EXHIBIT 10.14
MASTER REPURCHASE AGREEMENT
Dated as of November 18, 2002
BETWEEN:
NOMURA CREDIT & CAPITAL, INC., as buyer ("Buyer", which term shall include any
"Principal" as defined and provided for in Annex I), or as agent pursuant hereto
("Agent")
and
ARBOR COMMERCIAL MORTGAGE, LLC, as seller ("Seller").
1. APPLICABILITY.
Buyer may, from time to time, agree to enter into transactions in which
Seller transfers to Buyer Purchased Assets against the transfer of funds
by Buyer, with a simultaneous agreement by Buyer to transfer to Seller
such Purchased Assets at a date certain, against the transfer of finds by
Seller. Each such transaction shall be referred to herein as a
"Transaction", and, unless otherwise agreed in writing, shall be governed
by this Agreement.
2. DEFINITIONS AND INTERPRETATION.
a. Defined Terms.
"Additional Purchased Assets" shall have the meaning assigned thereto in
Paragraph 6(a) hereof.
"Adjusted LIBOR" shall mean with respect to any period a rate per annum
determined by Buyer in accordance with the following formula:
LIBOR
1.00 - Eurocurrency Reserve Requirement
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting equity, by contract or otherwise.
"Agent" means Nomura Credit & Capital, Inc. or any successor.
"Agreement" means this Master Repurchase Agreement, as it may be amended,
supplemented or otherwise modified from time to time.
"Bridge Loan" has the meaning given to it in Appendix A of the Custodial
Agreement.
"Business Day" means any day other than (i) a Saturday or Sunday or (ii) a
public or bank holiday in New York City.
"Buyer's Margin Amount" means, with respect to any Transaction as of any
date of determination, the amount obtained by application of the Buyer's Margin
Percentage to the Repurchase Price for such Transaction as of such date.
"Buyer's Margin Percentage" means, with respect to any Transaction as of
any date of determination, a percentage agreed to by Buyer and Seller as set
forth in the related Confirmation, or, in the absence of any such agreement, the
percentage obtained by dividing the Market Value of the Purchased Assets on the
Purchase Date by the Purchase Price on the Purchase Date for such Transaction.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning assigned thereto in Paragraph 8
hereof.
"Collateral Receipt" means a document duly executed by Seller with respect
to each delivery of documents relating to the Purchased Assets to Custodian in
the form attached to the Custodial Agreement.
"Computer Tape" means a computer tape or other electronic medium generated
by Seller and delivered to Buyer and Custodian which provides information
relating to the Purchased Assets, including the information set forth in the
Loan Schedule, in a format acceptable to Buyer.
"Confirmation" shall have the meaning assigned thereto in Paragraph 4(b)
hereof.
"Custodian" means the entity acting as bailee of or agent for Buyer with
respect to any item of a Purchased Asset.
"Custodial Agreement" means the Custody Agreement dated as of November 1,
2002, as amended, supplemented or otherwise modified from time to time, among
Seller, Buyer and Custodian, with respect to any Purchased Asset.
"Custodian's Loan File" shall have the meaning assigned thereto or to
"Loan File" in the Custodial Agreement.
"Default" means any event, that, with the giving of notice or the passage
of time or both, would constitute an Event of Default.
"Default Rate" means, as of any date of determination, the Prime Rate as
quoted in the Wall Street Journal plus 2%.
"Effective Date" means November 18, 2002.
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"Eurocurrency Reserve Requirement" shall mean, for any day as applied to a
Transaction, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements applicable to the Buyer and in effect
on such day (including without limitation basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction with
respect thereto), dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities in Regulation D of
such Board) maintained by a member bank of such Governmental Authority.
"Event of Default" shall have the meaning assigned thereto in Paragraph 18
hereof.
"Final Repurchase Date" shall have the meaning assigned thereto in
Paragraph 3 hereof.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions over Seller.
"Guarantee" means, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person.
"Income" means, with respect to any Purchased Asset at any time, any
principal thereof then payable and all interest, dividends or other
distributions thereon.
"Indebtedness" shall mean, for any Person: (a) all obligations (other than
nonrecourse obligations) for borrowed money; (b) obligations (other than
nonrecourse obligations) of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising and accrued expenses incurred, in the
ordinary course of business so long as such trade accounts payable are payable
within ninety (90) days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness of others secured by a lien
on the Property of such Person, whether or not the respective Indebtedness so
secured has been assumed by such Person; (d) obligations (contingent or
otherwise) of such Person (other than nonrecourse obligations) in respect of
letters of credit or similar instruments issued for account of such Person; (e)
capital lease obligations (other than nonrecourse obligations) of such Person;
(f) obligations (other than nonrecourse obligations) of such Person under
repurchase agreements or like arrangements; (g) Indebtedness of others
Guaranteed on a recourse basis by such Person; (h) all obligations (other than
nonrecourse obligations) of such Person incurred in connection with the
acquisition or carrying of fixed assets by such Person; and (i) Indebtedness of
general partnerships of which such Person is a general partner.
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"Investment Company Act" means the Investment Company Act of 1940, as
amended, including all rules and regulations promulgated thereunder.
"LIBOR" shall mean the applicable 30-day London Inter-Bank Offered Rate
for United States dollars as determined by Buyer from time to time based on page
12 of telerate at 10:00 am. (New York time) two (2) Business Days prior to each
Purchase Date.
"Loan" means either (i) a commercial or multifamily mortgage Bridge Loan,
commercial or multifamily Mezzanine Loan or any Note Acquisition by Seller, each
as described in Appendix A to the Custodial Agreement (as amended with respect
to any such loan or note), (ii) such other type of loan, lease or other
receivable as shall be agreed upon by the parties as evidenced by Appendix A to
the Custodial Agreement, as amended or supplemented by mutual agreement of the
parties, or (iii) each of the Mezzobridge Assets.
"Loan Disposition" means the closing of a final sale or other transfer of
a Loan by the Seller in connection with a securitization or otherwise.
"Loan Note" means, with respect to any Loan, the note together with all
riders thereto and amendments thereof or other evidence of indebtedness.
"Loan Schedule" means a list of Loans by Loan Type attached to the Trust
Receipt and setting forth as to each Loan the information specified by Buyer.
"Loan Type" means the categorization of a Loan on a Computer Tape and
otherwise as a Mezzanine Loan, a Bridge Loan or a Note Acquisition.
"Lockbox Bank" means each entity acting as a lockbox bank maintaining an
account on behalf of the Buyer pursuant to the Lockbox Agreement.
"Lockbox Agreement" means the agreement Demand Deposits Account Agreement
among the Seller, the Buyer and the Lockbox Bank dated August 20, 2001.
"LTV" means the ratio of the outstanding principal balance of a Loan to
the appraised value of the related secured property or collateral, if
applicable, on the date of determination.
"Margin Call" As defined in Section 6(a).
"Margin Deficit" shall have the meaning assigned thereto in Paragraph 6(a)
hereof.
"Market Value" means, as of any date with respect to any Purchased Asset,
the price at which such Purchased Asset could readily be sold as determined by
the Buyer in its good faith sole discretion. For the purposes of the foregoing
the Purchaser may take into account prevailing market conditions and the
financial condition of the Seller.
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"Material Adverse Change" means, with respect to a Person, any material
adverse change in the business, condition (financial or otherwise), operations,
performance, properties or prospects of such Person.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Seller or the Seller and its
Affiliates taken as a whole; (b) a material impairment of the ability of the
Seller or any Affiliate to perform under any Program Document and to avoid any
Event of Default; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Seller or any Affiliate of any
Program Document.
"Mezzanine Loan" has the meaning given to it in Appendix A of the
Custodial Agreement.
"Mezzobridge Assets" means the Loans identified on the Mezzobridge
Schedule.
"Mezzobridge Schedule" means the Schedule attached hereto as Schedule [A],
setting forth the list of Loans which are in the circumstances set forth herein
eligible for inclusion in Transactions hereunder under the terms and conditions
set forth herein and therein.
"Mortgage" means a mortgage, deed of trust, or other instrument which
creates a lien on a fee simple or leasehold interest in real property and
secures a Loan Note.
"Netting Agreement" means the Master Collateral Security and Netting
Agreement dated as of Effective Date among the Buyer and certain Affiliates and
Seller.
"Note Acquisition" has the meaning given to it in Appendix A of the
Custodial Agreement.
"Notice Date" shall have the meaning assigned thereto in Paragraph 4
hereof.
"Obligations" means (a) all of Seller's indebtedness, obligation to pay
the Repurchase Price on the Repurchase Date, and other obligations and
liabilities, to Buyer, its affiliates or Custodian arising under, or in
connection with, the Program Documents, whether now existing or hereafter
arising (b) any and all sums paid by Buyer or on behalf of Buyer in order to
preserve any Purchased Asset or its interest therein; (c) in the event of any
proceeding for the collection or enforcement of any of Seller's indebtedness,
obligations or liabilities referred to in clause (a), the reasonable expenses of
retaking, holding, collecting, preparing for sale, selling or otherwise
disposing of or realizing on any Purchased Asset, or of any exercise by Buyer of
its rights under the Program Documents, including without limitation, attorneys'
fees and disbursements and court costs; and (d) all of Seller indemnity
obligations to Buyer or Custodian or both pursuant to the Program Documents.
"Obligor" means the obligor on a Loan, including any guarantor of the
obligation thereunder.
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"Person" shall mean any legal person, including any individual,
corporation, partnership, association, joint-stock company, trust, limited
liability company, unincorporated organization, governmental entity or other
entity of similar nature.
"Position Report" means the report defined as such in the related
Custodial Agreement.
"Price Differential" means, with respect to each Transaction as of any
date, the aggregate amount obtained by daily application of the Pricing Rate to
the Purchase Price on a 360-day-per-year basis for the actual number of days
during the period commencing on (and including) the Purchase Date and ending on
(but excluding) the date of determination (reduced by any amount of such Price
Differential in respect of such period previously paid by Seller to Buyer).
"Pricing Rate" means the per annum percentage rate for determination of
the Price Differential.
"Prime Rate" means the daily prime loan rate as reported in The Wall
Street Journal.
"Principal" shall have the meaning given to it in Annex I.
"Program Documents" means this Agreement, each Custodial Agreement, any
Servicing Agreement, the Lockbox Agreement, the Netting Agreement, any
Securities Account Control Agreement, the Limited Liability Company Agreement of
and constituting the Seller and any other agreement entered into by Seller and
Buyer in connection therewith.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Purchase Date" means the date on which Purchased Assets are to be
transferred by Seller to Buyer.
"Purchase Price" means the price at which Purchased Assets are transferred
by Seller to Buyer in a Transaction, which shall (unless otherwise agreed) be
equal to the applicable Purchase Price Percentage times the lesser of (i) the
Market Value of the related Purchased Assets and (ii) the outstanding principal
balance of the related Purchased Assets.
"Purchase Price Percentage" means (a) with respect to Bridge Loans, 80%
and (b) with respect to Mezzanine Loans, 65%; provided, however, that with
respect to Mezzobridge Assets, the applicable Purchase Price Percentage shall be
the percentage designated on the Mezzobridge Schedule.
"Purchased Assets" means, with respect to a Transaction, the related
Loans, together with the related Records, Servicing Rights, Take-Out
Commitments, if any, the Seller's rights under any agreement intended to hedge
or reduce the risk of movements in
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interest rates, and other Collateral, and such other property, rights, titles or
interests as are specified on a related Transaction Notice or Position Report.
The term "Purchased Assets" with respect to any Transaction at any time also
shall include Additional Purchased Assets delivered pursuant to Paragraph 6(a)
hereof.
"Records" means all instruments, agreements and other books, records, and
other media for the storage of information maintained by Seller or any other
person or entity with respect to a Purchased Asset. Records shall include the
Loan Notes, any Mortgages and any other instruments necessary to document or
service a Loan.
"Repurchase Date" shall have the meaning assigned thereto in Paragraph
3(b) and shall also include the date determined by application of Paragraph 19.
"Repurchase Price" means the price at which Purchased Assets are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the Purchase Price and the Price Differential as of the date of such
determination.
"Securities Account Control Agreement" means an agreement to be entered
into among Seller, a financial intermediary and Agent in the event that interest
rate risk with respect to a Purchased Asset is hedged with such intermediary.
"Servicing Agreement" means any agreement (other than the Custodial
Agreement) giving rise or relating to Servicing Rights with respect to a
Purchased Asset, including any assignment or other agreement relating to such
agreement.
"Servicing Rights" means contractual, possessory or other rights of Seller
or any other Person arising under a Servicing Agreement, Custodial Agreement or
otherwise, to administer or service a Purchased Asset or to possess related
Records.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Substitute Securities" has the meaning assigned thereto in Paragraph
16(a).
"Take-out Commitment" means, with respect to any Loan, an irrevocable
commitment issued by a purchaser approved by Buyer in favor of the applicable
originator, pursuant to which such approved purchaser agrees to purchase such
than at a specific price.
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"Termination Date" has the meaning assigned thereto in Paragraph 3(b).
"Transaction Notice" has the meaning assigned thereto in the Custodial
Agreement.
"Trust Receipt" means an Initial Trust Receipt or a Trust Receipt as
defined in the related Custodial Agreement.
"Underlying Guidelines" means the standards, procedures and guidelines of
Seller for underwriting or for originating Loans of the applicable Loan Type,
which are to be submitted by Seller to, and approved by, Buyer.
"Uniform Commercial Code" means the Uniform Commercial Code as in effect
on the date hereof in the State of New York or the Uniform Commercial Code as in
effect in the applicable jurisdiction.
b. Interpretation. Headings are for convenience only and do not affect
interpretation. The following rules of this subparagraph (b) apply
unless the context requires otherwise. The singular includes the
plural and conversely. A gender includes all genders. Where a word
or phrase is defined, its other grammatical forms have a
corresponding meaning. A reference to a Paragraph, Annex or Exhibit
is a reference to a paragraph of, or annex or exhibit to, this
Agreement. A reference to a party to this Agreement or another
agreement or document includes the party's successors and permitted
substitutes or assigns. A reference to an agreement or document is
to the agreement or document as amended, novated, supplemented or
replaced, except to the extent prohibited by any Program Document. A
reference to legislation or to a provision of legislation includes a
modification or re-enactment of it, a legislative provision
substituted for it and a regulation or statutory instrument issued
under it. A reference to writing includes a facsimile transmission
and any means of reproducing words in a tangible and permanently
visible form. A reference to conduct includes, without limitation,
an omission, statement or undertaking, whether or not in writing. An
Event of Default subsists until it has been waived in writing by the
Buyer or has been timely cured. The words "hereof', "herein",
"hereunder" and similar words refer to this Agreement as a whole and
not to any particular provision of this Agreement; and subparagraph,
Paragraph, Annex and Exhibit references are to this Agreement unless
otherwise specified. The term "including" is not limiting and means
"including without limitation." In the computation of periods of
time from a specified date to a later specified date, the word
"from" means "from and including"; the words "to" and "until" each
mean "to but excluding", and the word "through" means "to and
including" This Agreement may use several different limitations,
tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless the context
otherwise clearly requires, all
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accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall
be made, in accordance with GAAP, consistently applied. References
herein to "fiscal year" and "fiscal quarter" refer to such fiscal
periods of the Seller. Except where otherwise provided in this
Agreement any determination, statement or certificate by the Buyer
or an authorized officer of the Buyer provided for in this Agreement
is conclusive and binds the parties in the absence of manifest
error. A reference to an agreement includes a security interest,
guarantee, agreement or legally enforceable arrangement whether or
not in writing A reference to a document includes an agreement (as
so defined) in writing or a certificate, notice, instrument or
document, or any information recorded in computer disk form. Where
the Seller is required to provide any document to the Buyer under
the terms of this Agreement, the relevant document shall be provided
in writing or printed form unless the Buyer requests otherwise. At
the request of the Buyer, the document shall be provided in computer
disk form or both printed and computer disk form. This Agreement is
the result of negotiations among and have been reviewed by counsel
to the Buyer and Seller, and are the products of both parties. In
the interpretation of this Agreement, no rule of construction shall
apply to disadvantage one party on the ground that such xxxxx
proposed or was involved in the preparation any particular provision
of this Agreement or this Agreement itself. Except where otherwise
expressly stated the Buyer may give or withhold, or give
conditionally, approvals and consents, may be satisfied or
unsatisfied, and may form opinions and make determinations at its
absolute discretion. Any requirement of good faith or judgment by
the Buyer shall not be construed to require Buyer to request or
await receipt of information or documentation not immediately
available from or with respect to the Seller, a servicer of the
Purchased Assets, any other Person or the Purchased Assets
themselves.
3. THE TRANSACTIONS.
a. Seller shall repurchase Purchased Assets from Buyer on each related
Repurchase Date. Such obligation to repurchase subsists without
regard to any prior or intervening liquidation or foreclosure with
respect to each Purchased Assets (but liquidation or foreclosure
proceeds received by Buyer shall be applied to reduce the Repurchase
Price except as otherwise provided herein). Seller is obligated to
obtain the Purchased Assets from Buyer or its designee (including
the Custodian) at Seller's expense on (or after) the related
Repurchase Date.
b. Provided that the applicable conditions in Paragraphs 9(a) and 9(b)
have been satisfied, each Purchased Asset that is repurchased by
Seller on the 15th day of each month (or the following Business Day
if such day is not a Business Day) following the related initial
Purchased Date (the day of the month so determined for each month, a
"Repurchase Date", which term shall also include the date determined
by application of Paragraph 19)
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shall automatically become subject to a new Transaction unless Buyer
is notified by Seller at least five(5) Business Days prior to any
Repurchase Date, provided that (i) if the Repurchase Date so
determined is later than the date which is 364 days later than the
Effective Date (the "Final Repurchase Date"), the Repurchase Date
for such Transaction shall automatically reset to the Final
Repurchase Date, and the provisions of this sentence as it might
relate to a new Transaction shall expire on such date. For each new
Transaction, unless otherwise agreed, (x) the Buyer's Margin
Percentage shall be equal in the case of a Bridge Loan to 125% and
in the case of a Mezzanine Loan to 155%, (y) the Pricing Rate shall
be equal to Adjusted Libor plus 200 basis points (2 in the case of a
Bridge Loan and 275 basis points (2.75%) in the case of a Mezzanine
Loan, and (z) the accrued and unpaid Price Differential shall be
settled in cash on each related Repurchase Date; provided however,
that with respect to the Mezzobridge Assets, (w) the Buyer's Margin
Percentage, (x) the Pricing Rate, (y) the Purchase Price and (z) the
Final Repurchase Date shall be calculated in accordance with the
Mezzobridge Schedule.
4. ENTERING INTO TRANSACTIONS; TRANSACTION NOTICE, CONFIRMATIONS.
a. Unless otherwise agreed, Seller shall give Buyer and Custodian at
least one (1) Business Day prior notice of any proposed Purchase
Date (the date on which such notice is given, the "Notice Date"). On
the Notice Date, Seller shall (i) request that Buyer enter into a
Transaction by furnishing to Buyer and Custodian (either orally or
in writing) the information specified in the form of Transaction
Notice, or by delivering a Position Report as such, (ii) deliver to
Buyer and Custodian a Loan Schedule and Computer Tape and (iii)
deliver to Custodian (a) the Custodian's Loan File and (b) the
related Collateral Receipt for each Loan subject to such
Transaction.
b. Unless otherwise agreed, upon receipt of the Transaction Notice,
Buyer shall make an offer to Seller specifying the terms for such
Transaction, including the Purchase Price, the Pricing Rate and the
Repurchase Date in respect of such Transaction. Upon Seller agreeing
to enter into a Transaction hereunder, Buyer shall promptly deliver
to Seller a confirmation of such Transaction (a "Confirmation"). The
terms of any Transaction Notice, if any, signed by Seller shall be
deemed incorporated by reference into the Confirmation and if the
terms of the Transaction Notice conflicts with the Confirmation, the
terms of the Confirmation shall prevail.
c. Each Confirmation and Transaction Notice, together with this
Agreement, shall constitute conclusive evidence of the terms agreed
between Buyer and Seller with respect to the Transaction to which
the Confirmation relates, and Seller's acceptance of the related
proceeds shall constitute Seller's agreement to the terms of such
Confirmation. It is the intention of
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the parties that each Confirmation and Transaction Notice shall not
be separate from this Agreement but shall be made a part of this
Agreement. In the event of any conflict between this Agreement and a
Confirmation, the terms of the Confirmation shall control with
respect to the related Transaction.
5. PAYMENT AND TRANSFER.
Unless otherwise agreed, all transfers of funds hereunder shall be in
immediately available funds and all Purchased Assets transferred shall be
transferred to the Custodian pursuant to the Custodial Agreement. Any
Repurchase Price received by Buyer after 2:00 p.m. New York City time
shall be applied on the next succeeding Business Day, but such funds
(absent an Event of Default) shall earn overnight interest at a rate
established by Buyer.
6. MARGIN MAINTENANCE
a. Absent a Default, and at any time the aggregate Market Value of all
Purchased Assets subject to all Transactions is less than the
aggregate Buyer's Margin Amount for all such Transactions (a "Margin
Deficit"), then Buyer may by notice to Seller require Seller in such
Transactions, at Buyer's option, to transfer to Buyer cash or
additional Purchased Assets acceptable to Buyer and (in the case of
Loans) which conform in all respects to the applicable
representations and warranties set forth in Appendix A to the
Custodial Agreement ("Additional Purchased Assets"), so that the
cash and aggregate Market Value of the Purchased Assets, including
any such Additional Purchased Assets, will thereupon equal or exceed
such aggregate Buyer's Margin Amount (such requirement, a "Margin
Call"). In lieu of such a transfer, Seller may repurchase any
Purchased Asset giving rise to a Margin Call if such repurchase
timely satisfies the Margin Call. In the event that a Margin Call is
satisfied, Seller shall, during the 30-day period following the
Margin Call, be permitted to repurchase the Purchased Assets by
payment of the Repurchase Price allocable to such assets (as
determined by Buyer in good faith) net of any dollar amount of the
Margin Call paid by Seller that is allocable to such assets (as so
determined). Absent a Default, Buyer shall not make a Margin Call
prior to a Repurchase Date solely by reason of accrued and unpaid
Price Differential. Simultaneously with a Margin Call, Buyer shall
identify the Purchased Assets giving rise to the Margin Call and
provide Seller with any backup materials reasonably requested by
Seller that explain the Margin Call.
b. Notice required pursuant to Paragraph 6 a) above may be given on a
Business Day by any means. Any notice given on a Business Day shall
be met by the close of business on the following Business Day. The
failure of Buyer, on any one or more occasions, to exercise its
rights hereunder, shall not change or alter the terms and conditions
to which this Agreement
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is subject or limit the right of Buyer to do so at a later date.
Seller and Buyer each agree that a failure or delay by Buyer to
exercise its rights hereunder shall not limit or waive Buyer's
rights under this Agreement or otherwise existing by law or in any
way create additional rights for Seller.
c. Absent a Default, and not more frequently than weekly, Buyer shall
at the written request of Seller or any Member of Seller release to
Seller any amount by which the Market Value of all Purchased Assets
exceeds the aggregate Buyer's Margin Amount.
7. INCOME PAYMENTS.
Where a particular term of a Transaction extends over an Income payment
date on the Purchased Assets subject to that Transaction, such Income
shall be the property of Buyer. Notwithstanding the foregoing, and
provided no Event of Default has occurred, Buyer agrees that Seller shall
be entitled to receive an amount equal to all Income paid on the Purchased
Assets that is not otherwise received by Seller, to the full extent it
would be so entitled if the Purchased Assets had not been sold to Buyer.
Provided no Event of Default has occurred, Buyer shall, as the parties may
agree with respect to any Transaction (or, in the absence of any such
agreement, as Buyer shall reasonably determine in its sole discretion), on
the date such Income is paid either (i) transfer to Seller such Income
with respect to any Purchased Assets sub to such Transaction or (ii) apply
the Income payment to reduce the amount, if any, to be transferred to
Buyer by Seller upon termination of such Transaction. Buyer shall not be
obligated to take any action pursuant to the preceding sentences to the
extent that such action would result in the creation of a Margin Deficit,
unless prior thereto or simultaneously therewith Seller transfers to Buyer
cash or Additional Purchased Assets sufficient to eliminate such Margin
Deficit.
8. SECURITY INTEREST.
Seller and Buyer intend that the Transactions hereunder be sales to Buyer
of the Purchased Assets and not loans from Buyer to Seller secured by the
Purchased Assets. However, in order to present Buyer's rights under this
Agreement in the event that a court or other forum recharacterizes the
Transactions hereunder as other than sales, and as security for Seller's
performance of all of its Obligations, Seller hereby grants Buyer a fully
perfected first priority security interest in the Purchased Assets, the
Records, and all related Servicing Rights, Property, insurance, Income,
accounts (including any interest of Seller in escrow accounts) and any
other contract rights, payments, rights to payment (including payments of
interest or finance charges) general intangibles and other assets relating
to the Purchased Assets (including, without limitation, furniture,
fixtures and accounts) or any interest in the Purchased Assets, the
servicing of the Purchased Assets, and any proceeds and distributions with
respect to any of the foregoing and any other property, rights, titles a-
interests as are specified on a Transaction Notice or Position Report
(collectively, the "Collateral").
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9. CONDITIONS PRECEDENT.
a. As conditions precedent to the initial Transaction, Buyer shall have
received on or before the day of such initial Transaction the
following, in form and substance satisfactory to Buyer and duly
executed by Seller:
i. The Program Documents duly executed and delivered by the
parties thereto.
ii. Evidence that all other actions necessary or, in the opinion
of Buyer, desirable to perfect and protect Buyer's interest in
the Purchased Assets and other Collateral have been taken,
including, without limitation, duly executed and filed Uniform
Commercial Code financing statements on Form UCC-l;
iii. A certified copy of Seller's corporate resolutions approving
the Program Documents and Transactions thereunder (either
specifically or by general resolution), and all documents
evidencing other necessary corporate action or governmental
approvals as may be required in connection with the Program
Documents;
iv. An incumbency certificate of Seller's corporate secretary
certifying the names, true signatures and titles of Seller's
representatives duly authorized to request Transactions
hereunder and to execute the Program Documents and the other
documents to be delivered thereunder;
v. An opinion of Seller's counsel as to such matters as Buyer may
reasonably request and in form and substance acceptable to
Buyer;
vi. A copy of the Underwriting Guidelines certified by an officer
of a Seller; and
vii. Any other documents reasonably requested by Buyer.
b. The obligation of Buyer to enter into each Transaction pursuant to
this Agreement is subject to the following conditions precedent:
i. Buyer or its designee shall have received on or before the day
of such Transaction (unless otherwise specified in this
Agreement) the following, in form and substance satisfactory
to Buyer and (if applicable) duly executed:
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A. A Transaction Notice delivered pursuant to Paragraph
4(a);
B. The related Trust Receipt; and
C. Such certificates, opinions of counsel or other
documents as Buyer may reasonably request.
ii. No Default shall have occurred and be continuing.
iii. No catastrophic event or events shall have been determined by
Buyer to have occurred resulting in the effective absence of a
"repo market" for a period of at least two (2) consecutive
days respecting loans or mortgage- or asset-backed securities
such that Buyer is or was unable to finance or fund purchases
under this Agreement through the "repo market" or Buyer's
customers.
iv. Buyer shall not have determined that the introduction of or a
change in any requirement of law or in the interpretation or
administration of any requirement of law applicable to Buyer
has made it unlawful, and no Governmental Authority shall have
asserted that it is unlawful, for Buyer to enter into
Transactions with a Pricing Rate based on Adjusted LIBOR.
v. All representations and warranties in the Program Documents
hereof shall be true and correct on the date of such
Transaction.
vi. (A) The then aggregate outstanding Purchase Price for all
Purchased Assets (including adjustable-rate Loans), when added
to the Purchase Price for the requested Transaction, shall not
exceed ONE HUNDRED MILLION DOLLARS ($100,000,000), and (B) if
the Purchased Assets for the requested Transaction are
Mezzanine Loans, the then aggregate outstanding Purchase Price
for all Purchased Assets that are Mezzanine Loans (such
calculation to be inclusive of Mezzanine Loans which are
Mezzobridge Assets), when added to the Purchase Price for the
requested Transaction, shall not exceed TWENTY-FIVE MILLION
DOLLARS ($25,000,000) and (C) if the Purchased Assets for the
requested Transaction are Mezzobridge Assets, the then
aggregate outstanding Purchase Price for all Purchased Assets
that are Mezzobridge Assets, when added to the Purchase Price
for the requested Transaction, shall not exceed the amount
determined in accordance with the Purchase Price formula set
forth on the Mezzobridge Schedule (as reduced from time to
time by any recoveries of principal thereon or disposition
proceeds therefrom).
vii. In the event that Buyer requests at any time and from time to
time with respect to any Purchased Asset which is a Loan that
is in
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default or otherwise requires a degree of active servicing as determined
by Buyer, the Seller shall promptly organize a special purpose subsidiary
for the purpose of holding such Purchased Asset and shall pledge 100% of
the equity or ownership interests of such subsidiary to Buyer under
agreements and circumstances acceptable to Buyer.
10. RELEASE OF COLLATERAL.
Upon timely payment in full of the Repurchase Price and all other
Obligations owing with respect to a Purchased Asset, if no Default or
Event of Default has occurred and is continuing, Buyer shall, and shall
direct Custodian to, release such Purchased Asset unless such release
would give rise to or perpetuate a Margin Deficit. Except as set forth in
Paragraphs 6(a) and 16, Seller shall give at least five (5) Business Days'
prior written notice to Buyer if such repurchase shall occur on other than
a Repurchase Date.
If such a Margin Deficit is applicable, Buyer shall notify Seller of the
amount thereof and Seller may thereupon satisfy the Margin Call in the
manner specified in Section 6.
11. RELIANCE.
With respect to any Transaction, Buyer may conclusively rely upon, and
shall incur no liability to Seller in acting upon, any request or other
communication that Buyer reasonably believes to have been given or made by
a person authorized to enter into a Transaction on Seller behalf, whether
or not such person is listed on the certificate delivered pursuant to
subparagraph 9(a)(iv) hereof. In each such case, Seller hereby waives the
right to dispute Buyer's record of the terms of the Confirmation, request
or other communication.
12. REPRESENTATIONS AND WARRANTIES.
Seller hereby represents and warrants, and shall on and as of the Purchase
Date for any Transaction and on and as of each date thereafter through and
including the related Repurchase Date be deemed to represent and warrant,
that
a. Due Organization and Qualification. Seller is duly organized,
validly existing and in good standing under the laws of the
jurisdiction under whose laws it is organized. Seller is duly
qualified to do business, is in good standing and has obtained all
necessary licenses, permits, charters, registrations and approvals
necessary for the conduct of its business as currently conducted and
the performance of its obligations under the Program Documents.
b. Power and Authority. Seller has all necessary power and authority to
conduct its business as currently conducted, to execute, deliver and
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perform its obligations under the Program Documents and to
consummate the Transactions.
c. Due Authorization. The execution, delivery and performance of the
Program Documents by Seller has been duly authorized by all
necessary limited liability company action and do not require any
additional approvals or consents or other action by or any notice to
or filing with any Person.
d. Noncontravention. None of the execution and delivery of the Program
Documents by Seller or the consummation of the Transactions and
transactions thereunder:
i. conflicts with, breaches or violates any provision of the
certificate of formation or operating agreement of Seller or
any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award currently in effect having
applicability to Seller or its properties;
ii. constitutes a material default by Seller under any loan or
repurchase agreement, mortgage, indenture or other agreement
or instrument to which Seller is a party or by which it or any
of its properties is or may be bound or affected; or
iii. results in or requires the creation of any lien upon or in
respect of any of the assets of Seller except the lien
relating to the Program Documents.
e. Legal Proceedings. There is no action, proceeding or investigation
by or before any court, governmental or administrative agency or
arbitrator affecting any of the Purchased Assets, Seller or any of
their Affiliates, pending or threatened, which, if decided
adversely, would have a material adverse change with respect to
Seller or any Purchased Asset.
f. Valid and Binding Obligations. Each of the Program Documents to
which Seller is a party when executed and delivered by Seller will
constitute the legal, valid and binding obligations of Seller,
enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors' rights generally and general equitable principles.
g. Financial Statements. The financial statements of Seller, copies of
which have been furnished to Buyer, (i) are, as of the dates and for
the periods referred to therein, complete and correct in all
material respects, (ii) present fairly the financial condition and
results of operations of Seller as of the dates and for the periods
indicated and (iii) have been prepared in accordance with GAAP
consistently applied, except as noted therein
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(subject as to interim statements to normal year-end adjustments).
Since the date of the most recent financial statements, there has
been no material adverse change in such financial condition or
results of operations. Except as disclosed in such financial
statements, Seller is not subject to any contingent liabilities or
commitments that, individually or in the aggregate, have a material
possibility of causing a material adverse change in the business or
operations of Seller.
h. Accuracy Information. None of the documents or information prepared
by or on behalf of Seller and provided by Seller to Buyer relating
to Seller or its financial condition contain any statement of a
material fact with respect to Seller or the Transactions that was
untrue or misleading in any material respect when made. Since the
furnishing of such documents or information, there has been no
change, nor any development or event involving a prospective change
known too, that would render any of such documents or information
untrue or misleading in any material respect.
i. No Consents. No consent, license, approval or authorization from, or
registration, filing or declaration with, any regulatory body,
administrative agency, or other governmental instrumentality, nor
any consent, approval, waiver or notification of any creditor,
lessor or other nongovernmental person, is required in connection
with the execution, delivery and performance by Seller of this
Agreement or the consummation by Seller of any other Program
Document.
j. Compliance With Law, Etc. No practice, procedure or policy employed
or proposed to be employed by Seller in the conduct of its
businesses violates any law, regulation, judgment, agreement, order
or decree applicable to it which, if enforced, would result in
either a Material Adverse Change with respect to Seller or a
Material Adverse Effect.
k. Solvency: Fraudulent Conveyance. Seller is solvent and will not be
rendered insolvent by the Transaction and, after giving effect to
such Transaction, Seller will not be left with an unreasonably small
amount of capital with which to engage in its business. Seller does
not intend to incur, or believe that it has incurred, debts beyond
its ability to pay such debts as they mature. Seller is not
contemplating the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in
respect of Seller or any of its assets. The amount of consideration
being received by the Seller upon the sale of the Purchased Assets
to Buyer constitutes reasonably equivalent value and fair
consideration for such Purchased Assets. Seller is not transferring
any Purchased Assets with any intent to hinder, delay or defraud any
of its creditors.
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l. Investment Company Act Compliance. Seller is not required to be
registered as an "investment company" as defined under the
Investment Company Act nor as an entity under the control of an
"investment company" as defined under the Investment Company Act.
m. Taxes. Seller has filed all federal and state tax returns which are
required to be filed and paid all taxes, including any assessments
received by it, to the extent that such taxes have become due. Any
taxes, fees and other governmental charges payable by Seller in
connection with a Transaction and the execution and delivery of the
Program Documents have been paid (other than for taxes that are
being contested in good faith or for which it has established
adequate reserves).
n. Additional Representations. With respect to each Loan, Seller hereby
makes all of the applicable representations and warranties set forth
(i) on App of the Custodial Agreement for the related loan Type, if
applicable to any Purchased Asset, and (ii) in each Confirmation to
which such Purchased Asset is or has been subject, in each case as
of the date the documents related to such than are delivered to the
Custodian, and continuously while such Loan is part of the
Collateral and subject to a Transaction.
o. Hedging. Seller has entered into the interest rate hedging
arrangements described in the related Transaction Notices, if
applicable (as amended with the approval of Buyer), which are fully
subject to a Securities Account Control Agreement. All hedging for
the Loans shall be subject to a Securities Account Control
Agreement.
p. No Broker. The Seller has not dealt with any broker, investment
banker, agent, or other person, except for the Buyer, who may be
entitled to any commission or compensation in connection with the
sale of Purchased Assets pursuant to this Agreement; provided, that
if Seller has dealt with any broker, investment banker, agent, or
other person, except for the Buyer, who may be entitled to any
commission or compensation in connection with the sale of Purchased
Assets pursuant to this Agreement, such commission or compensation
shall have been paid in full by Seller.
q. Corporate Separateness. Seller and Custodian each maintain wholly
separate businesses and principal offices and have no interlocking
offices or directors.
r. Construction Loans. If a Loan has not been fully disbursed as of the
Purchase Date therefor, the Obligor thereunder has entered into a
funding participant side letter approved by Buyer recognizing
Buyer's right to make advances upon Seller's failure to do so.
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The representations and warranties set forth in this Agreement shall
survive transfer of the Purchased Assets to Buyer and shall continue for
so long as the Purchased Assets are subject to this Agreement.
13. COVENANTS OF SELLER.
Seller hereby covenants with Buyer as follows:
a. Defense of Title. Seller warrants and will defend, and shall cause
any servicer to defend, the right, title and interest of Buyer in
and to all Collateral against all adverse claims and demands.
b. No Amendment or Compromise. Without Buyer's prior written consent,
neither Seller, nor those acting on Seller's behalf, shall amend or
modify, or waive any term or condition of, or settle or compromise
any claim in respect of, any item of the Purchased Assets or any
related rights.
c. No Assignment. Except as permitted herein, neither Seller nor any
servicer shall sell, assign, transferor otherwise dispose of, or
grant any option with respect to, or pledge, hypothecate or grant a
security interest in or lien on or otherwise encumber (except
pursuant to the Program Documents), any of the Purchased Assets or
any interest therein, nor shall Seller permit or suffer to exist any
such sale or encumbrance by Seller, provided that this paragraph
shall not prevent any transfer of Purchased Assets in accordance
with the Program Documents
d. Servicing of Loans. Seller shall service, or cause to be serviced,
all Loans that are part of the Purchased Assets in accordance with
the standard industry practices, pending delivery of such servicing
to Buyer, employing at least the same procedures and exercising the
same care that Seller customarily employs in servicing Loans for its
own account- Seller shall notify servicers of Buyer's interest
hereunder and Seller shall notify Buyer of the name and address of
all servicers of Loans. Buyer shall have the right to approve each
servicer and the form of all Servicing Agreements. Seller shall hold
or cause to be held all escrow finds collected with respect to such
Loans in trust accounts and shall apply the same for the purposes
for which such finds were collected. The Seller shall cause the
borrower under each Loan Note to remit all Loan Payments to the
Lockbox Bank and not otherwise. Upon Buyer's request, Seller shall
provide to Buyer a letter addressed to and agreed to by each
servicer of Loans, in form and substance reasonably satisfactory to
Buyer, advising such servicer of such matters as Buyer may
reasonably request. If Seller should discover that, for any reason
whatsoever, Seller or any entity responsible to Seller by contract
for managing or servicing any such Loan has failed to perform fully
Seller's obligations under the Program Documents or any of the
obligations of such entities with respect to the Purchased Assets,
Seller shall promptly notify Buyer.
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e. Preservation of Collateral; Collateral Value. Seller shall do all
things necessary to preserve the Collateral so that it remains
subject to a first priority perfected security interest hereunder.
Without limiting the foregoing, Seller will comply with all rules,
regulations and other laws of any Governmental Authority and cause
the Collateral to comply with all applicable rules, regulations and
other laws. Seller will not allow any default for which Seller is
responsible to occur under any Collateral, and Seller shall fully
perform or cause to be performed when due all of its obligations
under any Collateral or the Program Documents.
f. Maintenance of Papers, Records and Files. Seller shall acquire, and
Seller or servicer of the Purchased Assets shall build, maintain and
have available, a complete tile in accordance with lending industry
custom and practice for each Purchased Asset. Seller or the servicer
of the Purchased Assets will maintain alt such Records not in the
possession of Custodian in good and complete condition in accordance
with industry practices and preserve them against loss.
i. Seller shall collect and maintain or cause to be collected and
maintained all Records relating to the Purchased Assets in
accordance with industry custom and practice, including those
maintained pursuant to the preceding subparagraph, and all
such Records shall be in Custodian's possession unless Buyer
otherwise approves. Seller will not allow any such papers,
records or files that are an original or an only copy to leave
Custodian's possession, except for individual items removed in
connection with servicing a specific Loan, in which event
Seller will obtain or cause to be obtained a receipt thin a
financially responsible person for any such paper, record or
file.
ii. For so long as Buyer has an interest in or lien on any
Purchased Asset, Seller will hold or cause to be held all
related Records in trust for Buyer, Seller shall notify, or
cause to be notified, every other party holding any such
Records of the interests and liens granted hereby.
iii. Upon reasonable advance notice from Custodian or Buyer, Seller
shall (x) make any and all such Records available to Custodian
or Buyer to examine any such Records, either by its own
officers or employees, or by agents or contractors, or both,
and make copies of all or any portion thereof, (y) permit
Buyer or its authorized agents to discuss the affairs,
finances and accounts of Seller with its respective chief
operating officer and chief financial officer and to discuss
the affairs, finances and accounts of Seller with its
independent certified public accountants.
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g. Financial Statements: Accountants' Reports: Other Information.
Seller shall keep or cause to be kept in reasonable detail books and
records of account of its assets and business and shall clearly
reflect therein the transfer of Purchased Assets to the Buyer.
Seller shall furnish or cause to be furnished to Buyer promptly upon
Buyer's request the following:
i. Financial Statements. (x) As soon as available and in any
event within 90 days after the end of each fiscal year, the
consolidated, audited balance sheets of Seller as of the end
of each fiscal year of Seller and the audited financial
statements of income and changes in equity of Seller for such
fiscal year and (y) as soon as available and in any event
within 45 days after the end of each quarter, the
consolidated, unaudited balance sheets of Seller as of the end
of each quarter and the unaudited financial statements of
income and changes in equity of Seller for the portion of the
fiscal year then ended, all of which were prepared in
accordance with GAAP.
ii. Loan Performance Data. Monthly reports in form and scope
satisfactory to Buyer, setting forth data regarding the
performance of the Purchased Assets, and such other
information as Buyer may reasonably request.
iii. Monthly Servicing Diskettes. A computer tape and a diskette
(or any other electronic transmission acceptable to Buyer) in
a format acceptable to Buyer containing such information with
respect to the Purchased Assets as Buyer may reasonably
request.
h. Notice of Material Events. Seller shall promptly inform Buyer in
writing of any of the following:
i. any Default, Event of Default or default or breach by Seller
of any obligation under any Program Document, or the
occurrence or existence of any event or circumstance that
Seller reasonably expects will with the passage of time become
a Default, Event of Default or such a default or breach by
Seller;
ii. any change in the insurance coverage required of the Seller or
any other Person pursuant to any Program Document, with copy
of evidence of same attached;
iii. any financial or operational report or statement of Seller
(regular, periodic or special) delivered to or filed with any
Governmental Authority or other third party, with copy of same
attached;
iv. any material dispute, litigation, investigation, proceeding or
suspension between the Seller and any Governmental Authority
or any other Person;
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v. any material change in accounting policies or financial
reporting practices of the Seller,
vi. the occurrence of any material employment dispute and a
description of the strategy for resolving it; and
vii. any event, circumstance or condition that has resulted, or has
a possibility of resulting in either a Material Adverse Change
with respect to Seller or a Material Adverse Effect.
i. Maintenance of Licenses. Seller shall maintain all licenses, permits
or other approvals necessary for Seller to conduct its business and
to perform its obligations under the Program Documents.
j. No Withholdings for Taxes. Any payments made by Seller to Buyer
shall be free and clear of, and without deduction or withholding
for, any taxes; provided, however, that if Seller shall be required
by law to deduct or withhold any taxes from any sums payable to
Buyer, then Seller shall (A) make such deductions or withholdings
and pay such amounts to the relevant authority in accordance with
applicable law, (B) pay to Buyer the sum that would have been
payable had such deduction or withholding not been made, and (C) at
the time Price Differential is paid, pay to Buyer all additional
amounts as specified by Buyer to preserve the after-tax yield the
Buyer would have received if such tax had not been imposed.
k. Change in Nature of Business. Seller shall not make any material
change in the nature of its business as carried on at the date
hereof.
l. Voluntary Bankruptcy. Seller shall not commence or join voluntarily
in any proceeding to adjudicate it a bankrupt or insolvent, or seek
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any laws
relating to bankruptcy, insolvency, or relief or the appointment of
a receiver, trustee or similar official for it or any substantial
part of its property.
14. P&I REMITTANCE DATE PAYMENTS/COLLECTIONS.
On each Repurchase Date, Seller shall remit or shall cause to be remitted
to Buyer:
a. All principal under the Purchased Assets received in the calendar
month preceding the month in which such Repurchase Date occurs;
b. All principal prepayments received on the Purchased Assets in the
calendar month in which such Repurchase Date occurs (provided that
the date of receipt is prior to the Repurchase Date); and
c. That portion of the Price Differential that has accrued as d such
date.
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15. REPURCHASE OF PURCHASED ASSETS.
a. Upon discovery by Seller of a breach of any of the representations
and warranties set forth in Appendix A to the Custodial Agreement,
Seller shall give prompt written notice thereof to Buyer. Upon any
such discovery by Buyer, Buyer will notify Seller. If Seller does
not cure such breach on or before the 30th day following receipt of
notice of such breach, then Seller shall repurchase the affected
Purchased Asset (with the consent of Buyer) on the next succeeding
Business Day.
b. If Buyer determines that the introduction of; any change in, or the
interpretation or administration of any requirement of law has made
it unlawful to engage in any Transactions with a Pricing Rate based
on Adjusted LIBOR, then Seller (i) shall, upon its receipt of notice
of such fact and demand from Buyer (with a copy of such notice to
Custodian), repurchase the Purchased Assets subject to the
Transaction on the next succeeding Business Day and concurrently
enter into a new Transaction with Buyer with a Pricing Rate based on
the Prime Rate plus a margin and (ii) may elect, by giving notice to
Buyer and Custodian, that all new Transactions shall have Pricing
Rates based on the Prime Rate plus a margin. The foregoing margins
shall be solely determined and calculated by Buyer in good faith.
16. SUBSTITUTION.
a. Seller may, subject to agreement with and acceptance by Buyer,
substitute other assets which are substantially be same as the
Purchased Assets (the "Substitute Assets") for any Purchased Assets.
Such substitution shall be made by transfer to Buyer of such
Substitute Assets and transfer to Seller of such Purchased Assets.
After substitution, the Substitute Assets shall be deemed to be
Purchased Assets.
b. 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 Seller does not have any existing right to
substitute Substitute Assets for the Purchased Assets, 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 10 an. (New
York City time) on the second preceding Business Day, to substitute
Substitute Assets for any Purchased Assets; provided, however, that
Buyer may elect, by the close of business on the Business Day
following which such notice is received, or by the close of the next
Business Day if notice is given after 10 a.m. (New York City time)
on such thy, not to accept such substitution. In the event such
substitution is accepted by Buyer, such substitution shall be made
by Seller's transfer to Buyer of such Substitute Assets and Buyer's
transfer to Seller of such Purchased Assets, and after such
substitution, the Substitute Assets shall be deemed to be Purchased
Assets. In the event Buyer elects
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not to accept such substitution, Buyer shall offer Seller the right
to terminate the Transaction.
c. In the event Seller exercises its right to substitute or terminate
under subparagraph (b), Seller shall be obligated to pay to Buyer,
by the close of the Business Day of such substitution, as the case
may be, an amount equal to (A) Buyer's actual cost in bona tide
third party transactions (including all fees, expenses and
commissions) of (i) entering into replacement transactions; (ii)
entering into or terminating hedge transactions; and/or (iii)
terminating transactions or substituting securities in like
transactions with third parties in connection with or as a result of
such substitution or termination, and (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. The foregoing amounts shall be solely
determined and calculated by Buyer in good faith, and such
determination shall be binding upon the parties, absent manifest
error.
17. REPURCHASE TRANSACTIONS.
Buyer may, in its sole election, engage in repurchase transactions with
the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or
otherwise convey the Purchased Assets with a counterparty of Buyer's
choice, in all cases subject to the Buyer's obligation to reconvey the
Purchased Assets on the Repurchase Date. In the event Buyer engages in a
repurchase transaction with any of the Purchased Assets or otherwise
pledges or hypothecates any of the Purchased Assets, Buyer shall have the
right to assign to Buyer's counterparty any of the applicable
representations or warranties in App of the Custodial Agreement and the
remedies for breach thereof, as they relate to the Purchased Assets that
are subject to such repurchase transaction.
18. EVENTS OF DEFAULT.
With respect to any Transactions covered by or related to this Agreement,
the occurrence of any of the following events shall constitute an "E of
Default":
a. Seller fails to transfer the Purchased Assets to Buyer by the
Business Day following the applicable Purchase Date;
b. Seller fails to repurchase the Purchased Assets by the Business Day
following the applicable Repurchase Date;
c. Seller shall fail to perform, observe or comply with any other term,
covenant or agreement contained in the Program Documents that is
reasonably determined by Buyer to be material, and such failure is
not cured within five Business Days of notice thereof to Seller
(subject to extension for an additional five Business Days if such
failure is reasonably
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susceptible to cure during such period and Seller has evidenced good
faith progress thereto);
d. Any representation or warranty made by Seller (or any of Seller's
officers) in the Program Documents or in any other document (other
than the representations or warranties in Appendix A to the
Custodial Agreement) shall have been incorrect or untrue in any
material respect when made or repeated or deemed to have been made
or repeated, subject to a fifteen Business Day cure period following
discovery by or notice to Seller, but only if and to the extent that
such breach is reasonably susceptible to cure and the Seller is
evidencing good faith progress to cure it within such period;
e. Seller or any of Seller's Subsidiaries shall fail to pay any of
Seller's or Seller's Subsidiaries' Indebtedness, or any interest or
premium thereon when due (whether by scheduled maturity, requirement
prepayment, acceleration, demand or otherwise), or shall fail to
make any payment when due under Seller's or Seller's Subsidiaries'
Guarantee of another person's Indebtedness for borrowed money, and
such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such
Indebtedness or Guarantee and such failure shall cause the
acceleration, of the maturity of such Indebtedness or Guarantee; or
any other default under any agreement or instrument relating to any
such Indebtedness or Guarantee, or any other event, shall occur and
shall continue after the applicable grace period, if any, specified
in such agreement, instrument or Guarantee and such failure shall
cause the acceleration of the maturity of such Indebtedness or
Guarantee, if the effect of such default or event is to accelerate,
or to permit the acceleration of, the maturity of such Indebtedness
or Guarantee; or if any such Indebtedness or Guarantee shall be
declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled required prepayment), prior to the
stated maturity thereof notwithstanding any other provision herein
to the contrary for the purposes of this Section 18 e), the terms
"Indebtedness" and "Guarantee" shall not include obligations which
in the aggregate are less than $500,000.
f. A custodian, receiver, conservator, liquidator, trustee,
sequestrator or similar official for Seller or any of Seller's
Subsidiaries, or of any of Seller's Property, is appointed or takes
possession of such property or Seller or any of Seller's
Subsidiaries generally fails to pay Seller's, or Seller's
Subsidiaries' debts as they become due; or Seller or any of Seller's
Subsidiaries is adjudicated bankrupt or insolvent; or an order for
relief is entered under the Federal Bankruptcy Code, or any
successor or similar applicable statute, or any administrative
insolvency scheme, against Seller or any of Seller's Subsidiaries;
or any of Seller's or Seller's Subsidiaries' Property is sequestered
by court or administrative order; or a petition is filed against
Seller or any of Seller's Subsidiaries under any
- 25 -
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution, moratorium, delinquency or liquidation law of any
jurisdiction, whether now or subsequently in effect; provided that,
if any event described in this subparagraph (f) is not voluntarily
caused or consented to by Seller or an applicable Subsidiary, a
30-day cure period shall be applicable to stay or discharge such
event;
g. Seller or any of Seller's Subsidiaries files a voluntary petition in
bankruptcy seeks relief under any provision of any bankruptcy,
reorganization, moratorium, delinquency, arrangement, insolvency,
readjustment of debt, dissolution or Liquidation law of any
jurisdiction whether now or subsequently in effect; or consents to
the filing of any petition against it under any such law; or
consents to the appointment of or taking possession by a custodian,
receiver, conservator, trustee, liquidator, sequestrator or similar
official for Seller or any of Seller's Subsidiaries, or of all or
any part of Seller's or Seller's Subsidiaries' Property; or makes an
assignment for the benefit of Seller or Seller's Subsidiaries'
creditors;
h. Either (i) any fatal, nonappealable judgment or order for the
payment of money in excess of $1,000,000 is rendered against Seller
or any of Seller's Subsidiaries or (ii) any such fatal,
nonappealable judgment or order of less than $1,000,000 remains
undischarged or unsatisfied after the passage of 60 days following
the date on which it is entered;
i. Any Governmental Authority or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any
action to condemn, seize or appropriate, or to assume custody or
control of; all or any substantial part of the Property of Seller,
or of any of Seller's Subsidiaries, or shall have taken any action
to displace the management of Seller or of any of Seller's
Subsidiaries or to curtail its authority in the conduct of the
business of Seller or of any of Seller's Subsidiaries, or takes any
action to remove, limit or restrict the approval of Seller or any of
Seller's Subsidiaries as an issuer, buyer or a seller/servicer of
Loans or securities backed thereby, and such action provided for in
this subparagraph (1) shall not have been discontinued or stayed
with in 30 days;
j. Seller or any of Seller's Subsidiaries shall default under, or fail
to perform as requested under, or shall otherwise breach the
material terms of any instrument, agreement or contract reasonably
determined by Buyer to be material between Seller and Buyer or any
of Buyer's Affiliates, and any applicable grace or cure period in
such instrument, agreement or contract shall haw expired;
k. In the good faith judgment of Buyer any Material Adverse Change
shall have occurred with respect to Seller or any of Seller's
Subsidiaries, taken together as a whole;
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l. Seller shall admit its inability to, or Seller's intention not to,
perform any of Seller's Obligations hereunder;
m. Seller dissolves, merges or consolidates with another entity unless
Seller is the surviving party, or sells, transfers, or otherwise
disposes of a material portion of Seller's business or assets;
n. This Agreement shall for any reason cease to create a valid, first
priority security interest in any of the Purchased Assets purported
to be covered hereby;
o. Seller's audited annual financial statements or the notes thereto or
other opinions or conclusions stated therein shall be qualified or
limited by reference to the status of Seller as a "going concern" or
a reference of similar import;
p. Any material amendment is made to the Underwriting Guidelines which
was not previously approved in writing by Buyer;
q. Either (i) a change in Control (as such term is defined in Rule 1
2b-2 of the Securities Exchange Act of 1934, as amended) of Setter
shall have occurred (other than a change in Control resulting from a
public offering of Seller's stock following which Xxxx Xxxxxxx
remains in Control) or (ii) Xxxx Xxxxxxx shall cease to be the chief
executive officer of the Seller and to function in substantially the
same capacity as be functions as of the date hereof, or
r. Either ( the ratio of Seller's total liabilities to net worth
exceeds 8:1 (or, 10:1 if so required in any other financing
arrangement of Seller), or (ii) the net north of Seller is less than
$45 million (increased by 75% of any additional equity or
convertible debt issued beyond the amounts set forth in the most
recent financial statements of Seller).
It is understood and agreed that any default, cure or notice period
provided for in the Program Documents may be accelerated by Buyer
unilaterally upon Buyer's or Agent's good faith determination that it is
reasonable to do so under the circumstances, with due consideration to the
volatility of markets, the seriousness of any Defaults and the perceived
risk to Buyer of delay.
19. REMEDIES.
Upon the occurrence of an Event of Default, Buyer, at its option (which
option shall be deemed to have been exercised immediately upon the
occurrence of an Event of Default pursuant to Paragraph 18(h) or (i)
hereof), shall have any or all of the following rights and remedies, which
may be exercised by Buyer:
a. The Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur.
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b. Seller's obligations hereunder to repurchase all Purchased Assets at
the Repurchase Price therefor on the Repurchase Date in such
Transactions shall thereupon become immediately due and payable; all
Income paid after such exercise or deemed exercise shall be retained
by Buyer and applied to the aggregate Repurchase Prices and any
other amounts owing by Seller hereunder; Seller shall immediately
deliver to Buyer or its designee any and all original papers,
records and files relating to the Purchased Assets subject to such
Transaction then in Seller's possession and/or control; and all
right, title and interest in and entitlement to such Purchased
Assets and Servicing Rights thereon shall be deemed transferred to
Buyer.
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 Buyer may reasonably
deem satisfactory any or all Purchased Assets or (B) in its sole
discretion elect, in lieu of selling all or a portion of such Purchased
Assets, to give Seller credit for such Purchased Assets in an amount equal
to the Market Value of the Purchased Assets against the aggregate unpaid
Repurchase Price and any other amounts owing by Seller hereunder. The
proceeds of any disposition of Purchased Assets shall be applied first to
the reasonable costs and expenses incurred by Buyer in connection with or
as a result of an Event of Default; second to consequential damages,
including, but not limited to, costs of cover and/or related hedging
transactions; third to the aggregate Repurchase Prices; and fourth to all
other Obligations.
The parties recognize that it may not be possible to purchase or sell all
of the Purchased 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 Assets may not be liquid. In view of the nature of the Purchased
Assets, the parties agree that liquidation of a Transaction or the
underlying Purchased 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 the
time and manner of liquidating any Purchased Asset and nothing contained
herein shall obligate Buyer to liquidate any Purchased Asset on the
occurrence of an Event of Default or to liquidate all Purchased Assets in
the same manner or on the same Business Day or constitute a waiver of any
right or remedy of Buyer.
In addition to its rights hereunder, Buyer shall have the right to proceed
against any of Seller's assets 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 Seller to
Buyer pursuant to this Agreement. Buyer may set off cash, the proceeds of
the liquidation of the Purchased Assets and Additional Purchased Assets,
any other Collateral or its proceeds and all other sums or obligations
owed by Buyer to Seller hereunder against all of Seller's Obligations to
Buyer, whether under this Agreement, under a Transaction, or under any
other agreement between the parties, or otherwise,
- 28 -
whether or not such Obligations are then due, without prejudice to Buyer's
right to recover any deficiency.
Buyer may direct all Persons servicing the Purchased Assets to take such
action with respect to the Purchased Assets as Buyer determines
appropriate.
Seller shall be liable to Buyer for the amount of all expenses (plus
interest thereon at ante equal to the Default Rate), and consequential
damages, including without limitation, all costs and expenses incurred in
connection with hedging or covering transactions.
Seller shall cause all sums received by it with respect to the Purchased
Assets to be deposited with Custodian (or such other Person as Buyer may
direct) after receipt thereof.
Buyer shall without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court
having jurisdiction, without notice, to take possession of and protect,
collect, manage, liquidate, and sell the Purchased Assets and any other
Collateral or any portion thereof, collect the payments due with respect
to the Purchased Assets and any other Collateral or any portion thereof,
and do anything that Buyer is authorized hereunder to do. Seller shall pay
all costs and expenses incurred by Buyer in connection with the
appointment and activities of such receiver.
Buyer may enforce its rights and remedies hereunder without prior judicial
process or bearing, and Seller hereby expressly waive, to the extent
permitted by law, any right Seller might otherwise have to require Buyer
to enforce its rights by judicial process. Seller also waives, to the
extent permitted by law, any defense Seller might otherwise have to the
Obligations, arising from use of nonjudicial process, enforcement and sale
of all or any portion of the or Purchased Assets and any other Collateral
or from any other election of remedies, Seller recognizes that nonjudicial
remedies are consistent with the usages of the trade, are responsive to
commercial necessity and are the result of a bargain at arm's length.
Buyer shall have all the rights and remedies provided herein, provided by
applicable federal, state, foreign, and local laws in equity, and under
any other agreement between Seller and Buyer.
Upon the occurrence of an Event of Default, Buyer shall have the right to
exercise any of its rights and/or remedies without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly
waived by Seller.
20. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE.
No failure on the part of Buyer to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise by Buyer of any right, power or
remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or
- 29 -
remedy. All rights and remedies of Buyer provided for herein are
cumulative and in addition to any and all other rights and remedies
provided bylaw, the Program Documents and the other instruments and
agreements contemplated hereby and thereby, and are not conditional or
contingent on any attempt by Buyer to exercise any of its rights under any
other related document. Buyer may exercise at any time after the
occurrence of an Event of Default one or more remedies, as it so desires,
and may thereafter at any time and from time to time exercise any other
remedy or remedies.
21. USE OF EMPLOYEE PLAN ASSETS.
If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), are
intended to be used by either party hereto (the "Plan Party") in a
Transaction, the Plan Party shall so notify the other party prior to the
Transaction. The Plan Party shall represent in writing to the other party
that the Transaction does not constitute a prohibited transaction under
ERISA or is otherwise exempt therefrom, and the other party may proceed in
reliance thereon but shall not be required so to proceed.
22. INDEMNITY.
The powers conferred on Buyer hereunder are solely for its protection and
do not impose any duty on it to exercise any such powers. Following the
occurrence of an Event of Default, Buyer shall have no duty of care to
Seller as to any Purchased Asset or any other Collateral or with respect
to the taking of any necessary steps to preserve rights against other
parties, or any other obligation pertaining to such Purchased Asset or
Collateral. Seller and Seller's successors and assigns waive all rights
whatsoever against Buyer for any loss, expense, liability or damage Seller
may suffer as a result of actions taken pursuant to the Program Documents,
including those arising under any "mortgagee in possession" or similar
doctrine. Seller agrees to, and shall, indemnify Buyer, Agent, their
respective Affiliates and their respective officers, directors, partners,
employees, representatives and agents (collectively, the "Indemnified
Parties", each an "Indemnified Party") from, and hold each of them
harmless against, (i) any and all losses, liabilities, claims, damages,
judgments, penalties, suits, actions, costs, disbursements or expenses
("losses", including, but not limited to, attorneys' fees, legal expenses
and the allocated cost of internal counsel) whether or not suit is brought
and settlement costs imposed on, asserted against or incurred by any of
them as a result of, or arising out of, or in any way related to, or by
reason of, any investigation, litigation or other proceeding (whether or
not such Indemnified Party is a party thereto) relating to, resulting from
or arising out of any of the Program Documents and all other documents
related thereto, any breach of a representation or warranty of Seller or
Seller's officer in this Agreement or any other Program Document, and all
actions taken pursuant thereto (but excluding any such Losses to the
extent incurred by reason of gross negligence or willful misconduct on the
part of the h Party to be indemnified) and (ii) any imposition of
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taxes (excluding taxes based on net income of Buyer imposed by the
jurisdiction under the laws of which Buyer is organized or maintains an
office) for the frill amount of such taxes paid by Buyer or Agent and any
liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such taxes were
correctly or legally asserted. Payment under this indemnification shall be
made within 30 days after the date the Buyer makes written demand
therefor. In addition, Seller shall compensate and indemnify Buyer and
Agent for all reasonable costs, expenses, loss and other liabilities that
Buyer may sustain in connection with the protection of Buyer's rights
under or the enforcement of the Program Documents or any other documents
received by Buyer or Custodian in connection therewith. Seller agrees to
pay, and reimburse Buyer, Agent and Custodian for, (i) all fees and taxes
in connection with the recording or filing of instruments and documents in
public offices, payment or discharge of any taxes or liens upon or in
respect of the Purchased Assets, (ii) any present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Program Documents, and (iii) all other fees, costs
and other expenses in connection with protecting, maintaining or
preserving the Purchased Assets and Buyer's interest therein, whether
through judicial proceedings or otherwise, or in defending or prosecuting
any actions, suits or proceedings arising out of or relating to the
Purchased Assets. Seller's indemnity obligations contained in this
Paragraph 22 shall continue in full force and effect notwithstanding the
full payment of all Obligations and notwithstanding the discharge thereof
or termination of this Agreement.
23. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS.
Seller hereby expressly waives, to the fullest extent permitted bylaw,
every statute of limitation on a deficiency judgment, any reduction in the
proceeds of any Purchased Assets as a result of restrictions upon Buyer or
Custodian contained in the Program Documents or any other instrument
delivered in connection therewith, and any right that it may have to
direct the order in which any of the Purchased Assets shall be disposed of
in the event of any disposition pursuant hereto.
24. REIMBURSEMENT.
All sums expended by Buyer in connection with the exercise of any right or
remedy provided for herein shall be and remain Seller's obligation. Seller
agrees to pay, with interest at the Default Rate to the extent that an
Event of Default has occurred, the reasonable out-of-pocket expenses and
reasonable attorneys' fees incurred by Buyer, Agent and Custodian in
connection with the preparation, negotiation, administration and
enforcement of the Program Documents, the taking of any action, including
legal action, required or permitted to be taken by Buyer, Agent and/or
Custodian pursuant thereto, any "due diligence" or Loan Agent reviews
conducted by Agent or on its behalf or any refinancing or
- 31 -
restructuring in the nature of a "workout". If Buyer determines that, due
to the introduction of, any change in, or the compliance by Buyer with (1)
the Eurocurrency Reserve Requirement or (ii) the interpretation of any
law, regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there
shall be an increase in the cost to Buyer in engaging in the present or
any fixture Transactions, then Seller agrees to pay to Buyer, from time to
time, upon demand by Buyer (with a copy to Custodian) the actual cost of
additional amounts as specified by Buyer to compensate Buyer for such
increased costs.
25. FURTHER ASSURANCES.
Seller agrees to do such further acts and things and to execute and
deliver to Buyer such additional assignments, acknowledgments, agreements,
powers and instruments as are reasonably required by Buyer to carry into
effect the intent and purposes of this Agreement, to perfect the interests
of Buyer in the Purchased Assets or to better assure and confirm unto
Buyer its rights, powers and remedies hereunder.
26. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION.
This Agreement supersedes and integrates all previous negotiations,
contracts, agreements and understandings between the parties relating to a
sale and repurchase of Purchased Assets and Additional Purchased Assets
thereto, and it, together with the other Program Documents, each
Confirmation, and the other documents delivered pursuant hereto or
thereto, contains the entire final agreement of the parties. No prior
negotiation, agreement, understanding or prior contract shall have any
validity hereafter.
27. TERMINATION.
This Agreement shall remain in effect until the earlier of (i) the Final
Repurchase Date and (ii) at the Buyer's option, the occurrence of an Event
of Default. However, no such termination shall affect Seller's outstanding
obligations to Buyer at the time of such termination. Seller's obligations
to indemnify Buyer pursuant to this Agreement shall survive the
termination hereof. The Seller may request in writing a renewal of this
Agreement no earlier than 150 days prior to the Termination Date. The
Buyer shall respond to such request within 30 days as to whether the
request has been approved. Any such renewal shall be determined by the
Buyer in its sole discretion.
28. ASSIGNMENT.
The Program Documents are not assignable by Seller. Buyer may from time to
time assign all or a portion of its rights and obligations under this
Agreement and the Program Documents; provided, however that Buyer shall
maintain, for review by Seller upon written request, a register of
assignees and a copy of an executed
- 32 -
assignment and acceptance by Buyer and assignee ("Assignment and
Acceptance"), specifying the percentage or portion of such rights and
obligations assigned. Upon such assignment, (a) such assignee shall be a
party hereto and to each Program Document to the extent of the percentage
or portion set forth in the Assignment and Acceptance, and shall succeed
to the applicable rights and obligations of Buyer hereunder, and (b) Buyer
shall, to the extent that such rights and obligations have been so
assigned by it to either (i) an Affiliate of Buyer which assumes the
obligations of Buyer and is of equivalent creditworthiness (as determined
by Seller in its sole discretion) or (ii) to another Person approved by
Seller (such approval not to be unreasonably withheld) which assumes the
obligations of Buyer, be released from its obligations hereunder and under
the Program Documents. Unless otherwise stated in the Assignment and
Acceptance, Seller shall continue to take directions solely from Buyer
unless otherwise notified by Buyer in writing. Buyer may distribute to any
prospective assignee any document or other information delivered to Buyer
by Seller.
29. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement nor any consent
to any failure to comply herewith or therewith shall in any event be
effective unless the same shall be in writing and signed by Seller and
Buyer, and then such amendment, waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
30. SEVERABILITY.
If any provision of Program Document is declared invalid by any court of
competent jurisdiction, such invalidity shall not affect any other
prevision of the Program Documents, and each Program Document shall be
enforced to the fullest extent permitted by law.
31. BINDING EFFECT; GOVERNING LAW.
This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and assigns, except that Seller may
not assign or transfer any of its rights or obligations under this
Agreement, Confirmation or any other Program Document without the prior
written consent of Buyer. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
32. CONSENT TO JURISDICTION.
SELLER HEREBY WAIVES TRIAL BY JURY. SELLER HEREBY IRREVOCABLY CONSENTS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
- 33 -
YORK, ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR
PROCEEDING. SELLER HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION SELLER MAY
HAVE TO, PERSONAL JURISDICTION AND VENUE EN THE COURTS OF THE STATE OF NEW
YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE
PROGRAM DOCUMENTS.
33. SINGLE AGREEMENT.
Seller and Buyer acknowledge that, and have entered hereinto and will
enter into each Transaction hereunder in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and have been made in consideration
of each other. Accordingly, Seller and Buyer each agree (i) to perform all
of its obligations in respect of each Transaction hereunder, and that a
default in the performance of any such obligations shall constitute a
default by it in respect of all Transactions hereunder, and (ii) that
payments, deliveries and other transfers made by either of them in respect
of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfer in respect of any other
Transaction hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other and
netted.
34. INTENT.
Seller and Buyer recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the
United States Code, as amended ("USC") (except insofar as the Loans
subject to such Transaction or the term of such Transaction would render
such definition inapplicable), and a "securities contract" as that term is
defined in Section 741 of Title 11 of the USC (except insofar as the Loans
subject to such Transaction or the term of such Transaction would render
such definition inapplicable).
It is understood that Buyer right to liquidate the Purchased Assets
delivered to it in connection with the Transactions hereunder or to
exercise any other remedies pursuant to Paragraph 20 hereof is a
contractual right to liquidate such Transaction as described in Sections
555 and 559 of Title 112 of the USC.
Seller and Buyer agree and acknowledge that if Seller is an "insured
deposit institution," as such term is defined in the Federal Deposit
Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a
"qualified financial contract," as that term is defined in FDIA and any
rules, order or policy statements thereunder (except insofar as the Loans
subject such to such Transaction would render such definition
inapplicable).
- 34 -
It is understood that this Agreement constitutes a "netting contract" as
defined in and subject to Title IV of the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), and each payment
entitlement and payment obligation under any Transaction hereunder shall
constitute a "covered contractual payment entitlement" or "covered
contractual payment obligation", respectively, as defined in and subject
to FDICIA (except insofar as one or both of the parties is not a
"financial institution" as that term is defined in FDICIA).
35. NOTICES AND OTHER COMMUNICATIONS.
Any notice required or permitted by this Agreement shall be in writing and
shall be effective and deemed delivered only when received by the party to
which it is sent; provided, however, that a facsimile transmission shall
be deemed to be received when transmitted so long as the transmitting
machine has provided an electronic confirmation of such transmission. Any
such notice shall be sent to a party at the address or facsimile
transmission number set forth in the signature page of the Custodial
Agreement, as such address or number may be changed by.
- 35 -
IN WITNESS WHEREOF, Seller and Buyer have caused their names to be signed
to this Master Repurchase Agreement by their respective officers thereunto duly
authorized as of the date first above written.
ARBOR COMMERCIAL MORTGAGE, LLC,
AS SELLER
By: /s/ Xxxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxxx X. Xxxxxx
----------------------------------
Title: Chief Financial Officer
---------------------------------
NOMURA CREDIT & CAPITAL, INC.,
AS BUYER AND AGENT, AS APPLICABLE
By: /s/ Xxxxx. X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------------
Title: President
---------------------------------
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ANNEX I
BUYER ACTING AS AGENT
This Annex I forms a part of the Master Repurchase Agreement dated as of
_____________, 20__ (the "Agreement") between ____________________ and
________________. This Annex I sets forth the terms and conditions governing all
transactions in which a party selling assets or buying assets, as the case may
be ("Agent"), in a Transaction is acting as agent for one or more third parties
(each, a "Principal"). Capitalized terms used but not defined in this Annex I
shall have the meanings ascribed to them in the Agreement.
1. ADDITIONAL REPRESENTATIONS.
Agent hereby makes the following representations, which shall continue
during the term of any Transaction: Principal has duly authorized Agent to
execute and deliver the Agreement on its behalf, has the power to so
authorize Agent and to enter into the Transactions contemplated by the
Agreement and to perform the obligations of Seller or Buyer, as the case
may be, under such Transactions, and has taken all necessary action to
authorize such execution and delivery by Agent and such performance by it.
2. IDENTIFICATION OF PRINCIPALS.
Agent agrees (a) to provide the other party, prior to the date on which
the parties agree to enter into any Transaction under the Agreement, with
a written list of Principals for which it intends to act as Agent (which
list may be amended in writing from time to time with the consent of the
other party), and (b) to provide the other party, before the close of
business on the next business day after orally agreeing to enter into a
Transaction, with notice of the specific Principal or Principals for whom
it is acting in connection with such Transaction. If (1) Agent fails to
identify such Principal or Principals prior to the close of business on
such next business day or (ii) the other party shall determine in its sole
discretion that any Principal or Principals identified by Agent are not
acceptable to it, the other party may reject and rescind any Transaction
with such Principal or Principals, return to Agent any Purchased Assets or
portion of the Purchase Price, as the case may be, previously transferred
to the other party and refuse any further performance under such
Transaction, and Agent shall immediately return to the other party any
portion of the Purchase Price or Purchased Assets, as the case may be,
previously transferred to Agent in connection with such Transaction;
provided, however, that (A) the other party shall promptly (and in any
event within one business day) notify Agent of its determination to reject
and rescind such Transaction and (B) to the extent that any performance
was rendered by any party under any Transaction rejected by the other
party, such party shall remain entitled to any Price Differential or other
amounts that would have been payable to it with respect to such
performance if such Transaction had not been rejected. The other party
acknowledges that Agent shall not have any obligation to provide
- 37 -
it with confidential information regarding the financial status of its
Principals; Agent agrees, however, that it will assist the other party in
obtaining front Agent's Principals such information regarding the
financial status of such Principals as the other party may reasonably
request.
3. LIMITATION OF AGENT'S LIABILITY.
The parties expressly acknowledge that if the representations of Agent
under the Agreement, including this Annex I, are true and correct in all
material respects during the term of any Transaction and Agent otherwise
complies with the provisions of this Annex I, then (a) Agent's obligations
under the Agreement shall not include a guarantee of performance by its
Principal or Principals and (b) the other part remedies shall not include
a right of setoff in respect of rights or obligations, if any, of Agent
arising in other transactions in which Agent is acting as principal.
4. MULTIPLE PRINCIPALS.
a. In the event that Agent proposes to act for more than one Principal
hereunder, Agent and the other party shall elect whether (i) to
treat Transactions under the Agreement as transactions entered into
on behalf of separate Principals or (ii) to aggregate such
Transactions as if they were transactions by a single Principal.
Failure to make such an election in writing shall be deemed an
election to treat Transactions under the Agreement as transactions
on behalf of separate Principals.
b. In the event that Agent and the other party elect (or are deemed to
elect) to treat Transactions under the Agreement as transactions on
behalf of separate Principals, the parties agree that (i) Agent will
provide the other party, together with the notice described in
Paragraph 2(b) of this Annex I, notice specifying the portion of
each Transaction allocable to the account of each of the Principals
for which it is acting (to the extent that any such Transaction is
allocable to the account of more than one Principal); (ii) the
portion of any individual Transaction allocable to each Principal
shall be deemed a separate Transaction under the Agreement (iii) the
margin maintenance obligations of Seller under Paragraph 6(a) of the
Agreement shall be determined on a Transaction-by-Transaction basis
(unless the parties agree to determine such obligations on a
Principal-by-Principal basis); and (iv) Buyer's and Seller's
remedies under the Agreement upon the occurrence of an Event of Del
nit shall be determined as if Agent had entered into a separate
Agreement with the other party on behalf of each of its Principals.
c. In the event that Agent and the other party elect to treat
Transactions under the Agreement as if they were transactions by a
single Principal, the parties agree that (i) Agent's notice under
Paragraph 2(b) of this Annex I need only identify the names of its
Principals but not the portion of each
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Transaction allocable to each Principal's account; (ii) the margin
maintenance obligations of Seller under Paragraph 6(a) of the
Agreement shall, subject to any greater requirement imposed by
applicable law, be determined on an aggregate basis for alt
Transactions entered into by Agent on behalf of any Principal; and
(iii) Buyer's and Seller's remedies upon the occurrence of an Event
of Default shall be determined as if all Principals were a single
Seller or Buyer, as the case may be.
d. Notwithstanding any other provision of the Agreement (including,
without limitation, this Annex I), the parties agree that any
Transactions by Agent on behalf of an employee benefit plan under
ERISA shall be treated as Transactions on behalf of separate
Principals in accordance with Paragraph 4(b) of this Annex I (and
all margin maintenance obligations of the parties shall be
determined on a Transaction-by-Transaction basis).
5. INTERPRETATION OF TERMS.
All references to "Seller" or "Buyer", as the case may be, in the
Agreement shall, subject to the provisions of this Annex I (including,
among other provisions, the limitations on Agent's liability in Paragraph
3 of this Annex I be construed to reflect that (i) each Principal shall
have, in connection with any Transaction or Transactions entered into by
Agent on its behalf, the rights, responsibilities, privileges and
obligations of a "Seller" or "Buyer", as the case may be, directly
entering into such Transaction or Transactions with the other party under
the Agreement, and (ii) Agent's Principal or Principals have designated
Agent as their sole agent for performance of Seller's obligations to Buyer
or Buyer's obligations to Seller, as the case may be, and for receipt of
performance by Buyer of its obligations to Seller or Seller of its
obligations to Buyer, as the case may be, in connection with any
Transaction or Transactions under the Agreement (including, among other
things, as Agent for each Principal in connection with transfers of
Securities, cash or other property and as agent for giving and receiving
all notices under the Agreement) Both Agent and its Principal or
Principals shall be deemed "parties" to the Agreement and all references
to a "party" or "either party" in the Agreement shall be deemed revised
accordingly.
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