to be an "Approved Investor"; provided, further, that
with respect to any Take-Out Commitments issued by such Person prior to
the date of such downgrade or withdrawal, such Person shall cease to be an
"Approved Investor" 60 days following such downgrade or withdrawal; and
(ii) if an Approved Investor does not have a short-term rating or a
long-term unsecured debt rating, such Person shall cease to be an
"Approved Investor" upon prior written notice from either Managing Agent
if such Managing Agent has good faith concerns about the future
performance of such Person; provided, further, that with respect to any
Take-Out Commitments issued by such Person prior to such notice, such
Person shall cease to be an "Approved Investor" 60 days following such
notice.
As of the date of this Agreement, Schedule II hereto sets forth the
Approved Investors pursuant to the preceding clauses (b) and (c) (and any
applicable concentration limits). Schedule II shall be updated from time to time
as Approved Investors are added or deleted or concentration limits are changed
pursuant to the preceding clauses (b) and (c).
"Assignment and Acceptance" has the meaning set forth in the Second
Restated Loan Agreement.
"Atlantic" means Atlantic Asset Securitization Corp. and its successors
and assigns.
"Bank" means each of Calyon New York, JPMorgan, and Lloyds and each
respective Eligible Assignee (as defined in the Second Restated Loan Agreement)
that shall become a party to the Second Restated Loan Agreement pursuant to an
Assignment and Acceptance.
"Business Day" means a day on which (i) commercial banks in New York City,
New York, Chicago, Illinois, and Denver, Colorado are not authorized or required
to be closed and (ii) commercial banks in the State in which the Collateral
Agent has its principal office are not authorized or required to be closed, and
(b) if this definition of "Business Day" is utilized in connection with a
Eurodollar Advance, a day on which dealings in United States dollars are carried
out in the London interbank market.
"Calyon New York" means Calyon New York Branch and its successors and
assigns.
"Calyon New York Group" means Atlantic, La Fayette, Calyon New York, and
each other Group Bank of Atlantic and La Fayette.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral Agent" means LaSalle Bank National Association, and its
successors and assigns.
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"Collateral Value" means
(A) with respect to each Eligible Mortgage Loan and at all times, an
amount equal to the product of the Advance Rate for such Eligible Mortgage
Loan multiplied by the least of:
(1) the lesser of the original principal amount of such Eligible
Mortgage Loan or the acquisition price paid by Pulte Mortgage on the
closing and funding of such Eligible Mortgage Loan;
(2) for each Eligible Mortgage Loan, a ratable amount determined
by multiplying (a) the weighted average purchase price (expressed as a
percentage of par) that Approved Investors are obligated to pay, pursuant
to Take-Out Commitments, for all Eligible Mortgage Loans, as shown on the
most recent Hedge Report, times (b) the outstanding principal amount of
such Eligible Mortgage Loan; and
(3) while a Default or Event of Default is continuing, or upon
request of either of the Managing Agents at any other time, the Market
Value of such Eligible Mortgage Loan; and
(B) with respect to the Collection Account, the balance of collected
funds therein which is not subject to any Lien in favor of any Person
other than the Lien in favor of the Administrative Agent for the benefit
of the holders of the Obligations;
provided, however, that
(a) at any time, the portion of total Collateral Value that may be
attributable to Jumbo Loans shall not exceed twenty percent (20%) of the
Maximum Facility Amount;
(b) at any time, the portion of total Collateral Value that may be
attributable to Super Jumbo Loans shall not exceed ten percent (10%) of
the Maximum Facility Amount, which percentage is a sublimit of clause (a)
representing 50% of the 20% set forth in clause (a) above;
(c) at any time, the portion of total Collateral Value that may be
attributable to Alt-A Loans shall not exceed fifty percent (50%) of the
Maximum Facility Amount; provided that (i) if an Obligor on any Alt-A Loan
shall have a FICO Score of less than 650, or (ii) if an Alt-A Loan shall
have a Loan-to-Value Ratio of more than 95% or a Combined Loan-to-Value
Ratio of more than 100%, such Mortgage Loan shall have a Collateral Value
of zero;
(d) at any time, the portion of total Collateral Value that may be
attributable to Subprime Loans shall not exceed five (5%) of the Maximum
Facility Amount; provided that (i) if an Obligor on any Subprime Loan
shall have a FICO Score of less than 600, or (ii) if a Subprime Loan shall
have a Loan-to-Value Ratio of more than 90%, such Mortgage Loan shall have
a Collateral Value of zero;
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(e) any Mortgage Loan with an original principal balance in excess
of $1,000,000 or more and a Loan-to-Value Ratio of 75% or more shall have
a Collateral Value of zero;
(f) at any time, the portion of total Collateral Value that may be
attributable to Mortgage Loans for which the Mortgage Notes have been
withdrawn for correction pursuant to Section 3.5 of the Collateral Agency
Agreement shall not exceed five percent (5%) of the Maximum Facility
Amount, as determined in accordance with said Section 3.5 of the
Collateral Agency Agreement;
(g) at any time, the portion of the total Collateral Value that may
be attributable to any single Approved Investor listed on Schedule II
pursuant to one or more Take-Out Commitments shall not exceed the
concentration limit for such Approved Investor as set forth on Schedule II
(as the same may be updated from time to time);
(h) at any time, the portion of total Collateral Value that may be
attributable to Mortgage Loans that have been Eligible Mortgage Loans (A)
for more than 120 days shall not exceed ten percent (10%) of the Maximum
Facility Amount or (B) for more than 180 days, shall be zero;
(i) a Mortgage Loan that ceases to be an Eligible Mortgage Loan
shall have a Collateral Value of zero;
(j) at any time, (A) except the first five and last five Business
Days of any month, the portion of total Collateral Value that may be
attributable to Special Mortgage Loans with respect to which the related
Principal Mortgage Documents have not been delivered to the Collateral
Agent within nine (9) Business Days after the earlier of the date the
Assignment was delivered to the Collateral Agent or, if different, the
date of origination of the related Mortgage Loan shall not exceed thirty
percent (30%) of the Maximum Facility Amount, and (B) during the first
five and last five (5) Business Days of any month, the portion of total
Collateral Value that may be attributable to Special Mortgage Loans with
respect to which the related Principal Mortgage Documents have not been
delivered to the Collateral Agent within nine (9) Business Days after the
earlier of the date the Assignment was delivered to the Collateral Agent
or, if different, the date of origination of the related Mortgage Loan
shall not exceed fifty percent (50%) of the Maximum Facility Amount; and
(k) at any time, the portion of total Collateral Value that may be
attributable to Second Lien Loans shall not exceed ten percent (10%) of
the Maximum Facility Amount; provided that (A) if any Obligor on any
Second Lien Loan shall have a FICO Score of less than 670 or (B) if any
Second Lien Loan shall have a Combined Loan-to-Value Ratio of more than
100%, such Mortgage Loan shall have a Collateral Value of zero.
"Collection Account" means the account established by the Buyer pursuant
to Section 2.7(b) of the Second Restated Loan Agreement.
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"Collections" means, with respect to any Mortgage Asset, all cash
collections (other than in respect of escrows payable under the related Mortgage
Loan) and other cash proceeds of such Mortgage Asset.
"Combined Loan-to-Value Ratio" means, with respect to any Mortgage Loan,
the fraction, expressed as a percentage found by dividing the original principal
balance of all Mortgage Loans secured by a particular property by the value of
such Mortgage Loans, such value being measured by (i) the appraised value of
such property at such time, if a Mortgage Loan is a refinance of an existing
loan or (ii) the lower of the sales price of the related property at the time of
origination of a Mortgage Loan or the appraised value of such property at such
time, if a Mortgage Loan is a purchase money loan.
"Confirmation" is defined in Section 2.02(a) hereto.
"Conforming Loan" means (i) a Mortgage Loan that complies with all
applicable requirements for purchase under a ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or other
similar Governmental Authority standard form of conventional mortgage loan
purchase contract, then in effect, or (ii) an FHA Loan or a VA Loan, that, in
either case, is a First Lien Mortgage Loan.
"Debtor Laws" means all applicable liquidation, conservatorship,
bankruptcy, fraudulent transfer or conveyance, moratorium, arrangement,
receivership, insolvency, reorganization or similar laws from time to time in
effect affecting the rights of creditors generally.
"Default" means any condition or event that, with the giving of notice or
lapse of time or both and unless cured or waived, would constitute an Event of
Default.
"Default Rate" has the meaning ascribed to such term in the Second
Restated Loan Agreement.
"Defaulted Mortgage Loan" means a Mortgage Asset under which the Obligor
is 30 or more days in payment default or has taken any action, or suffered any
event of the type described in Section 7.01(a)(vii), 7.01(a)(viii) or
7.01(a)(ix) or is in foreclosure.
"Deferred Purchase Price" means the portion of the Purchase Price of
Purchased Mortgage Assets purchased on any Purchase Date exceeding the amount of
the Purchase Price under Section 2.02 to be paid in cash. The obligations of the
Buyer in respect of the Deferred Purchase Price shall be evidenced by the
Buyer's subordinated promissory note in the form of Exhibit A hereto.
"Eligible Institution" means any depository institution, organized under
the laws of the United States or any state, having capital and surplus in excess
of $200,000,000, the deposits of which are insured to the full extent permitted
by law by the Federal Deposit Insurance Corporation and that is subject to
supervision and examination by federal or state banking authorities; provided
that such institution also must have a rating of A or higher with respect to
long-term deposit obligations from ▇▇▇▇▇'▇ and A2 or higher with respect to
long-term deposit obligations from S&P and A or higher with respect to long-term
deposit obligations from Fitch. If such depository institution publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then the combined capital and
surplus of such corporation or limited liability company shall be deemed to be
its combined
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capital and surplus as set forth in its most recent report of condition so
published.
"Eligible Mortgage Asset" means an Eligible Mortgage Loan.
"Eligible Mortgage Collateral" means Eligible Mortgage Loans and the
Collection Account.
"Eligible Mortgage Loan" means a Mortgage Loan:
(a) that (i) is a closed and funded Mortgage Loan, (ii) has a maximum term
to maturity of 30 years and the proceeds of which were used either to finance a
portion of the purchase price of a Property encumbered by the related Mortgage
or to refinance a loan secured by such Property, and (iii) is secured by a
perfected first-priority Lien (except Second Lien Loans) on residential real
Property consisting of land and a one-to-four family dwelling thereon which is
completed and ready for owner occupancy, including townhouses and condominiums;
(b) that is a Conforming Loan, a Jumbo Loan, a Subprime Loan, a Second
Lien Loan or an Alt-A Loan;
(c) in which the Administrative Agent has been granted and continues to
hold a perfected (other than actual delivery of the Mortgage Note to the
Collateral Agent for Special Borrowings), first-priority (except Second Lien
Loans), security interest for the benefit of the holders of the Obligations;
(d) for which the Mortgage Note is endorsed (without recourse) in blank
and each of such Mortgage Loan and the related Mortgage Note is a legal, valid
and binding obligation of the Obligor thereof;
(e) for which, other than in respect of Special Mortgage Loans, the
Principal Mortgage Documents have been received by the Collateral Agent and are
in form and substance reasonably acceptable to the Collateral Agent;
(f) that is either eligible for delivery or designated for delivery under
a Take-Out Commitment from an Approved Investor; provided that no more than 45
days have lapsed since the date on which any documentation relating to such
Mortgage Loan was shipped to the related Approved Investor;
(g) that, immediately prior to the pledge thereof under the Second
Restated Collateral Agency Agreement, together with the related Mortgage Loan
Collateral, is owned beneficially by the Buyer free and clear of any Lien of any
other Person other than the Administrative Agent for the benefit of the holders
of the Obligations (except Second Lien Loans);
(h) that, together with the related Mortgage Loan Collateral, does not
contravene any Governmental Requirements applicable thereto (including, without
limitation, the Real Estate Settlement Procedures Act of 1974, as amended, and
all laws, rules and regulations relating to usury, truth-in-lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt collection
practices, privacy and other applicable federal and state consumer protection
laws) and
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with respect to which no party to the related Mortgage Loan Collateral is in
violation of any Governmental Requirements (or procedure prescribed thereby) if
such violation would impair the collectability of such Mortgage Loan or the
saleability of such Mortgage Loan under the applicable Take-Out Commitment;
(i) that, (i) is not a Seasoned Mortgage Loan or an Uncovered Mortgage
Loan; (ii) is not a Defaulted Mortgage Loan; (iii) has not previously been sold
to an Approved Investor and repurchased by Buyer; (iv) is a Mortgage Loan with
respect to which the Principal Mortgage Documents relating to such Mortgage Loan
were delivered to the Collateral Agent within the time frame set forth in
Section 2.3(c) of the Second Restated Loan Agreement; provided that, upon
delivery of such Principal Mortgage Documents to the Collateral Agent, such
Mortgage Loans may subsequently qualify as Eligible Mortgage Loans to support
Borrowings subsequent to such delivery; or (v) has an original principal balance
not in excess of $1,500,000.00;
(j) that if the Mortgage Loan Collateral has been withdrawn for correction
pursuant to Section 6.02 such Mortgage Loan Collateral has been returned to the
Collateral Agent within 14 calendar days after withdrawal as required by Section
6.02;
(k) that is denominated and payable in U.S. dollars in the United States
and the Obligor of which is a natural person who is a U.S. citizen or resident
alien or a corporation or limited liability company or other legal entity
organized under the laws of the United States or any State thereof or the
District of Columbia;
(l) that is not subject to any right of rescission, setoff, counterclaim
or other dispute whatsoever;
(m) that was acquired by the Buyer from the Seller within 60 days after
its Mortgage Origination Date;
(n) that is covered by the types and amounts of insurance required by
Section 5.06;
(o) with respect to which all representations and warranties made by the
Seller in the Second Restated Loan Agreement and this Agreement are true and
correct in all material respects and with respect to which all loan level
covenants made in the Second Restated Loan Agreement and this Agreement have
been complied with;
(p) that is subjected to the following "Quality Control" measures by
personnel of the Seller before the Mortgage Note is funded by the Seller:
(i) for those Mortgage Loans not originated by the Seller, is
underwritten by the Seller prior to funding thereof and after performance
of all underwriting procedures, is submitted to the Seller for closing
where it is reviewed for thoroughness and compliance (including
truth-in-lending, good faith estimates and other disclosures) and a verbal
verification of employment and in-file credit report are obtained;
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(ii) with respect to which, all Mortgage Loan Collateral is
prepared by the Seller and submitted to the closing agent at the time of
funding the related Mortgage Loan; and
(q) that, if it is a Second Lien Loan, has a Combined Loan-to-Value Ratio
of 100% or less and with respect to which the related first lien loan is owned
by the Seller.
For the purpose of this definition:
(x) A Mortgage Loan is "eligible for delivery" under a Take-Out Commitment
if (i) it is designated to be transferred to a Governmental Authority, (ii) the
underwriting criteria utilized and the Mortgage Loan Collateral either match, or
are in respect of interest rates (which rates must bear a relationship to
prevailing current market rates of interest for loans with similar maturities),
term, product type and delivery period representative of the terms for purchase
that are specified in a Take-Out Commitment, and (iii) the aggregate outstanding
principal of all such Mortgage Loans is not more than the aggregate Take-Out
Commitments' unutilized amount (i.e. taking in account all such Mortgage Loans
already allocated to the aggregate Take-Out Commitments for purposes of
determining Eligible Mortgage Loans whether or not already delivered by the
Buyer to the Collateral Agent).
(y) A Mortgage Loan is "designated for delivery" under a Take-Out
Commitment if (i) it is designated to be transferred to any entity other than a
Governmental Authority and (ii) the underwriting criteria utilized in approving
such Mortgage Loan conform to the underwriting criteria, and the terms of
repayment (including interest rate and "term to maturity") and other terms and
conditions of the Mortgage Loan Collateral match the specifications of that
specific Take-Out Commitment that designates that particular Mortgage Loan for
purchase.
"Employee Plan" means an employee pension benefit plan covered by Title IV
of ERISA and established or maintained by the Seller.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation, trade or business that is, along
with the Performance Guarantor, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in Sections 414(b),
(c), (m) and (o) of the Code, or Section 4001 of ERISA.
"Event of Default" has the meaning specified in Section 7.01.
"Facility" means the borrowing facility provided by the Lenders as
described in Section 2.1 of the Second Restated Loan Agreement.
"Facility Termination Date" means the earliest to occur of:
(a) August 18, 2006, or such earlier date determined in accordance with
Section 2.1(b) of the Second Restated Loan Agreement, or
14
(b) the date on which the Maximum Facility Amount is terminated by the
Borrower pursuant to Section 2.1(d) of the Second Restated Loan Agreement, and
(c) the date, on or after the occurrence of an Event of Default,
determined pursuant to Section 8.1 of the Second Restated Loan Agreement.
"▇▇▇▇▇▇ ▇▇▇" means the government sponsored enterprise formerly known as
the Federal National Mortgage Association, or any successor thereto.
"Fee Letters" is defined in the Second Restated Loan Agreement.
"FHA" means the Federal Housing Administration, or any successor thereto.
"FHA Loan" means a Mortgage Loan, the ultimate payment of which is
partially or completely insured by the FHA or with respect to which there is a
current, binding and enforceable commitment for such insurance issued by the
FHA.
"FICO Score" means, with respect to the Obligor under a particular
Mortgage Loan, a credit rating established by Fair ▇▇▇▇▇ Corporation or a market
competitor.
"FICO Score Trigger Event" means that, (i) the Pool Weighted Average FICO
Score has been reported, in a Servicer Monthly Report, as less than 690, (ii) a
period of seven Business Days has elapsed from the date of receipt of such
report by the Administrative Agent and (iii) the Servicer has not provided to
the Administrative Agent a revised Pool Weighted Average FICO Score that exceeds
690.
"Financial Officer" means (i) with respect to the Seller, its chief
financial officer, treasurer or a vice president having the knowledge and
authority necessary to prepare and deliver the financial statements and reports
required pursuant to Sections 5.1(b) and (d) and (ii) with respect to the
Performance Guarantor, the chief financial officer, the vice president-treasurer
or the senior vice president-finance.
"First Lien Mortgage Loan" means a loan secured by a perfected first lien
mortgage on real property.
"Fitch" means Fitch, Inc., and any successor thereto.
"▇▇▇▇▇▇▇ Mac" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"GAAP" means generally accepted accounting principles as in effect in the
United States from time to time.
"▇▇▇▇▇▇ Mae" means the Government National Mortgage Association, or any
successor thereto.
"Governmental Authority" means any nation or government, any agency,
department, state or other political subdivision thereof, or any instrumentality
thereof, and any entity
15
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government. Governmental Authority shall include,
without limitation, each of ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇, FHA, HUD, VA and ▇▇▇▇▇▇
Mae.
"Governmental Requirement" means any law, statute, code, ordinance, order,
rule, regulation, judgment, decree, injunction, franchise, permit, certificate,
license, authorization or other requirement (including, without limitation, any
of the foregoing that relate to energy regulations and occupational, safety and
health standards or controls and any hazardous materials laws) of any
Governmental Authority that has jurisdiction over the Seller or any of its
Property.
"Group Bank" means (1) with respect to Atlantic and La Fayette, Calyon New
York, each Bank that has entered into an Assignment and Acceptance with Calyon
New York, including Lloyds, and each assignee (directly or indirectly) of any
such Bank, which assignee has entered into an Assignment and Acceptance and (2)
with respect to Jupiter, JPMorgan, each Bank that has entered into an Assignment
and Acceptance with JPMorgan and each assignee (directly or indirectly) of any
such Bank, which assignee has entered into an Assignment and Acceptance.
"Hedge Report" means, with respect to any Conforming Loans included in the
Eligible Mortgage Collateral that is to be sold to a Governmental Authority, a
report prepared by the Servicer and pursuant to Section 3.6 of the Second
Restated Loan Agreement, showing, as of the close of business on the previous
Business Day, all trades that have been assigned to the Administrative Agent,
for the benefit of holders of the Obligations, and the following information
with respect to such trades: (i) trade counterparty, (ii) trade amount, (iii)
coupon, (iv) price, (v) type of security, (vi) date of trade, and (vii) such
other information as the Administrative Agent may reasonably request in the form
of Exhibit K to the Second Restated Loan Agreement.
"HUD" means the Department of Housing and Urban Development, or any
successor thereto.
"Indebtedness" means, for any Person, without duplication, and at any
time, (a) all obligations required by GAAP to be classified on such Person's
balance sheet as liabilities, (b) obligations secured (or for which the holder
of the obligations has an existing contingent or other right to be so secured)
by any Lien existing on property owned or acquired by such Person, (c)
obligations that have been (or under GAAP should be) capitalized for financial
reporting purposes, and (d) all guaranties, endorsements, and other contingent
obligations with respect to obligations of others.
"Indemnified Amounts" has the meaning specified in Section 8.01.
"Indemnified Party" has the meaning specified in Section 8.01.
"Interest Period" is defined in Section 2.15 of the Second Restated Loan
Agreement.
"Issuer" means any of Atlantic, Jupiter and La Fayette.
"JPMorgan" has the meaning set forth in the preamble of this Second
Restated Collateral Agency Agreement.
16
"JPMorgan Group" means Jupiter, JPMorgan and each other Group Bank of
Jupiter.
"Jumbo Loan" means a Mortgage Loan (other than a Conforming Loan) that (1)
is underwritten to Approved Investor guidelines (other than ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
Mac or ▇▇▇▇▇▇ Mae), (2) matches all applicable requirements for purchase under
the requirements of a Take-Out Commitment issued for the purchase of such
Mortgage Loan, and (3) differs from a Conforming Loan solely because the
principal amount of such Mortgage Loan exceeds the limit set for Conforming
Loans by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac from time to time, but shall not exceed
$1,000,000; provided, that a Jumbo Loan having an original principal balance in
excess of $1,000,000 but not more than $1,500,000 shall qualify as a Super Jumbo
Loan, and (4) is a First Lien Mortgage Loan. The term Jumbo Loan includes Super
Jumbo Loans.
"Jupiter" means Jupiter Securitization Corporation and its successors and
assigns.
"La Fayette" means La Fayette Asset Securitization LLC, a Delaware limited
liability company.
"Lenders" means, collectively, the Issuers and the Banks.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (whether statutory, consensual or otherwise), or
other security arrangement of any kind (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the uniform commercial code or comparable law
of any jurisdiction in respect of any of the foregoing).
"Lloyds" means Lloyds TSB Bank plc and its successors and assigns.
"Loan-to-Value Ratio" means, with respect to any Mortgage Loan, the
fraction, expressed as a percentage found by dividing the original principal
balance of a Mortgage Loan by the value of the Mortgage Loan, such value being
measured by (i) the appraised value of such property at such time, if the
Mortgage Loan is a refinance of an existing lien or (ii) the lower of the sales
price of the related property at the time of origination of the Mortgage Loan or
the appraised value of such property at such time, if the Mortgage Loan is a
purchase money loan.
"Managing Agents" means, with respect to Atlantic and La Fayette, Calyon
New York or any successor managing agent designated by such party; and, with
respect to Jupiter, JPMorgan or any successor managing agent designated by such
party.
"Margin Deficit" is defined in Section 2.03(b) hereof.
"Market Value" means at the time determined, for any (a) Mortgage Loan
(other than a Non-Conforming Loan), the market value of such Mortgage Loan based
upon the then most recent posted net yield for 30-day mandatory future delivery
furnished by ▇▇▇▇▇▇ Mae and published and distributed by Telerate Mortgage
Services, or, if such posted net yield is not available from Telerate Mortgage
Services, such posted net yield obtained by the Administrative Agent from ▇▇▇▇▇▇
▇▇▇, or (b) Non-Conforming Loan, or any other Mortgage Loan while the
17
posted rate is not available from ▇▇▇▇▇▇ Mae, the value determined by the
Administrative Agent in good faith.
"Material Adverse Effect" means, with respect to any Person, any material
adverse effect on (i) the validity or enforceability of the Master Repurchase
Agreement, this Agreement, the Notes or any other Transaction Document, (ii) the
business, operations, total Property or financial condition of such Person,
(iii) the Transferred Mortgage Assets taken as a whole, (iv) the enforceability
of the purchases of Mortgage Assets under this Agreement free of any Adverse
Claims, or (v) the ability of such Person to fulfill its obligations under this
Agreement or any other Transaction Document.
"Maximum Facility Amount" is defined in the Second Restated Loan
Agreement.
"MERS" means Mortgage Electronic Registration Systems, Inc., a Delaware
corporation.
"MERS Designated Mortgage Loan" means a Mortgage Loan registered to or by
the Originator on the MERS electronic mortgage registration system.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
"Mortgage" means a mortgage or deed of trust or other security instrument
creating a Lien on real property, on a standard form as approved by ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae or such other form as the Seller determines is
satisfactory for any Approved Investor unless otherwise directed by the Buyer or
its assignee and communicated to the Collateral Agent.
"Mortgage Assets" means, collectively, all of the Mortgage Loans,
including funds advanced for Mortgage Loans that ultimately fail to close, and
all Take-Out Commitments.
"Mortgage File" means the mortgage documents pertaining to a particular
Mortgage Loan and any additional documents required to be included in or added
to the Mortgage File pursuant to the Second Restated Loan Agreement.
"Mortgage Loan" means a loan evidenced by a Mortgage Note and secured by a
Mortgage, the beneficial interest of which has been acquired by the Buyer from
the Seller by purchase pursuant to this Agreement (with the record owner thereof
being the Seller or, in the case of a MERS Designated Mortgage Loan, MERS as
nominee for the Seller, and its successors and assigns).
"Mortgage Loan Collateral" means all Mortgage Notes and related Principal
Mortgage Documents, Other Mortgage Documents.
"Mortgage Note" means a promissory note, on a standard form approved by
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae or such other form as the Seller
determines is satisfactory for any Approved Investor unless otherwise directed
by the Buyer or its assignee and communicated to the Collateral Agent.
18
"Mortgage Origination Date" means, with respect to each Mortgage Loan, the
date that is the later of (1) the date of the Mortgage Note or (2) the date such
Mortgage Loan was funded and disbursed to or at the direction of the Obligor.
"Multiemployer Plan" means a multiemployer plan defined in Sections 3(37)
or 4001(a)(3) of ERISA or Section 414(f) of the Code to which a Seller or any
ERISA Affiliate is making or has made (or is accruing or has accrued an
obligation to make) contributions.
"Net Worth" of a Person means, as of any date of determination, the total
stockholder's or member's equity (including capital stock, additional paid-in
capital and retained earnings after deducting treasury stock) that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP but excluding the value of any investment made by such Person in an
unconsolidated Subsidiary.
"Non-Conforming Loan" means a Subprime Loan, a Jumbo Loan, a Second Lien
Loan or an Alt-A Loan.
"Note" means each or any of the promissory notes executed by the Buyer,
substantially in the form of Exhibits E-1, E-2, and E-3 of the Second Restated
Loan Agreement, together with all renewals, extensions, and replacements for any
such note.
"Obligations" means any and all present and future indebtedness,
obligations, and liabilities of the Buyer, as the borrower, to any of the
Lenders, the Collateral Agent, the Managing Agents, each Affected Party (as
defined in the Second Restated Loan Agreement), each Indemnified Party and the
Administrative Agent, and all renewals, rearrangements and extensions thereof,
or any part thereof, arising pursuant to this Second Restated Loan Agreement or
any other Transaction Document, and all interest accrued thereon, and attorneys'
fees and other costs incurred in the drafting, negotiation, enforcement or
collection thereof, regardless of whether such indebtedness, obligations, and
liabilities are direct, indirect, fixed, contingent, joint, several or joint and
several.
"Obligor" means (i) with respect to each Mortgage Note included in the
Collateral, the obligor on such Mortgage Note and (ii) with respect to any other
agreement included in the Mortgage Assets, any person from whom the Seller is
entitled to performance.
"Other Mortgage Documents" is defined in Section 3.2(c) to the Second
Restated Loan Agreement.
"Outstanding Balance" means as of any date of determination (A) with
respect to each Mortgage Loan, an amount equal to the lesser of: (i) the lesser
of the original principal amount or the acquisition price of such Mortgage Loan
paid by the Seller on the closing and funding of such Mortgage Loan; and (ii)
for each Mortgage Loan, the amount determined by multiplying (a) the weighted
average purchase price (expressed as a percentage) that Approved Investors are
committed to pay, pursuant to Take-Out Commitments, for all Eligible Mortgage
Loans, as shown on the most recent Hedge Report, multiplied by the outstanding
principal balance of such Eligible Mortgage Loan.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
19
"Performance Guarantor" means Pulte.
"Person" means any individual, corporation (including a business trust),
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization, Governmental Authority, or any
other form of entity.
"Pool Weighted Average FICO Score" means, as of any Collateral Reporting
date, the ratio of (a) the sum, for all Alt-A Loans, of the product for each
Alt-A Loan of (i) its FICO Score and (ii) its original principal balance to (b)
the sum of the original principal balances of all Alt-A Loans.
"Pricing Rate" has the meaning specified in Section 2.02.
"Principal Mortgage Documents" is defined in Section 3.2(b) to the Second
Restated Loan Agreement.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Pulte" means Pulte Homes, Inc. (formerly known as Pulte Corporation), a
Michigan corporation, and its successors and assigns.
"Pulte Mortgage" has the meaning set forth in the preamble to this
Agreement.
"Purchase" means a purchase by the Buyer of Mortgage Assets from a Seller
pursuant to Article II.
"Purchase Date" has the meaning specified in Section 2.02(a).
"Purchase Price" for any Purchase means an amount equal to the Outstanding
Balance of the Mortgage Assets that are the subject of such Purchase. "Purchase
Request" has the meaning specified in Section 2.02(a).
"Purchased Mortgage Asset" means any Mortgage Asset which has been
purchased by the Buyer pursuant to Section 2.02.
"Repurchase Date" is defined in Section 2.02(a) hereto.
"Repurchase Price" the price at which the Purchased Mortgage Assets are to
be transferred from Buyer to Seller upon termination of a transaction, which
will be determined in each case as the sum of the Purchase Price and the Price
Differential as of the end of the related Interest Period.
"Requirement of Law" as to any Person means the articles of incorporation
and by-laws or certificate of formation and limited liability company agreement
or other organizational or governing documents of such Person, and any law,
statute, code, ordinance, order, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or
20
other determination, direction or requirement (including, without limitation,
any of the foregoing that relate to energy regulations and occupational, safety
and health standards or controls and any hazardous materials laws) of any
Governmental Authority, in each case applicable to or binding upon such Person
or any of its Property or to which such Person or any of its Property is
subject.
"Restated Assignment of Account" is defined in the Second Restated
Collateral Agency Agreement.
"Restated Originator Performance Guaranty" means the Amended and Restated
Originator Performance Guaranty, in the form attached the Second Restated Loan
Agreement as Exhibit G-2, made by the Performance Guarantor in favor of the
Buyer, as borrower, and assigned to the Administrative Agent for the benefit of
the Lenders.
"Restated Performance Guaranties" means, collectively, the Restated
Servicer Performance Guaranty and the Restated Originator Performance Guaranty.
"Restated Servicer Performance Guaranty" means the Amended and Restated
Servicer Performance Guaranty, in the form attached to the Second Restated Loan
Agreement as Exhibit G-1, made by the Performance Guarantor in favor of the
Administrative Agent.
"Restated Subordination Agreement" means the Amended and Restated
Subordination Agreement, substantially in the form attached as Exhibit B to the
Second Restated Loan Agreement, executed by the Performance Guarantor and
certain of its Affiliates in favor of the Buyer and the Administrative Agent for
the benefit of the holders of the Obligations.
"S&P" means Standard & Poor's Rating Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"Seasoned Mortgage Loan" means a Mortgage Loan with a Mortgage Origination
Date that is more than 180 days prior to the current date.
"Second Lien Loan" means a Mortgage Loan secured by particular property
with respect to which at least one other higher-priority Mortgage Loan exists
secured by the same property.
"Second Restated Collateral Agency Agreement" means the Second Amended and
Restated Collateral Agency Agreement, dated as of the date hereof, among the
Buyer, as borrower, the Collateral Agent and the Administrative Agent,
substantially in the form of Exhibit D to the Second Restated Loan Agreement.
"Second Restated Loan Agreement" means the Second Amended and Restated
Loan Agreement, dated as of the date hereof, by and among the Buyer, as the
Borrower, the Issuers parties thereto, the Banks parties thereto, the Managing
Agents parties thereto, the Administrative Agent and the Servicer, as amended,
modified or supplemented from time to time.
"Servicer" means at any time the Person then authorized pursuant to
Section 11.1 of the Second Restated Loan Agreement to service, administer and
collect the Transferred Mortgage Assets. The initial Servicer shall be Pulte
Mortgage.
21
"Settlement Date" means (a) for purposes of determining fees set forth in
the Fee Letters, (i) the 10th day of each of October, January, April and July,
commencing October 10, 2002 or, if such day is not a Business Day, the next
succeeding Business Day, or (ii) on and after the Facility Termination Date, the
10th day of each calendar month or, if such day is not a Business Day, the next
succeeding Business Day, provided, however, that the Administrative Agent may,
with the consent of the Managing Agents, by notice to the Buyer and the
Servicer, select other days to be Settlement Dates (including days occurring
more frequently than once per month) and (b) for all other purposes, the 10th
day of each calendar month or, if such day is not a Business Day, the next
succeeding Business Day, commencing September 10, 2002, provided, however, on
and after the Facility Termination Date, the Administrative Agent may, with the
consent of the Managing Agents, by notice to the Buyer and the Servicer, select
other days to be Settlement Dates (including days occurring more frequently than
once per month).
"Special Borrowing" is defined in Section 2.03(c) to the Second Restated
Loan Agreement.
"Special Mortgage Loan" is defined in Section 2.3(c) to the Second
Restated Loan Agreement.
"Subprime Loan" means a Mortgage Loan (other than a Conforming Loan, a
Jumbo Loan, an Alt-A Loan or a Second Lien Loan) that (1) is underwritten to
Approved Investor guidelines, (2) matches all applicable requirements for
purchase under the requirements of a Take-Out Commitment specifically issued for
the purchase of such Mortgage Loan, and (3) differs from a Conforming Loan
because of the credit quality of the obligor, and is originated by the
Originator or by a correspondent of the Originator using the established
underwriting guidelines for subprime loans of the Originator, which are the same
underwriting guidelines that the Originator uses to originate subprime loans for
sales into the secondary mortgage market.
"Subsidiary" means, with respect to any Person, any corporation, any
limited liability company, or other entity of which securities having ordinary
voting power to elect a majority of the board of directors or the board of
managers or other persons performing similar functions are at the time directly
or indirectly owned by such Person, or one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries.
"Super Jumbo Loan" means a Jumbo Loan having an original principal balance
in excess of $1,000,000 but equal to or less than $1,500,000.
"Take-Out Commitment" means, a current, valid, binding, enforceable,
written commitment, issued by an Approved Investor, to purchase one or more
Mortgage Loans from the Seller prior to the date that is 120 days (or 180 days
to the extent Collateral Value may include Mortgage Loans that have been
Eligible Mortgage Loans for more than 120 days pursuant to paragraph (f) of the
definition of Collateral Value) from the date that such Mortgage Loan first
becomes an Eligible Mortgage Asset and at a specified price and in amounts, form
and substance reasonably satisfactory to the Managing Agents, which commitment
is not subject to any term or condition (i) that is not customary in commitments
of like nature or (ii) that, in the reasonably anticipated course of events,
cannot be fully complied with prior to the expiration thereof, which commitment
has been assigned to the Buyer (partial assignments being permitted so long as
the
22
amount assigned (together with all other Take-Out Commitments) fully covers the
amount of the Eligible Mortgage Assets); provided, that upon receipt of the
actual written confirmation (each, a "Trade Confirmation") of such trade duly
executed by the Seller and the trade counterparty (such Trade Confirmation being
held in trust for the Collateral Agent pursuant to Section 3.2(c) of the Second
Restated Loan Agreement) and promptly upon request of the Administrative Agent,
the Seller must provide such trade confirmation to the Administrative Agent. The
Administrative Agent, on behalf of the Lenders, shall have the right, without
notice, to review such Trade Confirmation at the office of, and with the
officers of, the Seller during normal business hours.
"Take-Out Commitment Documents" means (1) with respect to any Conforming
Loans, copies of all Take Out Commitments or an executed original assignment of
trade as described in the definition of "Take Out Commitment"; and (2) with
respect to Non-Conforming Loans, copies of all Take Out Commitments.
"Term" means three hundred sixty-four (364) days from the date of this
Agreement.
"Transaction Document" means any of this Agreement, the assignments
delivered pursuant to Section 3.02(a), and any and all other agreements or
instruments now or hereafter executed and delivered by or on behalf of the
Seller in connection with this Agreement or the Master Repurchase Agreement, as
any of such documents may be renewed, amended, restated or supplemented from
time to time.
"Transferred Mortgage Asset" means a Purchased Mortgage Asset.
"Transferred Mortgage Loan" means a Mortgage Loan included in the
Transferred Mortgage Assets.
"UCC" means the Uniform Commercial Code as adopted in the applicable
state, as the same may hereafter be amended.
"Uncovered Mortgage Loan" means a Mortgage Loan that would be an Eligible
Mortgage Loan but for the expiration, forfeiture, termination, or cancellation
of, or default under, the relevant Take-Out Commitment.
"VA" means the Department of Veterans Affairs, or any successor thereto.
"VA Loan" means a Mortgage Loan, the payment of which is partially or
completely guaranteed by the VA under the Servicemen's Readjustment Act of 1944,
as amended, or Chapter 37 of Title 38 of the United States Code or with respect
to which there is a current binding and enforceable commitment for such a
guaranty issued by the VA.
Section 1.02. Other Terms.
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. All terms used in Article 9 of the UCC, and not
specifically defined herein, are used herein as defined in such Article 9.
23
ARTICLE II
AMOUNTS AND TERMS OF PURCHASES
Section 2.01. Facility.
(a) The first sentence of Section 1 of the Master Repurchase Agreement is
amended in its entirety by replacing it with the following:
"From time to time prior to the occurrence and continuance of an
Event of Default and prior to the Facility Termination Date, the
Seller may present for transfer to Buyer Mortgage Assets that are
Eligible Mortgage Assets against the transfer of funds by Buyer with a
simultaneous agreement by Buyer to transfer to the Seller such Assets
at a date certain or on demand, against the transfer of funds by the
Seller, and at each such time of presentation Buyer will enter into
such Transaction."
(b) Section 1 is hereby further amended by adding the following at the end
thereof:
"Without limiting any rights of Buyer under this Master
Repurchase Agreement, no Transaction shall be for a Purchase Price
such that the cash portion thereof will be less than $5,000,000 or an
integral multiple of $10,000 in excess thereof."
(c) Every reference in the Master Repurchase Agreement to "Securities"
shall be replaced by "Mortgage Assets." Every reference in the Master Repurchase
Agreement to "Purchased Securities" shall be replaced by "Purchased Mortgage
Assets." Every reference in the Master Repurchase Agreement to "Additional
Purchased Securities" shall be replaced by "Additional Purchased Mortgage
Assets."
Section 2.02. Making Purchases.
(a) Subparagraph 3(b) of the Master Repurchase Agreement is amended by
deleting the subparagraph in its entirety and replacing it with the following:
Purchases. Each Transaction shall be initiated by request from
the Seller to the Buyer given no later than 12:00 noon (eastern time)
on the Business Day prior to the date of Purchase. Each such request
for a Purchase (each a "Purchase Request") shall specify the date of
such Purchase (which shall be a Business Day), the Mortgage Assets
included in such Purchase and the Purchase Price for such Purchase.
The Buyer shall promptly notify the Seller whether it has determined
to make such Purchase and, if so, shall deliver a written confirmation
(each, a "Confirmation"). On the date of each Purchase (each a
"Purchase Date"), the Buyer shall, upon satisfaction of the applicable
conditions set forth in Article III, pay the Purchase Price for such
Purchase by means of any one or a combination of the following: (i) a
deposit in same day funds to the Seller's account designated by the
Seller or (ii) an increase in the
24
Deferred Purchase Price.The allocation of the Purchase Price as among
such methods of payment shall be subject in each instance to the approval
of the Buyer and the Seller.
The "Repurchase Date" for each Transaction shall be the earlier
of (i) the date set forth in the applicable Confirmation and (ii) the
date determined by application of Paragraph 11 of the Master
Repurchase Agreement. The "Pricing Rate" for each Transaction shall be
set forth on the Confirmation; provided that, upon the occurrence of
and during the continuance of an Event of Default, the Pricing Rate
shall equal the Default Rate. The Confirmation, together with this
Master Repurchase Agreement, shall constitute conclusive evidence of
the terms agreed between Buyer and Seller with respect to the
Transaction to which the Confirmation relates, unless with respect to
the Confirmation specific objection is made promptly after receipt
thereof. In the event of any conflict between the terms of such
Confirmation and this Master Repurchase Agreement, this Master
Repurchase Agreement shall prevail.
(b) Subparagraph 3(c) of the Master Repurchase Agreement is amended by
replacing the first sentence of Paragraph 3(c) with the following:
In the case of Transactions terminable upon demand, such demand by
the Seller shall be for a repurchase of all Purchased Mortgage Assets
subject to the related Transaction and shall be made no later than 11:00
a.m. New York City time on the Business Day immediately preceding the day
on which such termination will be effective, which termination shall also
be on a Business Day.
(c) Paragraph 3 of the Master Repurchase Agreement is amended by adding
the following language as a new Subparagraph 3(d):
(d) This Master Repurchase Agreement shall continue in effect until the
expiration of the Facility Termination Date.
Section 2.03. Margin Maintenance.
Subparagraph 4 of the Master Repurchase Agreement is amended in its
entirety to read as follows:
(a) Daily until the expiration of the Facility Termination Date (or less
frequently if the Buyer, in its sole and absolute discretion, so elects), the
Seller, as applicable (or Servicer on Buyer's behalf) will determine (i) the
aggregate Collateral Value of all Purchased Mortgage Assets held by Buyer, (ii)
the Repurchase Price as of such date, and the Maximum Facility Amount as of such
date. Without limiting the foregoing, the Seller shall deliver to Buyer, at any
time and from time to time, information in its possession in the ordinary course
of its business with respect to the Purchased Mortgage Assets sold by it to
assist Buyer in ascertaining the Collateral Value of such Purchased Mortgage
Assets.
(b) If, on any date, the aggregate Repurchase Price exceeds the total
Collateral Value of all Eligible Mortgage Assets (a "Margin Deficit"), Buyer
may, in its sole and absolute discretion, by notice to the Seller (a "Margin
Call"), require the Seller to transfer to Buyer cash
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or additional Purchased Mortgage Assets that are reasonably acceptable to Buyer
("Additional Purchased Mortgage Assets") to eliminate such deficiency.
(c) Upon receipt of notice from Buyer at or prior to 11:00 a.m. New York
City time (which may be transmitted by facsimile), the Seller, as applicable, in
its sole discretion, shall transfer either cash or the Additional Purchased
Mortgage Assets no later than the close of business on the Business Day
immediately following the date on which a Margin Call is given. Any cash
transferred to Buyer pursuant hereto shall be held by Buyer until the Repurchase
Date and shall be applied against the Repurchase Price on the Repurchase Date.
(d) Buyer's election, in its sole and absolute discretion, not to make a
Margin Call at any time there is a Margin Deficit shall not in any way limit or
impair its right to make a Margin Call at any time a Margin Deficit exists.
Section 2.04. Collections.
Paragraph 5 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence thereof:
Notwithstanding the foregoing and except as provided in paragraph 11
of this Master Repurchase Agreement, the Seller shall hold for the benefit
of, and in trust for, Buyer all income, including without limitation all
scheduled and unscheduled principal and interest payments or any other
income (including without limitation, tax escrow payments), received by or
on behalf of the Seller with respect to such Purchased Mortgage Assets
sold by it (collectively, "Purchased Asset Income"). To the extent
required under the Second Restated Loan Agreement, the Seller shall
deposit the Purchased Asset Income (other than any Obligor's escrow
payments) in the Collection Account.
On each Settlement Date, the Buyer shall pay to the Seller accrued
interest on the Deferred Purchase Price of the related Purchased Mortgage
Assets sold by it and the Buyer may, at its option, prepay in whole or in
part the principal amount of any such Deferred Purchase Price; provided
that each such payment shall be made solely from (i) Collections of the
related Transferred Mortgage Assets after all other amounts then due from
the Buyer under the Second Restated Loan Agreement have been paid in full
and all amounts then required to be set aside by the Buyer or the Servicer
under the Second Restated Loan Agreement have been so set aside or (ii)
excess cash flow from operations of the Buyer which is not required to be
applied to the payment of other obligations of the Buyer; and provided
further, that no such payment shall be made at any time when an Event of
Default shall have occurred and be continuing. At such time following the
Facility Termination Date when all principal, interest and other amounts
owed by the Buyer under the Second Restated Loan Agreement shall have been
paid in full, the Buyer shall apply, on each Settlement Date, all
Collections of Transferred Mortgage Assets deposited to the Collection
Account pursuant to this Paragraph 5 (and not previously distributed)
ratably as between the Seller first to the payment
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of accrued interest on each related Deferred Purchase Price, and then to
the reduction of the principal amount of each related Deferred Purchase
Price.
Section 2.05. Repurchase or Substitution Procedures.
(a) Upon discovery by the Seller or the Buyer of a breach of any of the
representations and warranties made by the Seller in Section 4.01(t) of this
Agreement with respect to any Transferred Mortgage Asset, such party shall give
prompt written notice thereof to the other party, as soon as practicable and in
any event within three Business Days following such discovery. The Seller shall,
upon not less than two Business Days' notice from the Buyer or its assignee or
designee, repurchase such Transferred Mortgage Asset on the next succeeding
Settlement Date for a repurchase price equal to the Repurchase Price of such
Transferred Mortgage Asset. Each repurchase of a Transferred Mortgage Asset
shall include the Mortgage Loan Collateral with respect to such Transferred
Mortgage Asset. The proceeds of any such repurchase shall be deemed to be a
Collection in respect of such Transferred Mortgage Asset. If the Seller is not
the Servicer, the Seller shall pay to the Servicer for deposit to the Collection
Account on or prior to the next Settlement Date the Repurchase Price required to
be paid pursuant to this subsection. If the Seller is the Servicer, the Seller
shall deposit such Repurchase Price to the Collection Account on or prior to the
next Settlement Date.
(b) Upon discovery by the Seller or the Buyer of a breach by the Seller of
its covenant in Section 5.23 of this Agreement with respect to any Special
Mortgage Loan, such party shall give prompt written notice thereof to the other
parties, as soon as practicable and in any event within three Business Days
following such discovery. The Seller shall, upon not less than two Business
Days' notice from the Buyer or its assignee or designee or from the Collateral
Agent on its behalf, repurchase such Special Mortgage Loan for a repurchase
price equal to the Repurchase Price of such Special Mortgage Loan. Each
repurchase of a Special Mortgage Loan shall include the Mortgage Loan Collateral
with respect to such Special Mortgage Loan. The proceeds of any such repurchase
shall be deemed to be a Collection in respect of such Special Mortgage Loan. If
the Seller is not the Servicer, the Seller shall pay to the Servicer for deposit
to the Collection Account on or prior to the repurchase date the Repurchase
Price required to be paid pursuant to this subsection. If the Seller is the
Servicer, the Seller shall deposit such Repurchase Price to the Collection
Account on or prior to the next Settlement Date.
(c) If a Mortgage Note has been withdrawn for correction pursuant to
Section 6.02 of this Agreement and the Seller has not delivered the corrected
Mortgage Note to the Collateral Agent within twenty calendar days after such
withdrawal, the Seller shall, upon not less than two Business Days' notice from
the Buyer or its assignee or designee or from the Collateral Agent on its
behalf, repurchase the related Mortgage Loan for a repurchase price equal to the
Repurchase Price of such Mortgage Loan. Each repurchase of a Mortgage Loan shall
include the Mortgage Loan Collateral with respect to such Mortgage Loan. The
proceeds of any such repurchase shall be deemed to be a Collection in respect of
such Mortgage Loan. If the Seller is not the Servicer, the Seller shall pay to
the Servicer for deposit to the Collection Account on or prior to the repurchase
date the Repurchase Price required to be paid pursuant to this subsection. If
the Seller is the Servicer, the Seller shall deposit such Repurchase Price to
the Collection Account on or prior to the next Settlement Date.
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(d) To the extent that any of the events occur that require the Seller to
repurchase pursuant to Subsections 2.05(a), 2.05(b) and 2.05(c), but only so
long as a Margin Deficit does not exist, the Seller may elect not to repurchase
the effected purchased loans by delivering written notice to the Buyer, its
successors and assigns.
Section 2.06. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by the Seller hereunder shall be
paid or deposited no later than 11:00 a.m. (eastern time) on the day when due in
same day funds to an account designated by the Buyer from time to time, which
account shall initially be the Collection Account.
(b) The Seller shall, to the extent permitted by law, pay to the Buyer
interest on any amount not paid or deposited by such the Seller (whether as
Servicer or otherwise) when due hereunder at an interest rate per annum equal to
2% per annum above the Alternate Base Rate, payable on demand.
(c) All computations of interest and all computations of fees hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first but excluding the last day) elapsed. Whenever any payment
or deposit to be made hereunder shall be due on a day other than a Business Day,
such payment or deposit shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of such payment or
deposit.
Section 2.07. Intent of the Seller and the Buyer.
Paragraph 6 of the Master Repurchase Agreement is hereby deleted and
replaced with the following:
The Seller and the Buyer have structured this Agreement with the
intention that each Purchase of Mortgage Assets hereunder be treated as a
sale of such Mortgage Assets by the Seller to the Buyer for all purposes.
The Seller and the Buyer shall record each related Purchase as a sale or
purchase, as the case may be, on its books and records, and reflect each
related Purchase in its financial statements and tax returns as a sale or
purchase, as the case may be. In the event that, contrary to the mutual
intent of the Seller and the Buyer, any Purchase of Mortgage Assets
hereunder is not characterized as a sale or absolute transfer, the Seller
shall, effective as of the date hereof, be deemed to have granted (and the
Seller hereby does grant) to the Buyer a first priority security interest
in and to any and all Mortgage Assets, the related Mortgage Loan
Collateral and the proceeds thereof to secure the repayment of all amounts
advanced to the Seller hereunder with accrued interest thereon, and this
Agreement shall be deemed to be a security agreement.
Section 2.08. No Segregation of Assets.
Paragraph 8 of the Master Repurchase Agreement is amended by deleting
Paragraph 8 in its entirety and replacing it with the following:
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Upon transfer of the Mortgage Loans to Buyer as set forth in
Paragraph 3(a) of this Master Repurchase Agreement and until termination
of any related Transactions as set forth in Paragraphs 3(c) or 11 of this
Master Repurchase Agreement, ownership of each Mortgage Loan, including
each document in the related Mortgage File, is vested in Buyer. Upon
transfer of the Mortgage Loans to Buyer as set forth in Paragraph 3(a) of
this Master Repurchase Agreement and until termination of any Transactions
as set forth in paragraphs 3(c) or 11 of this Master Repurchase Agreement
and prior to the recordation of the assignments of mortgage by the
Collateral Agent as provided for in the Second Restated Collateral Agency
Agreement, record title in the name of the Seller or in the case of a MERS
Designated Mortgage Loan MERS as nominee for the beneficial owner to each
Mortgage shall be retained thereby 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. Nothing in this Master Repurchase
Agreement shall preclude Buyer from engaging in repurchase transactions
with the Purchased Mortgage Assets or otherwise pledging or hypothecating
the Purchased Mortgage Assets without the prior consent of the Seller, but
no such transaction or provision hereof or provision of the Second
Restated Collateral Agency Agreement shall relieve Buyer of its
obligations to transfer Purchased Mortgage Assets (and, with respect to
the Mortgage Loans, the same Mortgage Loans and not substitutes therefor)
to Seller pursuant and subject to Paragraphs 3, 4 or 11 hereof. Upon
termination of any Transactions as set forth in Paragraph 3(c) of this
Master Repurchase Agreement, Buyer agrees to execute promptly endorsements
of the mortgage notes, assignments of the mortgages and UCC-3 assignments,
releases or terminations related to such Transactions, to the extent that
such documents are prepared by the Seller for Buyer's execution, are
delivered to Buyer by the Seller and are necessary and appropriate, as
reasonably determined by the Seller, to reconvey, without recourse, to the
Seller and perfect title of like tenor to that conveyed to Buyer to the
related Mortgage Loans. Buyer shall provide cooperation in assisting and
directing the Collateral Agent to facilitate such preparation (without
expense to Buyer).
Notwithstanding anything to the contrary set forth in this Master
Repurchase Agreement, in no event shall Purchased Mortgage Assets remain
in the custody of the Seller or any affiliate of the Seller, except as
permitted under the Second Restated Collateral Agency Agreement.
Section 2.09. Substitution.
Paragraph 9 of the Master Repurchase Agreement is amended by deleting the
existing Paragraph 9 in its entirety and replacing it with the following
language:
(a) In the case of any Transaction for which the Repurchase Date is other
than the Business Day immediately following the Purchase Date and with respect
to which the Seller does not have any existing right to substitute substantially
the same Mortgage Assets for the Purchased Mortgage Assets, the Seller shall
have the right, subject to the proviso to this sentence, upon notice to Buyer,
which notice shall be given at or prior to noon (12:00 p.m.)
29
(New York time) on the preceding Business Day, to substitute substantially the
same Mortgage Assets for any Purchased Mortgage Assets; provided, however, that
Buyer, in its sole and absolute discretion, may elect, by the close of business
on the Business Day next following the Business Day on which notice is received
not to accept such substitution. In the event such substitution is accepted by
Buyer, such substitution shall be made by the Seller's transfer to Buyer of
additional Mortgage Assets, and after substitution, the substituted additional
Mortgage Loans shall be deemed to be Purchased Mortgage Assets. In the event
Buyer elects not to accept such substitution, Buyer shall offer the Seller the
right to terminate the Transaction. If the Seller elects to terminate such
Transaction (which election shall be made in writing within five (5) Business
Days of Buyer's offer to Seller of the right to terminate the transaction), the
date of termination will be determined in accordance with Paragraph 3(c) of the
Master Repurchase Agreement.
(b) In the event the Seller exercises its right to substitute or terminate
pursuant to subparagraph (a), the Seller shall be obligated to pay to Buyer, by
the close of the Business Day of such substitution or termination, as the case
may be, an amount equal to (A) Buyer's actual cost (including all fees, expenses
and commissions) of (i) entering into replacement Transactions; and (ii)
entering into or terminating hedge transactions, (B) to the extent Buyer
determines not to enter into replacement Transactions, the loss incurred by
Buyer directly arising or resulting from such substitution or termination and
(C) in the case of the termination of any Transaction, the related Repurchase
Price for such Purchased Mortgage Assets. The foregoing amounts shall be
determined and calculated solely by Buyer on a commercially reasonable basis.
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.01. Conditions Precedent to Any Purchase from the Seller.
The initial Purchase of Mortgage Assets from the Seller hereunder is
subject to the conditions precedent that the Buyer shall have received on or
before the date of such Purchase the following, each (unless otherwise
indicated) dated such date, in form and substance reasonably satisfactory to the
Buyer:
(a) Certified copies of the resolutions of the Board of Managers of the
Seller approving this Agreement and certified copies of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement.
(b) A certificate of the Secretary or Assistant Secretary of the Seller
certifying the names and true signatures of the officers of the Seller
authorized to sign this Agreement and the other documents to be delivered by it
hereunder.
(c) Acknowledgment copies or time stamped receipt copies of financing
statements, if any, and any amendments thereto, in form acceptable for filing
and duly filed on or before the date of any Purchase hereunder, naming the
Seller as the seller/debtor and the Buyer as the buyer/secured party, or other
similar instruments or documents, as the Buyer may deem necessary or desirable
under the UCC of all appropriate jurisdictions or other applicable law to
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perfect the Buyer's ownership of and security interest in the Transferred
Mortgage Assets and Mortgage Loan Collateral and Collections with respect
thereto.
(d) Acknowledgment copies or time stamped receipt copies of financing
statements, if any, in form acceptable for filing and necessary to release all
security interests and other rights of any Person in the Transferred Mortgage
Assets and Mortgage Loan Collateral previously granted by the Seller.
(e) Completed requests for information, dated on or before the date of any
Purchase hereunder, listing all effective financing statements filed in the
jurisdictions referred to in subsection (c) above that name the Seller as
debtor, together with copies of such other financing statements (none of which
shall cover any Transferred Mortgage Assets or Mortgage Loan Collateral).
(f) A favorable opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ LLP, counsel
for the Seller, as to such matters as the Buyer may reasonably request.
(g) Fully executed originals of the Second Restated Loan Agreement,
Restated Subordination Agreement, the Second Restated Collateral Agency
Agreement, and the Restated Performance Guaranties.
Section 3.02. Conditions Precedent to All Purchases.
Each Purchase hereunder shall be subject to the further conditions
precedent that:
(a) prior to 12:00 noon (eastern time) on the Business Day prior to the
date of such Purchase, the Buyer and the Collateral Agent shall have received a
▇▇▇▇ of sale and blanket assignment, in the form set forth in Exhibit B hereto,
and duly executed and delivered by the Seller, with respect to the Mortgage
Assets included in such Purchase;
(b) the Principal Mortgage Documents with respect to each Mortgage Loan
included in such Purchase, other than Special Mortgage Loans, shall have been
physically delivered to the possession of the Collateral Agent; provided that if
such Purchase includes Special Mortgage Loans, the Collateral Value of such
Special Mortgage Loans plus the Collateral Value of all Special Mortgage Loans
then owned by the Buyer shall not exceed thirty percent (30%) of the Maximum
Facility Amount (as defined in the Second Restated Loan Agreement) at such time
and during the first five and last five Business Days of any month fifty percent
(50%) of the Maximum Facility Amount (as defined in the Second Restated Loan
Agreement) at such time.
(c) Copies of the Take-Out Commitment Documents with respect to Conforming
Loans and Non-Conforming Loans shall have been delivered to the possession of,
or shall otherwise have been made available to, the Buyer or its assignee;
(d) on the date of such Purchase the following statements shall be true
(and the Seller, by accepting the amount of such Purchase, shall be deemed to
have certified that):
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(1) The representations and warranties contained in Section 4.01 are
correct in all material respects on and as of the date of such
Purchase as though made on and as of such date,
(2) No event has occurred and is continuing, or would result from
such Purchase, that constitutes an Event of Default or would
constitute a Default, and
(3) The Buyer shall not have delivered to the Seller a notice that
the Buyer shall not make any further Purchases hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations of the Seller.
Paragraph 10 of the Master Repurchase Agreement is amended by deleting the
existing language in its entirety and replacing it with the following: The
Seller represents and warrants as follows:
(a) Organization and Good Standing. It (i) is a limited liability company
duly formed and existing in good standing under the laws of the jurisdiction of
its formation, (ii) is duly qualified as a foreign limited liability company and
in good standing in all jurisdictions in which its failure to be so qualified
could have a Material Adverse Effect, (iii) has the corporate power and
authority to own its properties and assets and to transact the business in which
it is engaged and is or will be qualified in those states wherein it proposes to
transact business in the future and (iv) is in compliance with all Requirements
of Law, the failure to comply with which, individually or in the aggregate,
could have a Material Adverse Effect.
(b) Authorization and Power. It has the corporate power and requisite
corporate authority to execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party; it is duly authorized to and has
taken all corporate action necessary to authorize it to, execute, deliver and
perform this Agreement and the other Transaction Documents to which it is a
party and is and will continue to be duly authorized to perform this Agreement
and such other Transaction Documents.
(c) No Conflicts or Consents. Neither the execution and delivery by it of
this Agreement or the other Transaction Documents to which it is a party, nor
the consummation of any of the transactions herein or therein contemplated, nor
compliance with the terms and provisions hereof or with the terms and provisions
thereof, will (i) contravene or conflict with any Requirement of Law to which it
is subject, except where such contravention or conflict would not reasonably be
expected to have a Material Adverse Effect, or any indenture, mortgage, deed of
trust, or other agreement or instrument to which it is a party or by which it
may be bound, or to which its Property may be subject, except where such
contravention or conflict would not reasonably be expected to have a Material
Adverse Effect, or (ii) result in the creation or imposition of any Lien on the
Property of the Seller (other than the sale of the Transferred Mortgage Assets
as contemplated by this Agreement).
32
(d) Enforceable Obligations. This Agreement and the other Transaction
Documents to which it is a party have been duly and validly executed by it and
are its legal, valid and binding obligations, enforceable in accordance with
their respective terms, except as limited by Debtor Laws.
(e) Full Disclosure. There is no fact known to it that it has not
disclosed to the Buyer that could have a Material Adverse Effect. Neither its
financial statements nor any Purchase Request, officer's certificate or
statement delivered by it to the Buyer in connection with this Agreement,
contains or will contain any untrue statement of material fact or omits or will
omit to state a material fact necessary to make such information not misleading.
(f) No Default. It is not in default under any loan agreement, mortgage,
security agreement or other material agreement or obligation to which it is a
party or by which any of its Property is bound, if such default would also be a
Default or an Event of Default under Section 11(v) of this Master Repurchase
Agreement.
(g) Litigation.
(i) Except as set forth on Schedule II to this Agreement, there
are no actions, suits or proceedings, including arbitrations and
administrative actions, at law or in equity, either by or before any
Governmental Authority, now pending or, to its knowledge, threatened
by or against it or any of its Subsidiaries, and pertaining to any
Governmental Requirement affecting its Property or rights or any of
its Subsidiaries that if determined adversely to the Seller could
reasonably be expected to have a Material Adverse Effect.
(ii) Neither it nor any of its Subsidiaries is in default with
respect to any Governmental Requirements, which default could
reasonably be expected to have a Material Adverse Effect.
(iii) The Seller is not liable on any judgment, order or decree
(or any series of judgments, orders, or decrees) having an aggregate
liability or $100,000 or more that is not covered by insurance and
that has not been paid, stayed or dismissed within 30 days.
(h) Taxes. All tax returns required to be filed by it in any jurisdiction
have been filed and all taxes, assessments, fees and other governmental charges
upon it or upon any of its properties, income or franchises have been paid prior
to the time that such taxes could give rise to a Lien thereon, unless protested
in good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been established on its books, except where such
failure to file or pay would not reasonably be expected to have Material Adverse
Effect. It has no knowledge of any proposed tax assessment against it that would
have a Material Adverse Effect.
(i) Indebtedness. If the Servicer is the Seller or an Affiliate thereof,
the Servicer is in compliance with the maximum leverage test set forth in
Section 5.22 of this Agreement.
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(j) Permits, Patents, Trademarks, Etc.
(i) It has all permits and licenses necessary for the operation
of its business, the absence of which would reasonably be expected to
have a Material Adverse Effect.
(ii) It owns or possesses (or is licensed or otherwise has the
necessary right to use) all patents, trademarks, service marks, trade
names and copyrights, technology, know-how and processes, and all
rights with respect to the foregoing, that are necessary for the
operation of its business without any known material conflict with the
rights of others. The consummation of the transactions contemplated
hereby will not alter or impair any of such rights.
(k) Status Under Certain Federal Statutes. It is not (i) a "holding
company," or a "subsidiary company" of a "holding company" or an "affiliate" of
a "holding company," or of a "subsidiary company" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended, (ii) a "public utility," as such term is defined in the Federal Power
Act, as amended, (iii) an "investment company," or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, or (iv) a "rail carrier," or a "person controlled by or affiliated
with a rail carrier," within the meaning of Title 49, U.S.C., and it is not a
"carrier" to which 49 U.S.C. Section 11301(b)(1) is applicable.
(l) Securities Acts. It has not issued any unregistered securities in
violation of the registration requirements of the Securities Act of 1933, as
amended, or of any other Requirement of Law, and is not violating any rule,
regulation, or requirement under the Securities Act of 1933, as amended, or the
Securities and Exchange Act of 1934, as amended.
(m) No Approvals Required. Other than consents and approvals previously
obtained and actions previously taken, neither the execution and delivery of
this Agreement and the other Transaction Documents to which it is a party, nor
the consummation of any of the transactions contemplated hereby or thereby
requires the consent or approval of, the giving of notice to, or the
registration, recording or filing by it of any document with, or the taking of
any other action in respect of, any Governmental Authority that has jurisdiction
over it or any of its Property.
(n) Environmental Matters. There have been no past, and there are no
pending or threatened, claims, complaints, notices, or governmental inquiries
against it regarding any alleged violation of, or potential liability under, any
environmental laws that could reasonably be expected to have a Material Adverse
Effect. No conditions exist at, on or under any Property now or previously owned
or leased by it that could give rise to liability under any environmental law
that could reasonably be expected to have a Material Adverse Effect.
(o) Eligibility. The Seller is approved and qualified and in good standing
as a lender or seller/servicer, as follows:
(i) The Seller is a ▇▇▇▇▇▇ ▇▇▇ approved seller/servicer (in good
standing) of mortgage loans, eligible to originate, purchase, hold,
sell and service mortgage loans to be sold to ▇▇▇▇▇▇ Mae.
34
(ii) The Seller is a ▇▇▇▇▇▇▇ Mac approved seller/servicer (in
good standing) of mortgage loans, eligible to originate, purchase,
hold, sell and service mortgage loans to be sold to ▇▇▇▇▇▇▇ Mac.
(iii) The Seller is an approved ▇▇▇▇▇▇ ▇▇▇ issuer (in good
standing) of mortgage loans, eligible to originate, purchase, hold,
sell and service mortgage loans to be pooled into ▇▇▇▇▇▇ Mae MBS Pools
and to issue ▇▇▇▇▇▇ ▇▇▇ MBS.
(p) Principal Office, Etc. The principal office, chief executive office
and principal place of business of the Seller is at Englewood, Colorado.
(q) Financial Condition. (i) The Seller has delivered to the Buyer (x)
copies of the consolidated balance sheet of Pulte, as of December 31, 2004, and
the related consolidated statements of income, stockholder's equity and cash
flows of Pulte for the year ended on such date, certified by independent
certified accountants of recognized national standing; and (y) copies of the
unaudited consolidated balance sheet for Pulte, as of June 30, 2005, and the
related statements of income, stockholder's equity and cash flows of Pulte for
the six (6) months ended on such date (the "Interim Statements") and all such
financial statements fairly present the financial condition of the Seller as of
their respective dates, subject, in the case of the Interim Statements, to
normal year end adjustments and the results of operations of the Seller for the
periods ended on such dates and have been prepared in accordance with GAAP.
(i) As of the date thereof, there are no material obligations,
liabilities or Indebtedness (including contingent and indirect
liabilities and obligations or unusual forward or long-term
commitments) of the Seller that are required to be reflected therein
in accordance with GAAP and that are not reflected therein.
(ii) No change that constitutes a Material Adverse Effect has
occurred in the financial condition or business of the Seller since
June 30, 2005.
(r) Employee Benefit Plans. (i) No Employee Plan of the Seller or any
ERISA Affiliate has incurred an "accumulated funding deficiency" (as defined in
Section 302 of ERISA or Section 412 of the Code), (ii) neither the Seller nor
any ERISA Affiliate has incurred liability under ERISA to the PBGC, (iii)
neither the Seller nor any ERISA Affiliate has partially or fully withdrawn from
participation in a Multiemployer Plan, (iv) no Employee Plan of the Seller or
any ERISA Affiliate has been the subject of involuntary termination proceedings,
(v) neither the Seller nor any ERISA Affiliate has engaged in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code),
and (vi) no "reportable event" (as defined in Section 4043 of ERISA) has
occurred in connection with any Employee Plan of the Seller or any ERISA
Affiliate other than events for which the notice requirement is waived under
applicable PBGC regulations.
(s) Ownership. On the date of this Agreement, Pulte holds beneficial
ownership of 100% of the issued and outstanding shares of each class of the
stock of the Seller. The Seller is the owner of all of the issued and
outstanding shares of each class of stock of the Buyer.
(t) Eligible Mortgage Assets. Each Mortgage Asset purported to be sold by
the Seller hereunder is an Eligible Mortgage Asset as of the date of such sale,
and each such
35
Mortgage Asset, together with the related Mortgage Loan Collateral, is owned
(immediately prior to its sale hereunder) by the Seller free and clear of any
Adverse Claim (other than any Adverse Claim arising solely as the result of any
action taken by the Buyer). When Buyer acquires a Transferred Mortgage Asset by
Purchase hereunder, it shall acquire good and marketable title to such
Transferred Mortgage Asset and the related Mortgage Loan Collateral and
Collections with respect thereto free and clear of any Adverse Claim (other than
any Adverse Claim arising solely as the result of any action taken by the
Buyer), and no effective financing statement or other instrument similar in
effect covering any Transferred Mortgage Asset, any interest therein, the
related Mortgage Loan Collateral or Collections with respect thereto is on file
in any recording office except such as may be filed in favor of Buyer in
accordance with this Agreement or in connection with any Adverse Claim arising
solely as the result of any action taken by the Buyer. In addition, with respect
to each Mortgage Loan sold to the Buyer that is subsequently sold to ▇▇▇▇▇▇▇
Mac, the Seller hereby makes the representations and warranties set forth in the
▇▇▇▇▇▇▇ Mac Selling Guide and the Seller's Master Agreement and Mortgage Loan
Purchase Agreement with ▇▇▇▇▇▇▇ Mac. In addition, with respect to each Mortgage
Loan sold to Buyer that is subsequently sold to ▇▇▇▇▇▇ ▇▇▇, the Seller hereby
makes the representations and warranties (collectively, the "▇▇▇▇▇▇ Mae
Representations and Warranties") set forth in the ▇▇▇▇▇▇ ▇▇▇ Selling and
Servicing Guides, the Mortgage Selling and Servicing Contract between the Seller
and ▇▇▇▇▇▇ Mae, and Master Agreement No. MDO2278 by and among ▇▇▇▇▇▇ ▇▇▇ and the
Seller, as amended from time to time, and all subsequent master agreements
entered into by and among ▇▇▇▇▇▇ Mae and the Seller (collectively, the "▇▇▇▇▇▇
▇▇▇ Incorporated Documents") as though the ▇▇▇▇▇▇ Mae Representations and
Warranties were fully set forth herein. The ▇▇▇▇▇▇ ▇▇▇ Incorporated Documents
are incorporated herein by reference as though fully set forth herein, and the
▇▇▇▇▇▇ Mae Representations and Warranties shall survive the delivery of any
Mortgage Loan to ▇▇▇▇▇▇ ▇▇▇. Further, with respect to each Non-Conforming Loan,
the Seller hereby makes the representations and warranties set forth in the
related mortgage loan purchase agreement, seller/servicer guide or other similar
agreement with the applicable Approved Investor.
(u) No Intent to Hinder Creditors. The transfers of Transferred Mortgage
Assets by the Seller to the Buyer pursuant to this Agreement, and all other
transactions between the Seller and the Buyer, have been and will be made in
good faith and without intent to hinder, delay or defraud creditors of the
Seller.
(v) No Adverse Selection. No selection procedure was utilized by the
Seller in selecting the Transferred Mortgage Assets to be transferred to the
Buyer hereunder which the Seller reasonably believes to be adverse to the
interests of the Buyer.
(w) Trade Names. Except as set forth on Schedule I hereto, the Seller is
neither known by nor uses any trade name or doing-business as name.
36
ARTICLE V
COVENANTS
Section 5.01.
The Seller shall at all times comply with the covenants contained in this
Article V, from the date hereof until the later of the Facility Termination Date
and the date all of the Obligations are paid in full.
Section 5.02. Financial Statements and Reports.
The Seller shall furnish to the Buyer the following, all in form and
detail reasonably satisfactory to the Buyer:
(a) promptly after becoming available, and in any event within 120 days
after the close of each fiscal year of the Seller and Pulte, the audited
consolidated balance sheet of Seller and Pulte as of the end of such fiscal
year, and the related statements of income, stockholders' and members' equity
and cash flows of the Seller and Pulte for such year accompanied by (i) the
related report of independent certified public accountants which report shall be
to the effect that such statements have been prepared in accordance with GAAP
applied on a basis consistent with prior periods except for such changes in such
principles with which the independent public accountants shall have concurred
and (ii) if issued, the auditor's letter or report to management customarily
given in connection with such audit;
(b) promptly after becoming available, and in any event within 60 days
after the end of each fiscal quarter, excluding the fourth fiscal quarter of
each fiscal year of the Seller and Pulte, the unaudited consolidated balance
sheet for Pulte as of the end of such fiscal quarter and the related statements
of income, stockholders' and members' equity and cash flows of each of Pulte for
such fiscal quarter and the period from the first day of the then current fiscal
year of the Seller and Pulte through the end of such fiscal quarter, and, in the
case of those financial statements of the Seller, certified by a Financial
Officer of Seller, to have been prepared in accordance with GAAP applied on a
basis consistent with prior periods, subject to normal year-end adjustments;
(c) promptly and in any event within twenty (20) days after the request of
the Buyer at any time and from time to time, a certificate, executed by the
president or chief financial officer of the Seller, setting forth all of the
Seller's warehouse borrowings and a description of the collateral related
thereto; provided that, as long as not Event of Default has occurred and is
continuing, such request may be made no more frequently than annually;
(d) no later than 11:00 a.m. (eastern time) on the fifteenth day of each
month and within twenty (20) days after request by the Buyer, a report executed
by a Financial Officer of the Seller, in form reasonably satisfactory to the
Buyer ("Seller Report") which shall provide as of the last day of the previous
month (or of the date of such request) (i) an aging of mortgage loans owned by
the Buyer, and (ii) such other information as the Buyer may reasonably request;
37
(e) promptly after the filing or receiving thereof, copies of all reports
and notices with respect to any "reportable event" defined in Article IV of
ERISA that the Seller files under ERISA with the Internal Revenue Service, the
PBGC or the U.S. Department of Labor receives from the PBGC;
(f) immediately after becoming aware of the expiration, forfeiture,
termination, or cancellation of, or default under, any Take-Out Commitment,
telephone notice thereof confirmed in writing within one Business Day, together
with a statement as to what action the Buyer proposes to take with respect
thereto; provided that no such notice need be given if such Take-Out Commitment,
is replaced by another Take-Out Commitment;
(g) with respect to Take-Out Commitments, by noon (eastern time) on the
first Business Day of each week, a Hedge Report;
(h) at least ten Business Days prior to any change in a Seller's name, a
notice setting forth the new name and the effective date thereof; and
(i) such other information concerning the business, properties or
financial condition of the Seller as the Buyer may reasonably request.
Section 5.03. Taxes and Other Liens.
The Seller shall pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or upon any of
its Property as well as all claims of any kind (including claims for labor,
materials, supplies and rent) that, if unpaid, might become a Lien upon any or
all of its Property; provided, however, the Seller shall not be required to pay
any such tax, assessment, charge, levy or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by appropriate
proceedings diligently conducted by it or on its behalf and if it shall have set
up reserves therefor adequate under GAAP.
Section 5.04. Maintenance.
The Seller shall (i) maintain its corporate existence, rights and
franchises and (ii) observe and comply in all material respects with all
Governmental Requirements.
Section 5.05. Further Assurances.
(a) The Seller agrees from time to time, at its expense, promptly to
execute and deliver all further instruments and documents, and to take all
further actions, that may be necessary or reasonably desirable, or that the
Buyer or its assignee may reasonably request, to perfect, protect or more fully
evidence the sale of Mortgage Assets under this Agreement, or to enable the
Buyer or its assignee to exercise and enforce its respective rights and remedies
under this Agreement. Without limiting the foregoing, the Seller will, upon the
reasonable request of the Buyer or its assignee, (i) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary or desirable to perfect,
protect or evidence such Transferred Mortgage Assets; and (ii) deliver to the
Buyer and/or the Collateral Agent copies of all Mortgage Loan Collateral
relating to the
38
Transferred Mortgage Assets and all records relating thereto, whether in hard
copy or in magnetic tape or diskette format.
(b) The Seller authorizes the Buyer or its assignee to file financing or
continuation statements, and amendments thereto and assignments thereof,
relating to the Transferred Mortgage Assets, the related Mortgage Loan
Collateral and the Collections with respect thereto without the signature of the
Seller where permitted by law. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where permitted by law.
Section 5.06. Insurance.
(a) The Seller shall maintain with financially sound and reputable
insurers, insurance with respect to its Properties and business against such
liabilities, casualties, risks and contingencies and in such types and amounts
as is customary in the case of Persons engaged in the same or similar businesses
and similarly situated, including, without limitation, a fidelity bond or bonds
in form and with coverage and with a company reasonably satisfactory to the
Buyer and with respect to such individuals or groups of individuals as the Buyer
may reasonably designate.
(b) The Seller for so long as it is the Servicer of the Transferred
Mortgage Assets shall use its best efforts to cause (i) all improvements on the
land covered by each Mortgage related to any Transferred Mortgage Assets to be
insured by responsible insurance companies against fire and extended coverage
hazards under policies, binders, letters, or certificates of insurance, with a
standard mortgagee clause in favor of the original mortgagee and its successors
and, and (ii) each such policy to be in an amount equal to the lesser of the
maximum insurable value of the improvements or the original principal amount of
the Mortgage, without reduction by reason of any co-insurance, reduced rate
contribution, or similar clause of the policies or binders.
(c) In the event that the Seller shall obtain and maintain a blanket
policy issued by an issuer that has a Best rating acceptable to ▇▇▇▇▇▇ ▇▇▇
insuring against hazard losses on all of the Mortgage Loans, then, to the extent
such policy provides coverage in an amount equal to the amount required pursuant
to Section 5.05(b) and otherwise complies with all other requirements of Section
5.05(b), it shall conclusively be deemed to have satisfied its obligations as
set forth in Section 5.05(b), it being understood and agreed that such policy
may contain a deductible clause, in which case the Seller shall, in the event
that there shall not have been maintained on the related mortgaged property a
policy complying with Section 5.05(b), and there shall have been a loss which
would have been covered by such policy, deposit in the Collection Account the
amount not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as servicer of the Mortgage Loans, the
Seller agrees to prepare and present, on behalf of the Buyer, claims under any
such blanket policy in a timely fashion in accordance with the terms of such
policy. Upon request of the Buyer or its assigns, the Seller shall cause to be
delivered to the Buyer or its assigns a certified true copy of such policy and
shall use its best efforts to obtain a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified without
thirty days' prior written notice to the Buyer or its assigns.
39
Section 5.07. Accounts and Records.
The Seller shall keep books of record and account in which full, true and
correct entries will be made of all dealings or transactions in relation to its
business and activities, in accordance with GAAP. The Seller shall maintain and
implement administrative and operating procedures (including, without
limitation, an ability to re-create all records pertaining to the performance of
the Seller's obligations under the Take-Out Commitments and other agreements
made with reference to any Mortgage Loans in the event of the destruction of the
originals of such records). The Seller will keep and maintain all servicing
records, pursuant to all Governmental Requirements and as required by all
Approved Investors.
Section 5.08. Right of Inspection.
The Seller shall permit any officer, employee or agent of the Buyer or its
assignee to visit and inspect any of its Properties, examine its books of record
and accounts, and discuss its affairs, finances and accounts with its officers,
accountants and auditors, all at such times during reasonable business hours and
as often as the Buyer or its assignee may desire upon prior notice, provided,
however, that (i) except during the continuation of an Event of Default, such
inspections and examinations may be performed only once annually, and (ii) such
inspections and examinations shall be conducted in a manner that does not
interfere with the normal operations of the Seller.
Section 5.09. Notice of Certain Events.
The Seller shall promptly notify the Buyer upon (i) any dispute between
the Seller and any Governmental Authority or any other Person that, if adversely
determined, would have a Material Adverse Effect; (ii) any material adverse
change in the business, operations or financial condition of the Seller,
including, without limitation, the Seller's insolvency; (iii) any event or
condition known to it that, if adversely determined, would have a Material
Adverse Effect; (iv) the receipt of any notice from, or the taking of any other
action by any Approved Investor indicating an intent not to honor, or claiming a
default under a Take-Out Commitment, together with a detailed statement by a
responsible officer of the Seller specifying the notice given or other action
taken by such Approved Investor and the nature of the claimed default and what
action the Seller is taking or proposes to take with respect thereto, (v) the
receipt of any notice from, and or the taking of any action by any Governmental
Authority indicating an intent to cancel the Seller's right to be either a
seller or servicer of such Governmental Authority's insured or guaranteed
Mortgage Loans and (vi) the receipt of any notice of any final judgment or order
for payment of money applicable to the Seller in excess of $1,000,000.
Section 5.10. Performance of Certain Obligations.
The Seller shall perform and observe in all material respects each of the
provisions of each Mortgage Loan transferred hereunder and the related Take-Out
Commitment on its part to be performed or observed and will cause all things to
be done that are necessary to have each item of the Transferred Mortgage Assets
comply with the requirements of the related Take-Out Commitment.
40
Section 5.11. Notice of Default.
The Seller shall furnish to the Buyer immediately upon becoming aware of
the existence of any Default or Event of Default, a written notice specifying
the nature and period of existence thereof and the action that the Seller is
taking or proposes to take with respect thereto.
Section 5.12. Compliance with Laws and Material Agreements.
The Seller shall comply with (a) all applicable laws, rules, regulations
and orders, and (b) material agreements, indentures, mortgages and corporate
documents, except to the extent that the failure so to comply would not be
reasonably expected to have a Material Adverse Effect.
Section 5.13. Deposits of Proceeds.
The Seller shall not deposit or otherwise credit, or cause or permit to be
so deposited or credited, to the Collection Account, cash or cash proceeds other
than payments in respect of Take-Out Commitments and other Collections of
Transferred Mortgage Assets.
Section 5.14. Closing Instructions.
The Seller agrees to indemnify and hold the Buyer and its assignee
harmless from and against any loss, including attorneys' fees and costs,
attributable to the failure of a title insurance company, agent or approved
attorney to comply with the disbursement or instruction letter or letters of the
Seller relating to any Mortgage Loan included in the Transferred Mortgage
Assets.
Section 5.15. Special Affirmative Covenants Concerning Transferred
Mortgage Assets.
(a) The Seller shall service or cause to be serviced pursuant to the
Second Restated Loan Agreement all Mortgage Loans sold by it and included in the
Transferred Mortgage Assets in accordance with the standard requirements of the
issuers of Take-Out Commitments covering the same and all applicable ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac requirements, including without limitation taking all actions
necessary to enforce the obligations of the Obligors under such Mortgage Loans.
The Seller shall hold all escrow funds collected in respect of Mortgage Loans,
without commingling the same with any other non-escrow funds, and apply the same
for the purposes for which such funds were collected.
(b) The Seller shall, no less than on an annual basis, review financial
statements, compliance with financial parameters, ▇▇▇▇▇▇ Mae/▇▇▇▇▇▇▇ Mac
approvals (if applicable) and state licenses of all Persons from whom the Seller
acquires Mortgage Loans.
Section 5.16. Limitations on Mergers and Dissolutions.
The Seller shall not (i) merge or consolidate with or into any corporation
or limited liability company or other entity, unless the Seller is the surviving
entity of any such merger or consolidation nor (ii) liquidate or dissolve.
41
Section 5.17. Fiscal Year.
The Seller shall not change its fiscal year other than to conform with
changes that may be made to the Pulte fiscal year and then only after notice to
the Buyer and after whatever reasonable amendments are made to this Agreement as
may be required by the Buyer in order that the reporting criteria for the
financial covenants contained in this Article V remain substantially unchanged.
Section 5.18. Actions with Respect to Transferred Mortgage Assets. The
Seller shall not:
(a) Compromise, extend, release, or adjust payments on any Transferred
Mortgage Loan, accept a conveyance of mortgaged Property in full or partial
satisfaction of any Mortgage debt or release any Mortgage securing or underlying
any Transferred Mortgage Loan except as permitted by the related Approved
Investor or as contemplated in the servicing guidelines distributed thereby; or
(b) Agree to the amendment or termination of any Take-Out Commitment in
which the Buyer has an interest or to substitution of a Take-Out Commitment for
a Take-Out Commitment in which the Buyer has an interest hereunder.
Section 5.19. Net Worth.
The Seller's Net Worth shall never be less than $30,000,000.
Section 5.20. Employee Benefit Plans.
The Seller shall not permit any of the events or circumstances described
in Section 4.01(r) to exist or occur.
Section 5.21. Change of Principal Office.
The Seller shall not move its principal office, executive office or
principal place of business from the address set forth in Section 4.01(p)
without 30-days' prior written notice to the Buyer.
Section 5.22. Maximum Leverage.
The Seller shall not permit its Adjusted Liabilities to exceed 12 times
its Adjusted Net Worth.
Section 5.23. Delivery of Special Mortgage Loans.
The Seller shall deliver to the Collateral Agent, within nine (9) Business
Days after the earlier of the date of transfer hereunder of any Special Mortgage
Loan from the Seller or, if different, the date of origination of such Special
Mortgage Loan, the Principal Mortgage Documents relating to such Special
Mortgage Loan; provided that at any time, except the first five and last five
Business Days of any month, the portion of total Collateral Value that may be
42
attributable to Special Mortgage Loans with respect to which the related
Principal Mortgage Documents have not been delivered to the Collateral Agent
within nine (9) Business Days after the date the Assignment was delivered to the
Collateral Agent, shall not exceed thirty percent (30%) of the Maximum Facility
Amount (as defined in the Second Restated Loan Agreement) at such time and
during the first five and last five Business Days of any month, the portion of
total Collateral Value that may be attributable to Special Mortgage Loans with
respect to which the related Principal Mortgage Documents have not been
delivered to the Collateral Agent within nine (9) Business Days after the date
the Assignment was delivered to the Collateral Agent shall not exceed fifty
percent (50%) of the Maximum Facility Amount (as defined in the Second Restated
Loan Agreement) at such time.
Section 5.24. Change in Business.
The Seller will not make any change in the character of its business that
would adversely affect the collectability of the Transferred Mortgage Assets or
the ability of the Seller to perform its obligations under this Agreement.
Section 5.25. Separate Conduct of Business.
The Seller will: (i) maintain separate corporate records and books of
account from those of the Buyer; (ii) conduct its business from an office
separate from that of the Buyer; (iii) ensure that all oral and written
communications, including, without limitation, letters, invoices, purchase
orders, contracts, statements and applications, will be made solely in its own
name; (iv) have stationery and other business forms separate from those of the
Buyer; (v) not hold itself out as having agreed to pay, or as being liable for,
the obligations of the Buyer; (vi) not engage in any transaction with the Buyer
except as contemplated by this Agreement or as permitted by the Second Restated
Loan Agreement; (vii) continuously maintain as official records the resolutions,
agreements and other instruments underlying the transactions contemplated by
this Agreement; and (viii) disclose on its annual financial statements (A) the
effects of the transactions contemplated by this Agreement in accordance with
GAAP and (B) that the assets of the Buyer are not available to pay the creditors
of the Seller.
Section 5.26. Sales, Liens, Etc.
Except for the sales of Transferred Mortgage Assets contemplated herein,
the Seller will not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Adverse Claim upon or with respect
to, any Transferred Mortgage Asset or Mortgage Loan Collateral, or Collections
related thereto, or upon or with respect to any account to which any Collections
of any Transferred Mortgage Assets are sent, or assign any right to receive
income in respect thereof.
Section 5.27. Operations and Properties.
The Seller shall act prudently and in accordance with customary industry
standards in managing and operating its Property and shall continue to
underwrite, hedge and sell Mortgage Loans in the same diligent manner it has
applied in the past and take no greater credit or market risks than are
currently being borne by it.
43
Section 5.28. Performance Guarantor Credit Rating.
If at any time any of the senior debt of the Performance Guarantor, which
is publicly held, shall fail to bear a rating of at least BBB- by S&P, Ba1 by
▇▇▇▇▇'▇ or BBB-by Fitch, the Seller shall give the Buyer or its assigns written
notice of such change in rating, within two Business Days of the date on which
such change is announced by either of these rating agencies.
Section 5.29. Take-Out Commitments.
The Seller shall use its best efforts to obtain, and maintain in full
force and effect, Take-Out Commitments reflecting total Approved Investor
obligations, as of each determination, equal to the total of the original
principal balances of the Seller's entire portfolio of Mortgage Loans. Each of
such Take-Out Commitments shall reflect only those terms and conditions as are
permitted hereunder or are acceptable to the Administrative Agent. The Seller
shall use its best efforts to obtain, and maintain in full force and effect,
forward purchase commitments (which may include options to sell Mortgage Loans
to Approved Investors, so long as the Approved Investor is bound thereby) issued
by Approved Investors and obligating such Approved Investors to purchase a
portion of the Seller's subsequently acquired Mortgage Loans.
Section 5.30. Environmental Compliance.
The Seller shall use and operate all of its facilities and properties in
compliance with all environmental laws, keep all necessary permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters in effect and remain in compliance therewith, and handle all hazardous
materials in compliance with all applicable environmental laws, except where
failure to so comply would not reasonably be expected to have a Material Adverse
Effect.
ARTICLE VI
COVENANTS
Section 6.01. Servicing.
So long as the Second Restated Loan Agreement remains in effect, the
servicing, administration and collection of the Transferred Mortgage Assets will
be conducted by the Person designated as the Servicer pursuant to the Second
Restated Loan Agreement and in the manner provided in the Second Restated Loan
Agreement. If the Second Restated Loan Agreement is terminated, the parties
hereto agree to enter into a servicing arrangement on terms substantially
similar to those contained in the Second Restated Loan Agreement. The parties
acknowledge that the Seller has been designated as the initial Servicer pursuant
to the terms and provisions of the Second Restated Loan Agreement.
Section 6.02. Correction of Mortgage Notes.
The Buyer may from time to time request, in writing, that the Collateral
Agent deliver a Mortgage Note that constitutes Transferred Mortgage Assets so
that such Mortgage Note may be replaced by a corrected Mortgage Note. Upon
receipt by the Collateral Agent of such a request, and so long as no Default or
Event of Default shall be in existence, the Collateral Agent is
44
permitted to deliver to the Buyer or the Servicer the Mortgage Note to be
corrected, such delivery to be conditioned upon the receipt by the Collateral
Agent of a corrected Mortgage Note acceptable to it within 14 calendar days
after such delivery; provided, that at no time shall the Collateral Value of
Mortgage Notes which have been so delivered and have not been replaced with
corrected Mortgage Notes hereunder exceed $5,000,000. If the corrected Mortgage
Note is not received within such time, then, beginning on the first Business Day
following such fourteenth calendar day, the Collateral Agent shall assign such
Mortgage Loan a Collateral Value of zero.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default.
(a) Section 11 is amended by deleting such Section in its entirety and
substituting the following therefor:
(i) the Seller fails to make (A) any payment required under Section
2.03 or 2.04 by the day that such payment is due, or (B) payment of any
cost, expense, indemnity payment or other amount due hereunder, and such
failure continues for five Business Days after written notice thereof; or,
while the Seller is acting as the Servicer, the Servicer fails to make any
payment or deposit to be made by it under this Agreement or the Master
Repurchase Agreement by the third Business Day after the date such payment
is due; or
(ii) the Seller or, while the Seller is acting as the Servicer, the
Servicer fails to keep or perform any covenant or agreement contained in
this Agreement or the Master Repurchase Agreement (other than as referred
to in clause (i) above) and such failure continues unremedied beyond the
expiration of any applicable grace or notice period which may be expressly
provided for in such covenant or agreement, or, if no such period is
specified, within thirty (30) days after written notice thereof; or
(iii) [Intentionally Deleted]
(iv) any statement, warranty or representation by or on behalf of
the Seller contained in this Agreement or the Master Repurchase Agreement
or any Purchase Request, officer's certificate or other writing furnished
in connection with this Agreement, proves to have been incorrect or
misleading in any material respect as of the date made or deemed made,
provided that a breach of a representation or covenant that affects an
individual Mortgage Loan shall not constitute an Event of Default; or
(v) (i) the Seller, the Servicer (so long as the Servicer and the
Seller are the same entity) or the Performance Guarantor fails to make
when due or within any applicable grace period any payment on any other
Indebtedness with an unpaid principal balance of over $1,000,000.00
($10,000,000 with respect to the Performance Guarantor); or (ii) any event
or condition occurs under any provision contained in any such obligation
or any agreement securing or relating to such obligation (or any other
breach or default
45
under such obligation or agreement occurs) if the effect thereof is to
cause or permit with the giving of notice or lapse of time or both the
holder or trustee of such obligation to cause such obligation to become
due prior to its stated maturity; or (iii) any such obligation becomes due
(other than by regularly scheduled payments) prior to its stated maturity;
or (iv) any of the foregoing occurs with respect to any one or more items
of Indebtedness of the Seller, the Servicer (so long as the Servicer and
the Seller are the same entity) or the Performance Guarantor with unpaid
principal balances exceeding, in the aggregate, $1,000,000.00 ($10,000,000
with respect to the Performance Guarantor); or
(vi) any Purchase of Mortgage Assets hereunder and the Mortgage Loan
Collateral and the Collections with respect thereto shall for any reason
cease to constitute valid and perfected ownership of such Mortgage Assets,
Mortgage Loan Collateral and Collections free and clear of any Adverse
Claim and the Seller fails to repurchase such Mortgage Assets pursuant to
Section 2.04; or
(vii) the Seller shall generally not pay its debts as they become
due, or shall admit in writing its inability to pay its debts, or shall
make a general assignment for the benefit of creditors; or
(viii) the Seller shall (A) apply for or consent to the appointment
of a receiver, trustee, Collateral Agent, intervenor or liquidator of it
or of all or a substantial part of its assets, (B) file a voluntary
petition in bankruptcy, (C) file a petition or answer seeking
reorganization or an arrangement with creditors or to take advantage of
any Debtor Laws, (D) file an answer admitting the material allegations of,
or consent to, or default in answering, a petition filed against it in any
bankruptcy, reorganization or insolvency proceeding, or (E) take corporate
action for the purpose of effecting any of the foregoing; or
(ix) an involuntary petition or complaint shall be filed against
the Seller seeking bankruptcy or reorganization of the Seller or the
appointment of a receiver, custodian, trustee, intervenor or liquidator of
the Seller, or all or substantially all of the assets of the Seller, and
such petition or complaint shall not have been dismissed within 60 days of
the filing thereof; or an order, order for relief, judgment or, decree
shall be entered by any court of competent jurisdiction or other competent
authority approving a petition or complaint seeking reorganization of the
Seller or appointing a receiver, custodian, trustee, intervenor or
liquidator of the Seller, or of all or substantially all of assets of the
Seller; or
(x) an Event of Default shall have occurred under the Second
Restated Loan Agreement;
(each of the foregoing, an "Event of Default") then, and in any such event, the
Buyer may, by notice to the Seller, take either or both of the following
actions: (A) declare the Facility Termination Date to have occurred (in which
case the Facility Termination Date shall be deemed to have occurred) and (B)
subject to the provisions of the Second Restated Loan Agreement, designate
another Person to succeed the Seller as Servicer (without payment of any
servicer
46
termination fees); provided, that, automatically upon the occurrence of any
event (without any requirement for the passage of time or the giving of notice)
described in paragraph (vii), (viii) or (ix) of this Paragraph 11(a), the
Facility Termination Date shall occur. Upon any such declaration or designation
or upon such automatic termination, the Buyer shall have, in addition to the
rights and remedies under this Agreement, all other rights and remedies with
respect to the Transferred Mortgage Assets provided after default under the UCC
and under other applicable law, which rights and remedies shall be cumulative.
(b) The parties hereto recognize that the Seller's obligations to Buyer
under this Agreement and the Master Repurchase Agreement are special, unique and
of extraordinary character. If an Event of Default occurs hereunder, the Seller
agrees that Buyer may enforce this Agreement and the Master Repurchase Agreement
by a proceeding for specific performance or other equitable remedy including,
without limitation, a proceeding in which replevin or injunction is sought by
Buyer. The Seller hereby waives to the fullest extent permitted by law any and
all rights it may have by statute, constitution or otherwise, to (i) assert the
defense of adequacy of a remedy at law that might be asserted as a bar to such
proceeding, and (ii) the fixing, imposition or posting of a bond or other
security by Buyer as a condition to obtaining any equitable relief sought by
Buyer, which relief the Seller further agrees may be obtained ex parte without
prior notice to the Seller provided a hearing is substantially provided Seller
within a reasonable time after any ex parte relief may be granted Buyer. Seller
further agrees that the rights and remedies hereunder are cumulative, and are
not exclusive of any rights, powers, privileges, or remedies, now or thereafter
existing, at law, or in equity or otherwise.
Section 7.02. Remedies.
(a) If an Event of Default occurs with respect to the Seller, the
following rights and remedies are available to the Buyer:
(i) At the option of the Buyer, exercised by written notice to the
Seller (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.
(ii) If the Buyer exercised or is deemed to have exercised the
option referred to in subsection (a)(i) of this Section:
(A) the Seller's obligations hereunder to repurchase all
Purchased Mortgage Assets in such Transactions shall
thereupon become immediately due and payable, and
(B) 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, on a 360 day per year basis for
the actual number of days during the period from and
including the date of the exercise or deemed exercise of
such option to but excluding the date of payment of the
Repurchase Price as so increased, (x) the greater of the
Prime Rate or the
47
Pricing Rate for each such Transaction to (y) the
Repurchase Price for such Transaction as of the
Repurchase Date as determined pursuant to subsection
(a)(i) of this Section (decreased as of any day by (I)
any proceeds from the sale of Purchased Mortgage Assets
applied to the Repurchase Price pursuant to subsection
(a)(iii) of this Section, and (II) any amounts applied
to the Repurchase Price pursuant to subsection (a)(iii)
of this Section).
(iii) The Buyer may (A) immediately sell, without notice or demand of any
kind, at a public or private sale and at such price or prices as the
Buyer may reasonably deem satisfactory any or all Mortgage Assets
subject to a Transaction hereunder or (B) in its sole discretion
elect, in lieu of selling all or a portion of such Purchase Assets,
to give the Seller credit for such Purchase Assets in an amount
equal to the Collateral Value of the Purchased Mortgage Assets
against the aggregate unpaid Repurchase Price and any other amounts
owing by the Seller hereunder. The proceeds of any disposition of
Purchased Mortgage Assets shall be applied first to the costs and
expenses incurred by the Buyer in connection with the defaulting
Seller's default; second to Buyer's costs (including fees and
expenses of counsel to Buyer) of cover and/or related hedging or
similar transactions (including any transaction described in
paragraph 8 of the Master Repurchase Agreement); third to the
Repurchase Price; and fourth to any other outstanding obligation of
the Seller to the Buyer or its affiliates.
(iv) The parties recognize that it may not be possible to purchase or
sell all of the Purchased Mortgage Assets on a particular Business
Day, or in a transaction with the same purchaser, or in the same
manner because the market for such Purchased Mortgage Assets may not
be liquid. In view of the nature of the Purchased Mortgage Assets,
the parties agree that liquidation of a Transaction or the
underlying Purchased Mortgage Assets does not require a public
purchase or sale and that a good faith private purchase or sale
shall be deemed to have been made in a commercially reasonable
manner. Accordingly, Buyer may elect, in its sole discretion, the
time and manner of liquidating any Purchased Mortgage Assets and
nothing contained herein shall (A) obligate Buyer to liquidate any
Purchased Mortgage Assets on the occurrence of an Event of Default
or to liquidate all Purchased Mortgage Assets in the same manner or
on the same Business Day or (B) constitute a waiver of any right or
remedy of Buyer. However, in recognition of the parties' agreement
that the Transactions hereunder have been entered into in
consideration of and in reliance upon the fact that all Transactions
hereunder constitute a single business and contractual relationship
and that each Transaction has been entered into in consideration of
the other Transactions, the parties further agree that Buyer shall
use its best efforts to liquidate all Transactions hereunder upon
the occurrence of an Event of Default as quickly as is prudently
possible in the good faith judgment of Buyer.
(v) Buyer shall, without regard to the adequacy of the security for the
Seller's obligations under this Agreement and the Master Repurchase
Agreement, be entitled to the appointment of a receiver by any court
having jurisdiction, without
48
notice, to take possession of and protect, collect, manage,
liquidate, and sell the Purchased Mortgage Assets or any portion
thereof, and collect the payments due with respect to the Purchase
Assets or any portion thereof. The Seller shall pay all costs and
expenses incurred by Buyer in connection with the appointment and
activities of such receiver.
(vi) Buyer shall have all the rights and remedies provided herein,
provided by applicable federal, state, foreign, and local laws
(including, without limitation, the rights and remedies of a
security party under the Uniform Commercial Code of the State of
New York, to the extent that the Uniform Commercial Code is
applicable, and the right to offset any mutual debt and claim), in
equity, and under any other agreement between Buyer and the Seller.
(vii) 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)(i) and (iii) of this
Section, at any time thereafter without notice to the Seller. All
rights and remedies arising under this Agreement and the Master
Repurchase Agreement as amended from time to time hereunder are
cumulative and not exclusive of any other rights or remedies which
Buyer may have.
(viii) In addition to its rights hereunder, Buyer shall have the right to
proceed against any assets of Seller which may be in the possession
of Buyer or its designee (including the Custodian), including the
right to liquidate such assets and to set off the proceeds against
monies owed by the Seller to Buyer pursuant to this Agreement and
the Master Repurchase Agreement. Buyer may set off cash, the
proceeds of the liquidation of the Purchased Mortgage Assets or
proceeds thereof, and all other sums or obligations owed by the
Seller to Buyer against all of Seller's obligations to Buyer,
whether under this Agreement and the Master Repurchase Agreement,
under a Transaction, or under any other agreement between the
parties, or otherwise, whether or not such obligations are then
due, without prejudice to Buyer's rights to recover any deficiency.
Any cash, proceeds, or property in excess of any amounts due, or
which Buyer reasonably believes may become due, to it from the
Seller shall be returned to the Seller after satisfaction of all
obligations of Seller to Buyer.
(ix) Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and the Seller hereby expressly waives
any defense the Seller might otherwise have to require Buyer to
enforce its rights by judicial process. The Seller also waives any
defense the Seller might otherwise have arising from the use of
nonjudicial process, enforcement and sale of all or any portion of
the Repurchase Items, or from any other election of remedies. The
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.
(x) Notwithstanding anything to the contrary herein, the Buyer shall
have no right to proceed against any assets of the Seller other
than the Purchased Mortgage Assets in the event of a default in the
Seller's obligation to repurchase any Purchased Mortgage
49
Assets pursuant to Section 3(b) or 3(c) of the Master Repurchase
Agreement, as modified by this Agreement. Such obligation of the
Seller to repurchase Purchased Mortgage Assets pursuant to Section
3(b) and 3(c) of the Master Repurchase Agreement, as modified by
this Agreement, shall be recourse solely to the Purchased Mortgage
Assets, in the aggregate, and the Seller shall have no obligation in
respect of any deficiencies. By contrast, the Seller's obligation to
repurchase Purchased Mortgage Assets pursuant to Section 2.5
hereunder shall be recourse to the assets of the Seller.
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnities by the Seller.
Without limiting any other rights which the Buyer may have hereunder or
under applicable law, the Seller hereby agrees to indemnify the Buyer and its
assigns and transferees (each, an "Indemnified Party") from and against any and
all damages, claims, losses, liabilities and related costs and expenses,
including attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts"), awarded against or incurred
by any Indemnified Party arising out of or as a result of this Agreement or the
purchase of any Transferred Mortgage Assets or in respect of any Transferred
Mortgage Asset or any related Mortgage Loan Collateral, including, without
limitation, arising out of or as a result of:
(a) the inclusion, or purported inclusion, in any Purchase of any Mortgage
Asset that is not an Eligible Mortgage Asset on the date of such Purchase, or
the characterization in any statement made by the Seller of any Transferred
Mortgage Asset as an Eligible Mortgage Asset which is not an Eligible Mortgage
Asset as of the date of such statement;
(b) any representation or warranty or statement made or deemed made by the
Seller (or any of its officers) under or in connection with this Agreement,
which shall have been incorrect when made;
(c) the failure by the Seller to comply with any applicable law, rule or
regulation with respect to any Transferred Mortgage Asset or the related
Mortgage Loan Collateral, or the failure of any Transferred Mortgage Asset or
the related Mortgage Loan Collateral to conform to any such applicable law, rule
or regulation;
(d) the failure to vest in the Buyer absolute ownership of the Mortgage
Assets that are, or that purport to be, the subject of a Purchase under this
Agreement and the Mortgage Loan Collateral and Collections in respect thereof,
free and clear of any Adverse Claim;
(e) the failure of the Seller to have filed, or any delay in filing,
financing statements or other similar instruments or documents under the UCC of
any applicable jurisdiction or other applicable laws with respect to any
Mortgage Assets that are, or that purport to be, the subject of a Purchase under
this Agreement and the Mortgage Loan Collateral and Collections in respect
thereof, whether at the time of any Purchase or at any subsequent time;
50
(f) any claim by any Obligor arising out of the Seller's activities in
connection with originating or purchasing any Transferred Mortgage Asset or any
offset by any Obligor against the Seller arising out of acts by the Seller;
(g) any failure of the Seller, as Seller or Servicer, to perform its
duties or obligations in accordance with the provisions hereof or to perform its
duties or obligations under any Mortgage Loan Collateral related to a
Transferred Mortgage Asset;
(h) the commingling of Collections of Transferred Mortgage Assets by the
Seller or a designee of the Seller, as Servicer or otherwise, at any time with
other funds of the Seller or an Affiliate of the Seller;
(i) any investigation, litigation or proceeding related to this Agreement
or the use of proceeds of Purchases or the ownership of Transferred Mortgage
Assets or the Mortgage Loan Collateral or Collections with respect thereto or in
respect of any Transferred Mortgage Asset or related Mortgage Loan Collateral;
(j) any failure of the Seller to comply with its covenants contained in
Section 5.01; or
(k) any claim brought by any Person other than an Indemnified Party
arising from any activity by the Seller or any Affiliate of the Seller in
servicing, administering or collecting any Transferred Mortgage Asset.
It is expressly agreed and understood by the parties hereto (i) that the
foregoing indemnification is not intended to, and shall not, constitute a
guarantee of the collectibility or payment of the Transferred Mortgage Assets
and (ii) that nothing in this Section 8.01 shall require Seller to indemnify any
Person (A) for Mortgage Assets which are not collected, not paid or
uncollectible on account of the insolvency, bankruptcy, or financial inability
to pay of the applicable Obligor, (B) for damages, losses, claims or liabilities
or related costs or expenses resulting from such Person's gross negligence or
willful misconduct, or (C) for any income taxes or franchise taxes incurred by
such Person arising out of or as a result of this Agreement or in respect of any
Transferred Mortgage Asset or any related Mortgage Loan Collateral.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement or consent to
any departure by the Seller therefrom shall be effective unless in a writing
signed by the Buyer, and by any assignee of the Buyer if the amendment or waiver
in any way affects any right, remedy or obligation of the Buyer to such
assignee, and, in the case of any amendment, also signed by the Seller, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Buyer or any assignee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
51
Section 9.02. Notices, Etc..
All notices and other communications hereunder shall, unless otherwise
stated herein, be in writing (which shall include facsimile communication) and
be faxed or delivered, to each party hereto, at its address set forth under its
name on the signature pages hereof or at such other address as shall be
designated by such party in a written notice to the other parties hereto.
Notices and communications by facsimile shall be effective when sent (and shall
be followed by hard copy sent by regular mail), and notices and communications
sent by other means shall be effective when received.
Section 9.03. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the benefit of the
Seller, the Buyer and their respective successors and assigns; provided,
however, that the Seller may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Buyer, or as
provided in the next sentence. In connection with any sale or assignment by the
Buyer of all or a portion of the Transferred Mortgage Assets, the buyer or
assignee (including ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or any other Approved Investor or
other purchaser to whom rights under this Agreement may be assigned but only
with respect to an assignment made following and during the continuance of an
Event of Default), as the case may be, shall, to the extent specifically
provided in connection with its purchase or assignment, under a master agreement
or otherwise (in the case of Mortgage Loans delivered to ▇▇▇▇▇▇ Mae), have all
rights and remedies of the Buyer under this Agreement (as if such buyer or
assignee, as the case may be, were the Buyer hereunder) and without limitation
of the foregoing, all representations and warranties (including ▇▇▇▇▇▇ ▇▇▇
Representations and Warranties in the case of Mortgage Loans delivered to ▇▇▇▇▇▇
Mae) made by the Seller to Buyer shall be directly enforceable by such buyer or
assignee, except to the extent specifically provided in the agreement between
the Buyer and such buyer or assignee, as the case may be.
(b) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time, after the Facility Termination Date,
when all of the Obligations are paid in full; provided, however, that rights and
remedies with respect to any breach of any representation and warranty made by
the Seller pursuant to Article IV and the provisions of Article VIII and
Sections 9.04 and 9.05 shall be continuing and shall survive any termination of
this Agreement.
Section 9.04. Costs, Expenses and Taxes, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the Buyer
pursuant to Article VIII hereof, the Seller agrees to pay on demand all
out-of-pocket costs and expenses in connection with the preparation, execution
and delivery of this Agreement and the other documents and agreements to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Buyer with respect thereto and with
respect to advising the Buyer as to its rights and remedies under this
Agreement, and the Seller agrees to pay all reasonable costs and expenses, if
any (including counsel fees and expenses), in connection with the enforcement of
this Agreement and the other documents to be delivered hereunder excluding,
however, any costs of enforcement or collection of Transferred
52
Mortgage Assets which are not paid on account of the insolvency, bankruptcy or
financial inability to pay of the applicable Obligor.
(b) In addition, the Seller agrees to pay any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, and the Seller agrees to save each Indemnified Party harmless from
and against any liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.
Section 9.05. No Proceedings.
The Seller hereby agrees that it will not institute against the Buyer any
proceeding of the type referred to in Section 7.01(a)(viii) or (ix) so long as
there shall not have elapsed one year plus one day since the later of (i) the
Facility Termination Date and (ii) the date on which all of the Obligations are
paid in full.
Section 9.06. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW WHICH SHALL APPLY HERETO).
Section 9.07. Third Party Beneficiary.
Each of the parties hereto hereby acknowledges that the Buyer may assign
or grant a security interest in all or any portion of its rights under this
Agreement and that such assignees may (except as otherwise agreed to by such
assignees) further assign or grant a security interest in their rights under
this Agreement, and the Seller hereby consents to any such assignments or grants
of security interests. All such assignees, including parties to the Second
Restated Loan Agreement in the case of assignment or the grant of a security
interest to such parties, shall be third party beneficiaries of, and shall be
entitled to enforce the Buyer's rights and remedies under, this Agreement to the
same extent as if they were parties thereto, except to the extent specifically
limited under the terms of their assignment. Notwithstanding any provision to
the contrary contained in this Agreement, with respect to each Mortgage Loan
sold to Buyer that is subsequently sold to ▇▇▇▇▇▇ ▇▇▇, in addition to the other
rights and remedies granted herein, ▇▇▇▇▇▇ Mae shall have, and may exercise any
and all rights and remedies that are available to ▇▇▇▇▇▇ ▇▇▇ under the ▇▇▇▇▇▇
Mae Incorporated Documents as a result of a breach of any of the ▇▇▇▇▇▇ ▇▇▇
Representations and Warranties. ▇▇▇▇▇▇ Mae's definition or determination of what
event constitutes a breach shall be determinable by ▇▇▇▇▇▇ ▇▇▇ under the terms
of the ▇▇▇▇▇▇ Mae Incorporated Documents. All rights and remedies granted herein
are cumulative and non-exclusive, and the exercise of any one shall not preclude
the exercise of others.
53
Section 9.08. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement.
Section 9.09. Repurchase Transactions.
Buyer may in its sole discretion engage in repurchase transactions with
the Purchased Mortgage Assets or otherwise pledge or hypothecate the Purchased
Mortgage Assets with a counterparty of Buyer's choice; provided, however, that
no such transaction by Buyer shall relieve Buyer of its obligations to Seller in
connection with the repurchase by Seller of any Purchased Mortgage Assets in
accordance with the terms of this Agreement and that, upon demand by Seller,
Buyer shall redeliver to Seller such repurchased Purchased Mortgage Assets as
are specifically identified by Seller free and clear of any liens or
encumbrances created, or permitted or suffered to be created, by Buyer.
54
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
SELLER AND SERVICER: PULTE MORTGAGE LLC
By: __________________________
Name: ________________________
Title: _______________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BUYER: PULTE FUNDING, INC.
By: __________________________
Name: ________________________
Title: _______________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
55
EXHIBIT A
FORM OF
DEFERRED PURCHASE PRICE NOTE
________, 20__
FOR VALUE RECEIVED, PULTE FUNDING, INC., a Michigan corporation (the
"Buyer"), hereby promises to pay to PULTE MORTGAGE LLC, a Delaware limited
liability company (the "Seller") the principal amount of this Note, determined
as described below, together with interest thereon at a rate per annum equal at
all times to the Pricing Rate for periods of one month, in each case in lawful
money of the United States of America. Capitalized terms used herein but not
defined herein shall have the meanings assigned to such terms in the Master
Repurchase Agreement dated as of December 22, 2000 among the Seller and the
Buyer (such agreement, as it may from time to time be amended, restated or
otherwise modified in accordance with its terms, the "Master Repurchase
Agreement"), as modified by the Second Amended and Restated Addendum to Master
Repurchase Agreement thereto, dated as of August 19, 2005 (the "Addendum
Agreement" and, together with the Master Repurchase Agreement the "Repurchase
Agreement"). This Note is the note referred to in the definition of "Deferred
Purchase Price" in the Repurchase Agreement.
The aggregate principal amount of this Note at any time shall be equal to
the difference between (a) the sum of the aggregate principal amount of this
Note on the date of the issuance hereof and each addition to the principal
amount of this Note pursuant to the terms of Paragraph 3 of the Master
Repurchase Agreement minus (b) the aggregate amount of all payments made in
respect of the principal amount of this Note, in each case, as recorded on the
schedule annexed to and constituting a part of this Note, but failure to so
record shall not affect the obligations of the Buyer to the Seller.
The entire principal amount of this Note shall be due and payable on the
date one year after the Facility Termination Date or such later date as may be
agreed in writing by the Seller and the Buyer. The principal amount of this Note
may, at the option of the Buyer, be prepaid without penalty in whole at any time
or in part from time to time. Interest on this Note shall be paid in arrears on
each Settlement Date, at maturity and thereafter on demand. All payments
hereunder shall be made by wire transfer of immediately available funds to such
account of the Seller as the Seller may designate in writing.
Notwithstanding any other provisions contained in this Note, in no event
shall the rate of interest payable by the Buyer under this Note exceed the
highest rate of interest permissible under applicable law.
The indebtedness evidenced by this Deferred Purchase Note is subordinated
to the prior payment in full of all of the Buyer's obligations under the Second
Restated Loan Agreement. By its acceptance of this Deferred Purchase Price Note,
the Seller hereby agrees that the subordination provisions contained herein are
for the direct benefit of, and may be enforced by, the Lenders, the
Administrative Agent, the Collateral Agent, and/or any of their assignees
(collectively, the "Senior Claimants") under the Second Restated Loan Agreement.
Until the date on which the Advances outstanding under (and as defined in) the
Second Restated Loan Agreement have been repaid in full and all other
obligations of the Buyer thereunder (all such obligations, collectively, the
"Senior Claim") have been indefeasibly satisfied in full, the Seller shall not
demand, accelerate, ▇▇▇ for, take, receive or accept from the Buyer, directly or
indirectly, in cash or other property or by set-off or any other manner
(including, without limitation, from or by way of collateral) any payment or
security of all or any of the indebtedness under this Deferred Purchase Price
Note or exercise any remedies or take any action or proceeding to enforce the
same; provided, however, that nothing in this paragraph shall restrict the Buyer
from paying, or the Seller from requesting, any payments under this Deferred
Purchase Price Note so long as the Buyer is not required under the Second
Restated Loan Agreement to set aside for the benefit of, or otherwise pay over
to, any of the Senior Claimants the funds used for such payments and further
provided that no Event of Default shall have occurred and be continuing and the
making of such payment would not otherwise violate the terms and provisions of
the Second Restated Loan Agreement. Should any payment, distribution or security
or proceeds thereof be received by the Seller in violation of the immediately
preceding sentence, the Seller agrees that such payment shall be segregated,
received and held in trust for the benefit of, and deemed to be the property of,
and shall be immediately paid over and delivered to the Collateral Agent for the
benefit of the Senior Claimants.
The Buyer hereby waives diligence, presentment, demand, protest and notice
of any kind whatsoever.
Neither this Note, nor any right of the Seller to receive payments
hereunder, shall, without the prior written consent of the Buyer and (so long as
the Second Restated Loan Agreement remains in effect or any amounts remain
outstanding thereunder) the Administrative Agent under the Second Restated Loan
Agreement, be assigned, transferred, exchanged, pledged, hypothecated,
participated or otherwise conveyed.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW WHICH SHALL APPLY HERETO).
PULTE FUNDING, INC.
By: _____________________
Title:
Name:
57
SCHEDULE TO DEFERRED PURCHASE PRICE NOTE
Addition to Principal Amount of Principal Unpaid Principal Notation Made
Date Amount Paid or Prepaid Balance By
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EXHIBIT B
FORM OF
▇▇▇▇ OF SALE AND
BLANKET ASSIGNMENT OF ELIGIBLE MORTGAGE ASSETS
▇▇▇▇ OF SALE, dated as of _____________, 20__, from PULTE MORTGAGE LLC, a
Delaware limited liability company, (hereinafter, together with its successors
and assigns, the "Seller"), to PULTE FUNDING, INC., a Michigan corporation,
(hereinafter, together with its successors and assigns, the "Buyer"). All terms
used herein which are not defined herein shall have the meanings given to them
in the Master Repurchase Agreement, dated as of December 22, 2000, as amended by
the Second Amended and Restated Addendum to Master Repurchase Agreement, dated
as of August 19, 2005 (the "Agreement") by and among the Seller, as seller, and
Buyer, as buyer.
WHEREAS, pursuant to the Agreement, the Seller agreed to grant, sell,
assign, convey, transfer and deliver to the Buyer, from time to time, certain
Eligible Mortgage Assets.
NOW, THEREFORE, in consideration of the payment of the Purchase Price for
the Eligible Mortgage Assets set forth on Schedule 1 attached hereto and made a
part hereof (the "Purchased Eligible Mortgage Assets"), and other good and
valuable consideration, the receipt of which is hereby acknowledged, and
intending to be legally bound hereby, the Seller by these presents does hereby
sell, convey, grant, transfer, assign, and set over to, subject to the terms of
the Agreement, Buyer, its successors and assigns, all of the Seller's right,
title and interest, legal or equitable, in and to the Purchased Eligible
Mortgage Assets. The terms of this ▇▇▇▇ of Sale shall not supersede the terms of
the Agreement.
IN WITNESS WHEREOF, the Seller has caused this ▇▇▇▇ of Sale to be executed
as of the date written above.
SELLER: PULTE MORTGAGE LLC
By:
Name:
Title:
Schedule 1 to ▇▇▇▇ of Sale
Purchased Eligible Mortgage Assets
[Attached]
SCHEDULE I
TRADE NAMES
None
SCHEDULE II
APPROVED INVESTORS
TAKE-OUT INVESTORS LIMIT ▇▇▇▇▇'▇ ▇▇/ST S&P LT/ST RATED ENTITY
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ABN AMRO Incorporated 100% Aa3/P-1 AA-/A-1+ ▇▇▇▇▇ ▇▇-/F1+
American Home Mortgage 10% NR NR
Astoria Financial Corp. 25% Baa1 BBB-/A-2 Fitch BBB+/F2
Aurora Loan Services, Inc. 100% A1/P-1 A/A1 Fitch A+/F1
Banc of America Securities LLC 100% P-1 A-1+ Fitch F1+
Banc One Capital Markets, Inc. 100% A1 BBB Fitch F2
Banc One Corp. 100% A1 BBB Fitch F2
Bank of America Mortgage 100% P-1 A-1+ Fitch F1+
Barclays Capital Inc. 100% P-1 A-1+ Fitch F1+
Bear, ▇▇▇▇▇▇▇ & Co., Inc. 100% P-1 A-1 Fitch F1+
BNP Paribas Securities Corp. 100% P-1 A-1 Fitch F1+
Charter One Financial Inc. 10% NR ▇▇
▇▇▇▇▇ Financial Corp. 100% Aa3/P-1 A+/A1 Fitch A+/F1
Chase Manhattan Mortgage
Corporation 100% Aa3/P-1 A+/A1 Fitch A+/F1
Chase Securities Inc. 100% Aa3/P-1 A+/A1 Fitch A+/F1
CIBC World Markets Corp. 100% Aa3/P-1 NR
Citicorp Mortgage Corp. 100% Aa1/P-1 AA-/A-1+ Fitch AA+/F1+
Colorado Housing Finance
Authority 100% Aaa AA-/A1+
Commercial Federal Corp. 10% WR BB+ Fitch BBB-/F3
Countrywide 100% ▇▇/▇-▇ ▇/▇-▇ ▇▇▇▇▇ ▇/▇▇
▇▇▇▇ 100% Aa3/P-1 A+/A-1 ▇▇▇▇▇ ▇▇-/F1+
Daiwa Securities America, Inc. 25% Baa3 BBB/A-2 Fitch BBB/F2
Dakota County Bond (Minnesota) 100% Aaa NR
Deutsche Bank Securities Inc. 100% Aa3/P-1 AA-/A-1+ ▇▇▇▇▇ ▇▇-/F1+
Dresdner Kleinwort
▇▇▇▇▇▇ North America LLC 100% ▇▇/▇-▇ ▇/▇-▇ ▇▇▇▇▇ ▇/▇▇
▇*▇▇▇▇▇ 10% Ba3 BB
TAKE-OUT INVESTORS LIMIT ▇▇▇▇▇'▇ ▇▇/ST S&P LT/ST RATED ENTITY
--------------------------------------------------------------------------------
Federal Home Mortgage Corp. 100% Aaa/P-1 AAA/ A1+
Federal National Mortgage
Association 100% Aaa/P-1 AAA
Fidelity Bancshares, Inc. 100% Aa3/P-1 AA-/A-1+ Fitch A+
First Franklin 10% NR NR
First Nationwide Mortgage
Corporation 10% NR NR
First Union Mortgage
Corporation 100% Aa3/P-1 A+/A-1 ▇▇▇▇▇ ▇▇-/F1+
Fleet Mortgage group 100% Aa2/WR ▇▇ ▇▇▇▇▇ AA-/F1+
Florida Housing Finance
Agency 100% Aa1 NR
Fuji Securities Inc. 100% WR A2 ▇▇▇▇▇ ▇▇
GE Capital Mortgage
Services Inc. 100% Aaa/P-1 AAA/A-1+
GMAC Mortgage 25% Baa2/P-2 BB/B-1 Fitch BB+/B
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 100% Aa3/P-1 A+/A-1 ▇▇▇▇▇ ▇▇-/F1+
Government National Mortgage
Association. 100% Aaa AAA
Greenpoint Mortgage (formerly
Headlands Mortgage) 100% A2 ▇▇ ▇▇▇▇▇ A-
Greenwich Capital Markets, Inc. 100% Aa3 AA- Fitch F1+
Homeside Lending Inc. 10% WR ▇▇ ▇▇▇▇▇ WR
Housing Finance Authority of
Broward County (FL) 10% Aaa NR
HSBC Securities (USA) Inc. 100% Aa3/P-1 A+/A-1 ▇▇▇▇▇ ▇▇/F1+
Illinois Housing Development
Authority 100% Aaa AA-/A1+
Indy Mac (Independent National
Mortgage Corp.) 25% NR BB+ Fitch BBB-/F2
▇. ▇. ▇▇▇▇▇▇ Securities, Inc. 100% Aa3/P-1 A+/A1 Fitch A+/F1
Leader Mortgage Corp. 10% NR ▇▇
▇▇▇▇▇▇ Brothers Inc. 100% ▇▇/▇-▇ ▇/▇▇ ▇▇▇▇▇ ▇▇/▇▇
▇▇▇▇ ▇▇▇▇▇ Financial Corp. 10% NR NR
Maryland Housing Opportunities
Commission (HOC) 10% NR ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Government
Securities Inc. 100% Aa3/P-1 A+/A-1 ▇▇▇▇▇ ▇▇-/F1+
Minnesota Housing Finance
Agency 10% NR ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated 100% Aa3/P-1 A+/A1 Fitch A+/F1
▇▇▇▇▇▇▇ ▇▇▇▇▇ Securities Inc. 100% Aa3/P-1 AA-/A-1+ ▇▇▇▇▇ ▇▇-/F1+
Nevada State Housing Finance
Agency 10% NR ▇▇
▇▇▇▇▇'▇ S&P RATED
TAKE-OUT INVESTORS LIMIT LT/ST LT/ST ENTITY
--------------------------------------------------------------------------------
New Jersey Housing Finance
Agency 10% NR ▇▇
▇▇▇▇▇▇ Securities International,
Inc. 25% Baa1 BBB+/A-2 Fitch BBB/F2
North Carolina HFA 100% Aa3 AA-/A1+
Ohio Savings Financial Corp.
(Ohio Savings Bank) 10% NR NR
Opteum Financial Services 10% NR NR
PaineWebber Incorporated 100% Aa2/P-1 ▇▇ ▇▇▇▇▇ AA+/F1+
Pinellas County Finance
Authority 100% Aaa A-
Pulte Corporation 25% Baa3 BBB- Fitch BBB+
Regions Mortgage, Inc.
(Regions Bank) 100% A1 A Fitch A+/F1
Residential Mortgage Inc. 10% NR ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 100% Aa1/P-1 AA-/A-1+ Fitch AA+/F1+
Saxon Mortgage, Inc. 10% NR NR
▇▇ ▇▇▇▇▇ Securities Corporation 100% Aa2/P-1 AA-/A-1+ ▇▇▇▇▇ ▇▇-/F1+
Texas Department of Housing and
Community Affairs (TDHCA) 10% Aaa AA/A1+
Texas Veteran Land Bond and bon
VLB Loans 10% NR NR
The Industrial Development
Authority of the County
of Maricopa, AZ 100% WR A/A1
The Industrial Development
Authority of the County
of Pima, AZ 10% Ba3 B+
UBS Warburg LLC 100% Aa2/P-1 AA+/A-1+ Fitch AA+/F1+
Washington Mutual (formerly
Alta Residential Mortgage) 100% A3/P-2 A-/A-2 Fitch A/F1
▇▇▇▇▇ Fargo Funding, Inc.
(formerly Norwest mortgage) 100% Aa1/P-1 AA-/A-1+ ▇▇▇▇▇ ▇▇/F1+
▇▇▇▇▇ Fargo Mortgage Resources
(formerly Director's
Acceptance) 100% Aa1/P-1 AA-/A-1+ ▇▇▇▇▇ ▇▇/F1+
Zions First National Bank 100% A2/P-1 A-/A-2 Fitch A-/F1
SCHEDULE III
LITIGATION
None