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EXHIBIT 10.39
Public Securities Association [PSA LOGO]
00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
Telephone (000) 000-0000
MASTER REPURCHASE AGREEMENT
DATED AS OF SEPTEMBER 19, 1995
BETWEEN:
FIRST NATIONWIDE MORTGAGE CORPORATION
AND
LOMAS MORTGAGE USA, INC.
1. APPLICABILITY
From time to time the parties hereto may enter into transactions in
which one party ("Seller") agrees to transfer to the other ("Buyer") securities
or financial instruments ("Securities") against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such Securities at
a date certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a "Transaction" and shall be
governed by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto, unless otherwise agreed in writing.
2. DEFINITIONS
(a) "Act of Insolvency", with respect to any party, (i) the
commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
law, or such party seeking the appointment of a receiver, trustee, custodian or
similar official for such party or any substantial part of its property, or
(ii) the commencement of any such case or proceeding against such party, or
another seeking such an appointment, or the filing against a party of an
application for a protective decree under the provisions of the Securities
Investor Protection Act of 1970, which (A) is consented to or not timely
contested by such party, (B) results in the entry of an order for relief, such
an appointment, the issuance of such a protective decree or the entry of an
order having a similar effect, or (C) is not dismissed within 15 days, (iii)
the making by a party of a general assignment for the benefit of creditors, or
(iv) the admission in writing by a party of such party's inability to pay such
party's debts as they become due;
(b) "Additional Purchased Securities", Securities provided by
Seller to Buyer pursuant to Paragraph 4(a) hereof;
(c) "Buyer's Margin Amount", with respect to any Transaction as of
any date, the amount obtained by application of a percentage (which may be
equal to the percentage that is agreed to as the Seller's Margin Amount under
subparagraph (q) of this Paragraph), agreed to by Buyer and Seller prior to
entering into the Transaction, to the Repurchase Price for such Transaction as
of such date;
(d) "Confirmation", the meaning specified in Paragraph 3(b) hereof;
(e) "Income", with respect to any Security at any time, any
principal thereof then payable and all interest, dividends or other
distributions thereon;
(f) "Margin Deficit", the meaning specified in Paragraph 4(a)
hereof;
(g) "Margin Excess", the meaning specified in Paragraph 4(b)
hereof;
(h) "Market Value", with respect to any Securities as of any date,
the price for such Securities on such date obtained from a generally recognized
source agreed to by the parties or the most recent closing bid quotation from
such a source, plus accrued Income to the extent not included therein (other
than any Income credited or transferred to, or applied to the obligations of,
Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to
market practice for such Securities);
(i) "Price Differential", with respect to any Transaction
hereunder as of any date, the aggregate amount obtained by daily application of
the Pricing Rate for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of days during
the period commencing on (and including) the Purchase Date for such Transaction
and ending on (but excluding) the date of determination (reduced by any amount
of such Price Differential previously paid by Seller to Buyer with respect to
such Transaction);
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(j) "Pricing Rate", the per annum percentage rate for
determination of the Price Differential;
(k) "Prime Rate", the prime rate of U.S. money center commercial
banks as published in The Wall Street Journal;
(l) "Purchase Date", the date on which Purchased Securities are
transferred by Seller to Buyer;
(m) "Purchase Price", (i) on the Purchase Date, the price at which
Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter,
such price increased by the amount of any cash transferred by Buyer to Seller
pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash
transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to
reduce Seller's obligations under clause (ii) of Paragraph 5 hereof;
(n) "Purchased Securities", the Securities transferred by Seller
to Buyer in a Transaction hereunder, and any Securities substituted therefor in
accordance with Paragraph 9 hereof. The term "Purchased Securities" with
respect to any Transaction at any time also shall include Additional Purchased
Securities delivered pursuant to Paragraph 4(a) and shall exclude Securities
returned pursuant to Paragraph 4(b);
(o) "Repurchase Date", the date on which Seller is to repurchase
the Purchased Securities from Buyer, including any date determined by
application of the provisions of Paragraphs 3(c) or 11 hereof;
(p) "Repurchase Price", the price at which Purchased Securities
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, increased by any amount determined by the
application of the provisions of Paragraph 11 hereof;
(q) "Seller's Margin Amount", with respect to any Transaction as
of any date, the amount obtained by application of a percentage (which may be
equal to the percentage that is agreed to as the Buyer's Margin Amount under
subparagraph (c) of this Paragraph), agreed to by Buyer and Seller prior to
entering into the Transaction, to the Repurchase Price for such Transaction as
of such date.
3. INITIATION; CONFIRMATION; TERMINATION
(a) An agreement to enter into a Transaction may be made orally or
in writing at the initiation of either Buyer or Seller. On the Purchase Date
for the Transaction, the Purchased Securities shall be transferred to Buyer or
its agent against the transfer of the Purchase Price to an account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or
Seller (or both), as shall be agreed, shall promptly deliver to the other party
a written confirmation of each Transaction (a "Confirmation"). The Confirmation
shall describe the Purchased Securities (including CUSIP number, if any),
identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the
Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be
terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to
the Transaction, and (v) any additional terms or conditions of the Transaction
not inconsistent with this Agreement. The Confirmation, together with this
Agreement, shall constitute conclusive evidence of the terms agreed between
Buyer and Seller with respect to the Transaction to which the Confirmation
relates, unless with respect to the Confirmation specific objection is made
promptly after receipt thereof. In the event of any conflict between the terms
of such Confirmation and this Agreement, this Agreement shall prevail.
(c) In the case of Transactions terminable upon demand, such
demand shall be made by Buyer or Seller, no later than such time as is
customary in accordance with market practice, by telephone or otherwise on or
prior to the business day on which such termination will be effective. On the
date specified in such demand, or on the date fixed for termination in the case
of Transactions having a fixed term, termination of the Transaction will be
effected by transfer to Seller or its agent of the Purchased Securities and any
Income in respect thereof received by Buyer (and not previously credited or
transferred to, or applied to the obligations of, Seller pursuant to Paragraph
5 hereof) against the transfer of the Repurchase Price to an account of Buyer.
4. MARGIN MAINTENANCE
(a) If at any time the aggregate Market Value of all Purchased
Securities subject to all Transactions in which a particular party hereto is
acting as Buyer 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 Seller's option, to transfer to Buyer cash or
additional Securities reasonably acceptable to Buyer ("Additional Purchased
Securities"), so that the cash and aggregate Market Value of the Purchased
Securities, including any such Additional Purchased Securities, will thereupon
equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount
of any Margin Deficit as of such date arising from any Transactions in which
such Buyer is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased
Securities subject to all Transactions in which a particular party hereto is
acting as Seller exceeds the aggregate Seller's Margin Amount for all such
Transactions at such time (a "Margin Excess"), then Seller may by notice to
Buyer require Buyer in such Transactions, at Buyer's option, to transfer cash
or Purchased Securities to Seller, so that the aggregate Market Value of the
Purchased Securities, after deduction of any such cash or any Purchased
Securities so transferred, will thereupon not exceed such aggregate Seller's
Margin Amount (increased by the amount of any Margin Excess as of such date
arising from any Transactions in which such Seller is acting as Buyer).
(c) Any cash transferred pursuant to this Paragraph shall be
attributed to such Transactions as shall be agreed upon by Buyer and Seller.
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(d) Seller and Buyer may agree, with respect to any or all
Transactions hereunder, that the respective rights of Buyer or Seller (or both)
under subparagraphs (a) and (b) of this Paragraph may be exercised only where a
Margin Deficit or Margin Excess exceeds a specified dollar amount or a
specified percentage of the Repurchase Prices for such Transactions (which
amount or percentage shall be agreed to by Buyer and Seller prior to entering
into any such Transactions).
(e) Seller and Buyer may agree, with respect to any or all
Transactions hereunder, that the respective rights of Buyer and Seller under
subparagraphs (a) and (b) of this Paragraph to require the elimination of a
Margin Deficit or a Margin Excess, as the case may be, may be exercised
whenever such a Margin Deficit or Margin Excess exists with respect to any
single Transaction hereunder (calculated without regard to any other
Transaction outstanding under this Agreement).
5. INCOME PAYMENTS
Where a particular Transaction's term extends over an Income payment
date on the Securities subject to that Transaction, Buyer shall, as the parties
may agree with respect to such Transaction (or, in the absence of any
agreement, as Buyer shall reasonably determine in its discretion), on the date
such Income is payable either (i) transfer to or credit to the account of
Seller an amount equal to such Income payment or payments with respect to any
Purchased Securities subject to such Transaction or (ii) apply the Income
payment or payments to reduce the amount to be transferred to Buyer by Seller
upon termination of the Transaction. Buyer shall not be obligated to take any
action pursuant to the preceding sentence to the extent that such action would
result in the creation of a Margin Deficit, unless prior thereto or
simultaneously therewith Seller transfers to Buyer cash or Additional Purchased
Securities sufficient to eliminate such Margin Deficit.
6. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be sales
and purchases and not loans, in the event any such Transactions are deemed to
be loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Securities with respect to all Transactions hereunder and all proceeds thereof.
7. PAYMENT AND TRANSFER
Unless otherwise mutually agreed, all transfers of funds hereunder
shall be in immediately available funds. All Securities transferred by one
party hereto to the other party (i) shall be in suitable form for transfer or
shall be accompanied by duly executed instruments of transfer or assignment in
blank and such other documentation as the party receiving possession may
reasonably request, (ii) shall be transferred on the book-entry system of a
Federal Reserve Bank, or (iii) shall be transferred by any other method
mutually acceptable to Seller and Buyer. As used herein with respect to
Securities, "transfer" is intended to have the same meaning as when used in
Section 8-313 of the New York Uniform Commercial Code or, where applicable, in
any federal regulation governing transfers of the Securities.
8. SEGREGATION OF PURCHASED SECURITIES
To the extent required by applicable law, all Purchased Securities in
the possession of Seller shall be segregated from other securities in its
possession and shall be identified as subject to this Agreement. Segregation
may be accomplished by appropriate identification on the books and records of
the holder, including a financial intermediary or a clearing corporation. Title
to all Purchased Securities shall pass to Buyer and, unless otherwise agreed by
Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging
in repurchase transactions with the Purchased Securities or otherwise pledging
or hypothecating the Purchased Securities, but no such transaction shall
relieve Buyer of its obligations to transfer Purchased Securities to Seller
pursuant to Paragraphs 3, 4 or 11 hereof, or of Buyer's obligation to credit or
pay Income to, or apply Income to the obligations of, Seller pursuant to
Paragraph 5 hereof.
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REQUIRED DISCLOSURE FOR TRANSACTIONS IN WHICH THE SELLER RETAINS CUSTODY OF THE
PURCHASED SECURITIES
Seller is not permitted to substitute other securities for those
subject to this Agreement and therefore must keep Buyer's securities segregated
at all times, unless in this Agreement Buyer grants Seller the right to
substitute other securities. If Buyer grants the right to substitute, this
means that Buyer's securities will likely be commingled with Seller's own
securities during the trading day. Buyer is advised that, during any trading
day that Buyer's securities are commingled with Seller's securities, they
[will]* [may]** be subject to liens granted by Seller to [its clearing bank]*
[third parties]** and may be used by Seller for deliveries on other securities
transactions. Whenever the securities are commingled, Seller's ability to
resegregate substitute securities for Buyer will be subject to Seller's ability
to satisfy [the clearing]* [any]** lien or to obtain substitute securities.
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* Language to be used under 17 C.F.R. Section 403.4(e) if Seller is a
government securities broker or dealer other than a financial
institution.
** Language to be used under 17 C.F.R. Section 403.5(d) if Seller is a
financial institution.
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9. SUBSTITUTION
(a) Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such substitution
shall be made by transfer to Buyer of such other Securities and transfer to
Seller of such Purchased Securities. After substitution, the substituted
Securities shall be deemed to be Purchased Securities.
(b) In Transactions in which the Seller retains custody of
Purchased Securities, the parties expressly agree that Buyer shall be deemed,
for purposes of subparagraph (a) of this Paragraph, to have agreed to and
accepted in this Agreement substitution by Seller of other Securities for
Purchased Securities; provided, however, that such other Securities shall have
a Market Value at least equal to the Market Value of the Purchased Securities
for which they are substituted.
10. REPRESENTATIONS
Each of Buyer and Seller represents and warrants to the other that (i)
it is duly authorized to execute and deliver this Agreement, to enter into the
Transactions contemplated hereunder and to perform its obligations hereunder
and has taken all necessary action to authorize such execution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing in advance of any Transaction by the other party hereto, as
agent for a disclosed principal), (iii) the person signing this Agreement on
its behalf is duly authorized to do so on its behalf (or on behalf of any such
disclosed principal), (iv) it has obtained all authorizations of any
governmental body required in connection with this Agreement and the
Transactions hereunder and such authorizations are in full force and effect and
(v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or
rule applicable to it or any agreement by which it is bound or by which any of
its assets are affected. On the Purchase Date for any Transaction Buyer and
Seller shall each be deemed to repeat all the foregoing representations made by
it.
11. EVENTS OF DEFAULT
In the event that (i) Seller fails to repurchase or Buyer fails to
transfer Purchased Securities upon the applicable Repurchase Date, (ii) Seller
or Buyer fails, after one business day's notice, to comply with Paragraph 4
hereof, (iii) Buyer fails to comply with Paragraph 5 hereof, (iv) an Act of
Insolvency occurs with respect to Seller or Buyer, (v) any representation made
by Seller or Buyer shall have been incorrect or untrue in any material respect
when made or repeated or deemed to have been made or repeated, or (vi) Seller
or Buyer shall admit to the other its inability to, or its intention not to,
perform any of its obligations hereunder (each an "Event of Default"):
(a) At the option of the nondefaulting party, exercised by written
notice to the defaulting party (which option shall be deemed to have been
exercised, even if no notice is given, immediately upon the occurrence of an
Act of Insolvency), the Repurchase Date for each Transaction hereunder shall be
deemed immediately to occur.
(b) In all Transactions in which the defaulting party is acting as
Seller, if the nondefaulting party exercises or is deemed to have exercised the
option referred to in subparagraph (a) of this Paragraph, (i) the defaulting
party's obligations hereunder to repurchase all Purchased Securities in such
Transactions shall thereupon become immediately due and payable, (ii) to the
extent permitted by applicable law, the Repurchase Price with respect to each
such Transaction shall be increased by the aggregate amount obtained by daily
application of (x) the greater of the Pricing Rate for such Transaction or the
Prime Rate to (y) the Repurchase Price for such Transaction as of the
Repurchase Date as determined pursuant to subparagraph (a) of this Paragraph
(decreased as of any day by (A) any amounts retained by the nondefaulting party
with respect to such Repurchase Price pursuant to clause (iii) of this
subparagraph, (B) any proceeds from the sale of Purchased Securities pursuant
to subparagraph (d)(i) of this Paragraph, and (C) any amounts credited to the
account of the defaulting party pursuant to subparagraph (e) of this Paragraph)
on a 360 day per year basis for the actual number of days during the period
from and including the date of the Event of Default giving rise to such option
to but excluding the date of payment of the Repurchase Price as so increased,
(iii) all Income paid after such exercise or deemed exercise shall be retained
by the nondefaulting party and applied to the aggregate unpaid Repurchase
Prices owed by the defaulting party, and (iv) the defaulting party shall
immediately deliver to the nondefaulting party any Purchased Securities subject
to such Transactions then in the defaulting party's possession.
(c) In all Transactions in which the defaulting party is acting as
Buyer, upon tender by the nondefaulting party of payment of the aggregate
Repurchase Prices for all such Transactions, the defaulting party's right,
title and interest in all Purchased Securities subject to such Transactions
shall be deemed transferred to the nondefaulting party, and the defaulting
party shall deliver all such Purchased Securities to the nondefaulting party.
(d) After one business day's notice to the defaulting party (which
notice need not be given if an Act of Insolvency shall have occurred, and which
may be the notice given under subparagraph (a) of this Paragraph or the notice
referred to in clause (ii) of the first sentence of this Paragraph), the
nondefaulting party may:
(i) as to Transactions in which the defaulting party is
acting as Seller, (A) immediately sell, in a recognized market at such
price or prices as the nondefaulting party may reasonably deem
satisfactory, any or all Purchased Securities subject to such
Transactions and apply the proceeds thereof to the aggregate unpaid
Repurchase Prices and any other amounts owing by the defaulting party
hereunder
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or (B) in its sole discretion elect, in lieu of selling all or a
portion of such Purchased Securities, to give the defaulting party
credit for such Purchased Securities in an amount equal to the price
therefor on such date, obtained from a generally recognized source or
the most recent closing bid quotation from such a source, against the
aggregate unpaid Repurchase Prices and any other amounts owing by the
defaulting party hereunder: and
(ii) as to Transactions in which the defaulting party is
acting as Buyer, (A) purchase securities ("Replacement Securities") of
the same class and amount as any Purchased Securities that are not
delivered by the defaulting party to the nondefaulting party as
required hereunder or (B) in its sole discretion elect, in lieu of
purchasing Replacement Securities, to be deemed to have purchased
Replacement Securities at the price therefor on such date, obtained
from a generally recognized source or the most recent closing bid
quotation from such a source.
(e) As to Transactions in which the defaulting party is acting as
Buyer, the defaulting party shall be liable to the nondefaulting party (i) with
respect to Purchased Securities (other than Additional Purchased Securities),
for any excess of the price paid (or deemed paid) by the nondefaulting party
for Replacement Securities therefor over the Repurchase Price for such
Purchased Securities and (ii) with respect to Additional Purchased Securities,
for the price paid (or deemed paid) by the nondefaulting party for the
Replacement Securities therefor. In addition, the defaulting party shall be
liable to the nondefaulting party for interest on such remaining liability with
respect to each such purchase (or deemed purchase) of Replacement Securities
from the date of such purchase (or deemed purchase) until paid in full by
Buyer. Such interest shall be at a rate equal to the greater of the Pricing
Rate for such Transaction or the Prime Rate.
(f) For purposes of this Paragraph 11, the Repurchase Price for
each Transaction hereunder in respect of which the defaulting party is acting
as Buyer shall not increase above the amount of such Repurchase Price for such
Transaction determined as of the date of the exercise or deemed exercise by the
nondefaulting party of its option under subparagraph (a) of this Paragraph.
(g) The defaulting party shall be liable to the nondefaulting
party for the amount of all reasonable legal or other expenses incurred by the
nondefaulting party in connection with or as a consequence of an Event of
Default, together with interest thereon at a rate equal to the greater of the
Pricing Rate for the relevant Transaction or the Prime Rate.
(h) The nondefaulting party shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other agreement or
applicable law.
12. SINGLE AGREEMENT
Buyer and Seller acknowledge that, and have entered hereinto and will
enter into each Transaction hereunder in consideration of and in reliance upon
the fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction
against obligations owing to them in respect of any other Transactions
hereunder and (iii) that payments, deliveries and other transfers made by
either of them in respect of any Transaction shall be deemed to have been made
in consideration of payments, deliveries and other transfers in respect of any
other Transactions hereunder, and the obligations to make any such payments,
deliveries and other transfers may be applied against each other and netted.
13. NOTICES AND OTHER COMMUNICATIONS
Unless another address is specified in writing by the respective party
to whom any notice or other communication is to be given hereunder, all such
notices or communications shall be in writing or confirmed in writing and
delivered at the respective addresses set forth in Annex 11 attached hereto.
14. ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the
parties containing general terms and conditions for repurchase transactions.
Each provision and agreement herein shall be treated as separate and
independent from any other provision or agreement herein and shall be
enforceable notwithstanding the unenforceability of any such other provision or
agreement.
15. NON-ASSIGNABILITY; TERMINATION
The rights and obligations of the pates under this Agreement and under
any Transaction shall not be assigned by either party without the prior written
consent of the other party. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns. This Agreement may be
cancelled by either party upon giving written notice to the other, except that
this Agreement shall, notwithstanding such notice, remain applicable to any
Transactions then outstanding.
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16. GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.
17. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party
shall constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to
exercise any other remedy hereunder. No modification or waiver of any provision
of this Agreement and no consent by any party to a departure herefrom shall be
effective unless and until such shall be in writing and duly executed by both
of the parties hereto. Without limitation on any of the foregoing, the failure
to give a notice pursuant to subparagraphs 4(a) or 4(b) hereof will not
constitute a waiver of any right to do so at a later date.
18. USE OF EMPLOYEE PLAN ASSETS
(a) If assets of an employee benefit plan subject to any provision
of the Employee Retirement Income Security Act of 1974 ("ERISA") are intended
to be used by either party hereto (the "Plan Party") in a Transaction, the Plan
Party shall so notify the other party prior to the Transaction. The Plan Party
shall represent in writing to the other party that the Transaction does not
constitute a prohibited transaction under ERISA or is otherwise exempt
therefrom, and the other party may proceed in reliance thereon but shall not be
required so to proceed.
(b) Subject to the last sentence of subparagraph (a) of this
Paragraph, any such Transaction shall proceed only if Seller furnishes or has
furnished to Buyer its most recent available audited statement of its financial
condition and its most recent subsequent unaudited statement of its financial
condition.
(c) By entering into a Transaction pursuant to this Paragraph,
Seller shall be deemed (i) to represent to Buyer that since the date of
Seller's latest such financial statements, there has been no material adverse
change in Seller's financial condition which Seller has not disclosed to Buyer,
and (ii) to agree to provide Buyer with future audited and unaudited statements
of its financial condition as they are issued, so long as it is a Seller in any
outstanding Transaction involving a Plan Party.
19. INTENT
(a) The parties recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the United
States Code, as amended (except insofar as the type of Securities subject to
such Transaction or the term of such Transaction would render such definition
inapplicable), and a "securities contract" as that term is defined in Section
741 of Title 11 of the United States Code, as amended.
(b) It is understood that either party's right to liquidate
Securities delivered to it in connection with Transactions hereunder or to
exercise any other remedies pursuant to Paragraph 11 hereof, is a contractual
right to liquidate such Transaction as described in Sections 555 and 559 of
Title 11 of the United States Code, as amended.
20. DISCLOSURE RELATING TO CERTAIN FEDERAL PROTECTIONS
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the
parties is a broker or dealer registered with the Securities and
Exchange Commission ("SEC") under Section 15 of the Securities
Exchange Act of 1934 ("1934 Act"), the Securities Investor Protection
Corporation has taken the position that the provisions of the
Securities Investor Protection Act of 1970 ("SIPA") do not protect the
other party with respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the
parties is a government securities broker or a government securities
dealer registered with the SEC under Section 15C of the 1934 Act, SIPA
will not provide protection to the other party with respect to any
Transaction hereunder; and
(c) in the case of Transactions in which one of the
parties is a financial institution, funds held by the financial
institution pursuant to a Transaction hereunder are not a deposit and
therefore are not insured by the Federal Deposit Insurance
Corporation, the Federal Savings and Loan Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.
(Name of Party) (Name of Party)
FIRST NATIONWIDE MORTGAGE CORPORATION LOMAS MORTGAGE USE, INC.
By /s/ J. XXXXX XXXXX By /s/ XXXXX X. XXXXXXX
Title President Title Senior Vice President
Date 9/19/95 Date 9/19/95
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ANNEX I
(continued)
SUPPLEMENTAL TERMS TO
MASTER REPURCHASE AGREEMENT,
DATED AS OF SEPTEMBER 19, 1995, BETWEEN
FIRST NATIONWIDE MORTGAGE CORPORATION AND
LOMAS MORTGAGE USA, INC.
1. APPLICABILITY. These Supplemental Terms to Master Repurchase
Agreement (the "Supplemental Terms") modify the terms and conditions
under which the parties hereto, from time to time, enter into
Transactions under the Master Repurchase Agreement (the "Master
Repurchase Agreement") dated as of September 19, 1995, between First
Nationwide Mortgage Corporation and Lomas Mortgage USA, Inc. (the
Master Repurchase Agreement, together with these Supplemental Terms,
constitutes the "Agreement"). To the extent that these Supplemental
Terms conflict with the terms of the Master Repurchase Agreement,
these Supplemental Terms shall control.
2. ADDITIONAL DEFINITIONS. Capitalized terms used in these Supplemental
Terms and not otherwise defined shall have the meanings set forth in
the Master Repurchase Agreement. Capitalized terms used in the Master
Repurchase Agreement whose definitions are modified in these
Supplemental Terms shall, for all purposes of the Agreement, be deemed
to have such modified definitions. Unless otherwise indicated, all
references to a particular time in the Agreement are to Dallas, Texas
time.
"Agency" shall refer to GNMA, FNMA and/or FHLMC as applicable.
"Agency Commitment" shall refer to a commitment by an Agency to issue
or guaranty an Agency Security, which commitment is valid, binding and
in full force and effect.
"Agency Security" shall refer to a GNMA Security, a FNMA Security or a
FHLMC Security.
"Approvals" shall refer to the approvals of the Takeout Investors
described in Paragraph 9(b)(ii) of these Supplemental Terms.
"Assignment of Trade Letter" shall refer to a letter in the form of
Exhibit B hereto, executed by the Seller, the Buyer and the Takeout
Investor identified as the "buyer" therein, confirming the assignment
to the Buyer of the Seller's rights under a Takeout Commitment.
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"Bankruptcy Code" shall refer to Title 11 of the United States Code.
"Buyer" shall mean First Nationwide Mortgage Corporation. For
purposes of any provision herein which calls for the delivery of
documents "to the Buyer" such provision shall include any entity
serving as custodian for the Buyer as may be set forth in an agreement
among the Seller, the Buyer and such custodian.
"Buyer's Margin Amount" shall have the meaning set forth in the Master
Repurchase Agreement except that the percentage referred to therein
for each Transaction shall be specified in the related Confirmation
and Funding Request.
"Confirmation and Funding Request" shall have the meaning ascribed to
"Confirmation" as set forth in the Master Repurchase Agreement and
shall be substantially in the form attached hereto as Exhibit A.
"Covered" shall have the meaning specified in Paragraph 8(a) of these
Supplemental Terms and the term "Coverage" shall have the correlative
meaning.
"FHA" shall refer to the Federal Housing Administration.
"FHLMC" shall refer to the Federal Home Loan Mortgage Corporation.
"FHLMC Guide" shall refer to the Xxxxxxx Mac Single Family
Seller/Servicer Guide, as such guide may hereafter from time to time
be amended.
"FHLMC Security" shall refer to a Mortgage Participation Certificate
issued and guaranteed by FHLMC and backed by a pool of Mortgage Loans.
"FNMA" shall refer to the Federal National Mortgage Association.
"FNMA Guide" shall refer to the Xxxxxx Mae MBS Selling and Servicing
Guide, as such guide may hereafter from time to time be amended.
"FNMA Security" shall refer to a Guaranteed Mortgage PassThrough
Certificate issued and guaranteed by FNMA and backed by a pool of
Mortgage Loans.
"GNMA" shall refer to the Government National Mortgage Association.
"GNMA Guide" shall refer to the GNMA Mortgage-Backed Securities Guide,
as such guide may hereafter from time to time be amended.
"GNMA Security" shall refer to a fully-modified pass-through
mortgage-backed certificate guaranteed by GNMA and backed by a pool of
Mortgage Loans.
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"Housing Authority Mortgage Loans" shall refer to Mortgage Loans
offered by the Seller to the Buyer under the Agreement which have been
originated under a program administered by a Housing Authority Takeout
Investor and with respect to which such Housing Authority Takeout
Investor has issued a valid, binding and enforceable commitment to the
Seller to purchase Agency Securities to be backed by such Mortgage
Loans.
"Mortgage Loans" shall refer to single family residential mortgage
loans.
"Required Mortgage Documents" with respect to a Mortgage Loan shall
refer to (i) the original note which evidences such Mortgage Loan,
endorsed in blank and without recourse, (ii) an assignment of the deed
of trust or mortgage which secures such Mortgage Loan with the
assignee in blank but otherwise in recordable form but not recorded
and all interim assignments, if any, (iii) a Warehouse Lender's
Release Letter, and (iv) such other documents which relate to such
Mortgage Loan as the Buyer may, in its reasonable discretion, require.
"Securities" shall, in addition to the definition of "Securities" set
forth in the Master Repurchase Agreement, include Mortgage Loans, any
notes which evidence Mortgage Loans and all documents, including
without limitation any of the Required Mortgage Documents, which
secure, or otherwise relate to any Mortgage Loan.
"Seller" shall refer to Lomas Mortgage USA, Inc.
"Seller's Margin Amount" shall have the meaning set forth in the
Master Repurchase Agreement except that the percentage referred to
therein for each Transaction shall be specified in the related
Confirmation and Funding Request.
"Takeout Commitment" shall refer to a trade confirmation from the
Takeout Investor to the Seller confirming the details of a forward
trade between the Takeout Investor and the Seller with respect to one
or more Agency Securities, which trade confirmation shall be valid,
binding and in full force and effect.
"Takeout Investor" shall refer to (a) the Agencies, (b) the California
Public Employees' Retirement System, (c) the entities set forth on
Part A of Schedule I (the "Private Takeout Investors"), (d) the
entities set forth on Part B of Schedule I (the "Housing Authority
Takeout Investors"), and (e) such other securities dealers or other
financial institutions as may be acceptable to the Buyer in its sole
discretion.
"Transaction" shall, in addition to the definition set forth in the
Master Repurchase Agreement, refer to substitutions pursuant to
Paragraph 9 of the Master Repurchase Agreement.
"VA" shall refer to the Department of Veterans Affairs.
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"Warehouse Lender's Release Letter" shall refer to (a) a document
executed by an entity other than the Seller (the "Warehouse Lender")
which states that the Mortgage Loan(s) delivered therewith are
delivered in trust and that a security interest therein has been
retained by the Warehouse Lender pending payment of the Warehouse
Release Purchase Price therefor and that upon payment of such
Warehouse Release Purchase Price, such trust will be terminated and
all claim of the Warehouse Lender to such Mortgage Loans and such
security interest will be released or (b) a document executed by the
Seller which states that the Mortgage Loan(s) delivered therewith are
not subject to any claim or security interest in favor of any entity.
"Warehouse Release Purchase Price" shall mean, as to any Mortgage
Loan, the amount stated in the Warehouse Lender's Release Letter, if
any, applicable thereto, as the amount which must be received by the
Warehouse Lender thereunder for the security interest of such
Warehouse Lender in such Mortgage Loan to be released.
3. MODIFICATIONS TO MASTER REPURCHASE AGREEMENT.
(a) All references to Buyer in the Master Repurchase Agreement
shall be deemed to be references to First Nationwide Mortgage
Corporation and all references to Seller in the Master
Repurchase Agreement shall be deemed to be references to Lomas
Mortgage USA, Inc.
(b) Paragraph 11(d)(ii) of the Master Repurchase Agreement is
hereby deleted in its entirety and restated as follows:
(ii) as to Transactions in which the defaulting party is
the Buyer, at reasonable prices therefor and on such dates as it may
determine in its sole discretion, (A) purchase securities or mortgage
loans (collectively, "Replacement Securities") of the same class and
amount, in the case of securities, and of substantially the same
maturity, principal amount and interest rate, in the case of mortgage
loans, as any Purchased Securities that are not delivered by the
defaulting party to the nondefaulting party as required hereunder or
(B) elect, in lieu of purchasing Replacement Securities, to be deemed
to have Purchased Replacement Securities.
4. CONFIRMATION AND FUNDING REQUESTS.
(a) A Confirmation and Funding Request shall be prepared and duly
executed by the Seller and delivered to the Buyer prior to
2:30 p.m. on the business day preceding the proposed Purchase
Date for the Transaction. The Buyer shall, as soon as
practicable following receipt of a Confirmation and Funding
Request and in any event no later than 9:00 a.m. on the
proposed Purchase Date, either reject such Confirmation and
Funding Request or deliver to Seller a completed and signed
Confirmation and Funding Request.
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(b) Each Confirmation and Funding Request shall be binding upon
the parties hereto upon written acceptance thereof by the
Buyer.
(c) Notwithstanding the last sentence of Paragraph 3(b) of the
Master Repurchase Agreement and except as set forth in
Paragraphs 23 and 24 of these Supplemental Terms, in the event
of any conflict between the terms of a Confirmation and
Funding Request and the Agreement, such Confirmation and
Funding Request shall prevail. In the event of any conflict
between the terms of a Confirmation and Funding Request and
the terms set forth in Paragraphs 23 and 24 of these
Supplemental Terms, the terms set forth in Paragraphs 23 and
24 of these Supplemental Terms shall prevail.
5. INCOME PAYMENTS. All payments and distributions, whether in cash or
in kind, made on or with respect to the Purchased Securities shall,
unless otherwise mutually agreed by the Buyer and Seller, be paid,
delivered or transferred:
(a) in the case of Agency Securities, directly to the Buyer; and
(b) in the case of Mortgage Loans, so long as an Event of Default
on the part of Seller or an Additional Event of Termination
set forth in Paragraph 11 of these Supplemental Terms shall
not have occurred and be continuing, directly to Seller from
the related mortgagor.
6. MARKET VALUE DETERMINATION. The Buyer shall determine the Market
Value for the Purchased Securities from time to time and at such time
as it may elect in its sole discretion. Notwithstanding any provision
of the Agreement to the contrary, the Buyer shall assign a zero Market
Value to any Mortgage Loan (i) that has been delinquent for at least
thirty (30) days, or (ii) with respect to which there is a breach of a
representation, warranty or covenant made by Seller in the Agreement
that materially adversely affects the Buyer's interest in such
Mortgage Loan as determined by the Buyer in its sole discretion and
which breach has not been cured by Seller prior to the date on which
Market Value is being determined; provided, however, that for any
Purchased Securities with respect to which (x) the Takeout Commitment
relevant to such Purchased Securities remain in full force and effect,
(y) such Purchased Securities satisfy all applicable requirements of
such Takeout Commitment, and (z) the Takeout Investor obligated under
such Takeout Commitment remains satisfactory to the Buyer in its
reasonable discretion, the Market Value of such Purchased Securities
shall be the cash price ultimately payable therefor under the terms of
such Takeout Commitment.
7. INTENT OF THE PARTIES; SECURITY INTEREST.
(a) Each Transaction is entered into in contemplation of either
(i) the sale of one or more Mortgage Loans or (ii) the
issuance of one or more Agency Securities backed by the
related Mortgage Loans. Subject to Paragraph 16 of these
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Supplemental Terms, the parties intend that Seller will act as
issuer or seller/servicer with respect to such Mortgage Loans
and Agency Securities, as applicable, and that each Agency
Security will be issued in the name of, and delivered to or
upon the order of, the Buyer.
(b) The parties intend that each Transaction shall be entitled to
the treatment afforded a "repurchase agreement" as defined in
Section 101(47) of the Bankruptcy Code. The parties further
intend that in the event, for any reason, any Transaction is
construed by any court to not be entitled to such treatment,
then such Transaction shall qualify as, and be entitled to the
treatment afforded to, a "securities contract" as defined in
Section 741(7) of the Bankruptcy Code.
(c) In the event, for any reason, any Transaction is construed by
any court as a secured loan rather than a purchase and sale,
the parties intend that the Buyer shall have a perfected first
priority security interest in all right title and interest of
the Seller in and to (i) the Purchased Securities, (ii) any
Takeout Commitment assigned to the Buyer pursuant to the
Agreement, and (iii) any proceeds of the foregoing.
(d) Seller shall pay all fees and expenses associated with
perfecting such security interest including, without
limitation, the filing of financing statements, or
continuation statements to such financing statements or any
other filing in connection with the perfection of such
security interest and Seller shall pay all fees and expenses
(including, without limitation, the reasonable fees and
expenses of counsel) incurred by the Buyer in connection with
the enforcement of its security interest.
8. COVERAGE; DELIVERY OF ADDITIONAL DOCUMENTS; ASSIGNMENT.
(a) Prior to the payment by the Buyer of the Purchase Price on the
Purchase Date for each Transaction involving Mortgage Loans
which are not Housing Authority Mortgage Loans, the Seller
shall deliver to the Buyer evidence that all Mortgage Loans,
other than Housing Authority Mortgage Loans, sold to the Buyer
and not repurchased by the Seller under this Agreement, after
giving effect to the Transaction then contemplated are
"Covered." For purposes of the Agreement, the Mortgage Loans
other than the Housing Authority Mortgage Loans shall be
Covered if and only if:
(i) There are Agency Commitments in amounts and with
characteristics (including coupon, maturity and type
of underlying Mortgage Loans and availability in
light of the Seller's other agreements) sufficient to
permit the issuance of Agency Securities with respect
to all such Mortgage Loans; and
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(ii) the Seller has delivered to the Buyer fully executed
(including facsimile copies of counterparts with
originals to follow by overnight delivery service)
Assignment of Trade Letters with respect to Takeout
Commitments with characteristics (including coupon,
maturity and types of Agency Security) sufficient to
permit the sale of all Agency Securities to be issued
in respect of all such Mortgage Loans for an
aggregate purchase price no less than the aggregate
Purchase Price for such Mortgage Loans.
(b) Notwithstanding anything in the Master Repurchase Agreement to
the contrary, absent the express consent of the Buyer,
Mortgage Loans are the only Securities which the Seller may
sell to the Buyer under the Agreement.
(c) Prior to the payment by the Buyer of the Purchase Price on the
Purchase Date for a Transaction and contemporaneously with the
delivery by the Seller of the Confirmation and Funding Request
with respect to such Transaction, the Seller shall deliver to
the Buyer or its agent the Required Mortgage Documents with
respect to each Mortgage Loan to be included in such
Transaction.
(d) The delivery to the Buyer of an Assignment of Trade Letter
shall constitute the absolute assignment and irrevocable
transfer by the Seller to the Buyer of all right, title and
interest of the Seller under the Takeout Commitment described
therein and shall also constitute the representation and
warranty of the Seller that (i) such Takeout Commitment is in
full force and effect and is not subject to any claim or right
of setoff in favor of the related Takeout Investor, and (ii)
the Seller has full right and title to such Takeout Commitment
and full right to irrevocably assign and absolutely transfer
its interest therein to the Buyer.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Each party represents and warrants, and shall on and as of the
Purchase Date of each Transaction be deemed to represent and
warrant, as follows:
(i) The execution, delivery and performance of the
Agreement and the performance of each Transaction do
not and will not result in or require the creation of
any lien, security interest or other charge or
encumbrance (other than pursuant hereto) upon or with
respect to any of its properties; and
(ii) The Agreement is, and each Transaction when entered
into under the Agreement will be, a legal, valid and
binding obligation of it enforceable against it in
accordance with the terms of the Agreement, subject
to applicable bankruptcy, insolvency and similar laws
affecting creditors'
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rights generally and subject, as to enforceability,
to general principles of equity (regardless of
whether enforcement is sought in a proceeding in
equity or at law).
(b) Seller represents and warrants, and shall on and as of the
Purchase Date of each Transaction be deemed to represent and
warrant, as follows:
(i) The consummation of the Transaction as contemplated
herein will not violate any applicable policy,
regulation or guideline of the FHA or VA or result in
the voiding or reduction of the FHA insurance, VA
guarantee or any other insurance or guarantee in
respect of any Mortgage Loan, and such insurance or
guarantee is in full force and effect or shall be in
full force and effect as required by the applicable
GNMA Guide, FNMA Guide or FHLMC Guide;
(ii) Seller is a GNMA-approved issuer, a GNMA-approved
servicer, a FHA-approved mortgagee, a VA- approved
lender, a FNMA-approved issuer, a FNMA-approved
servicer and/or a FHLMC-approved seller/servicer in
good standing, as applicable, and is in good standing
with the California Public Employees' Retirement
System, each Private Takeout Investor and each
Housing Authority Takeout Investor for whom such
concept is applicable (collectively for the Agencies
and the other Takeout Investors, the "Approvals");
(iii) Seller is servicing each Mortgage Loan in strict
conformity with the servicing standards described in
the provisions of Paragraph 16 of these Supplemental
Terms;
(iv) Each Mortgage Loan which is not a Housing Authority
Mortgage Loan which has been or, pursuant to such
Transaction, is to be, sold to the Buyer under the
Agreement and has not been repurchased by the Seller
is Covered;
(v) There exists for each Housing Authority Mortgage Loan
a valid, binding and enforceable commitment to the
Seller from the Housing Authority which administers
the program pursuant to which such Housing Authority
Mortgage Loan was originated to purchase Agency
Securities to be backed by such Housing Authority
Mortgage Loan;
(vi) Each and every document, certificate, instrument,
insurance policy, escrow and any other item relating
to a Mortgage Loan necessary to satisfy the final
delivery requirements of FHLMC, FNMA or GNMA as
required by the FHLMC Guide, the FNMA Guide or the
GNMA Guide, as applicable, for the issuance of the
related Agency Security are in form
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and substance acceptable to FHLMC, FNMA or GNMA, as
appropriate, and have either been delivered to the
Buyer or its agent or are held by the Seller in trust
for the Buyer;
(vii) Any Agency Commitment relied upon by the Seller for
purposes of determining Coverage remains in full
force and effect;
(viii) The Takeout Commitments and Assignments of Trade
Letters relevant to the Agreement are each the legal,
valid and binding obligation of the Seller
enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency and
similar laws affecting creditors, rights generally
and subject, as to enforceability, to general
principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law);
(ix) Each Takeout Commitment assigned by Seller to the
Buyer pursuant to Paragraph 8(d) of these
Supplemental Terms and each Assignment of Trade
Letter delivered to the Buyer pursuant to the
Agreement is enforceable by the Buyer against the
related Takeout Investor; and
(x) Each Mortgage Loan that is the subject of such
Transaction is owned by the Seller free and clear of
any security interest or lien (or will be, upon
payment by the Buyer of the Warehouse Release
Purchase Price with respect thereto in accordance
with the terms set forth in any Warehouse Lender's
Release Letter accompanying the Required Mortgage
Documents for such Mortgage Loans).
(c) Seller covenants with the Buyer as follows:
(i) Seller shall immediately notify the Buyer by
telephone and in writing if any Approvals are
withdrawn or modified or threatened to be withdrawn
or modified or suspended;
(ii) [Intentionally Omitted];
(iii) Seller shall be, simultaneously with the payment of
the Purchase Price by the Buyer on the Purchase Date,
the legal and beneficial owner of such Purchased
Securities (and of any related Takeout Commitments)
free and clear of any lien, security interest, option
or encumbrance except for the security interest
created by the Agreement;
(iv) Seller shall service the Mortgage Loans in strict
conformity with the servicing standards described in
the provisions of Paragraph 16 of these Supplemental
Terms; and
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(v) Seller shall pay the legal fees and expenses of Akin,
Gump, Strauss, Xxxxx and Xxxx, L.L.P., counsel to the
Buyer, in connection with the negotiation,
preparation and execution of the Agreement, upon the
execution and delivery thereof, such fees and
expenses to be in the amount of $25,000.
10. EVENTS OF DEFAULT.
(a) The term "Event of Default" shall, in addition to the
definition set forth in the Master Repurchase Agreement,
including the following events:
(i) Any governmental or self-regulatory authority shall
take possession of the Buyer or Seller or all or
substantially all its property or appoint any
trustee, receiver, conservator or other official, or
the Buyer or Seller shall take any action to
authorize any of the actions set forth in this clause
(i).
(ii) The Buyer or Seller shall have reasonably determined
that the other party is or will be unable to meet its
commitments under the Agreement, shall have notified
such other party of such determination and such other
party shall not have responded with appropriate
information to the contrary to the satisfaction of
the notifying party within forty-eight (48) hours.
(iii) A final judgment by any competent court in the United
States of America for the payment of money in an
amount of at least $500,000 is rendered against the
defaulting party, and the same remains undischarged
or unpaid for a period of 60 days during which
execution of such judgment is not effectively stayed.
(iv) The Agreement shall for any reason cease to create a
valid first priority security interest in any of the
Purchased Securities (and Takeout Commitments)
purported to be covered thereby; provided, however,
that such circumstance shall not constitute an Event
of Default if, after determining the Market Value of
the Mortgage Loans without taking into account the
Mortgage Loans with respect to which such
circumstance has occurred, no other Event of Default
shall have occurred and be continuing.
(v) Any representation or warranty made by Seller in the
Agreement shall have been incorrect or untrue in any
material respect when made or repeated or when deemed
to have been made or repeated and the Buyer's
interests shall have been materially adversely
affected thereby as determined by the Buyer in its
reasonable discretion.
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(vi) Seller shall breach any covenant in the Agreement and
the Buyer's interests shall have been materially
adversely affected thereby as determined by the Buyer
in its reasonable discretion.
(vii) An Act of Insolvency shall occur with respect to a
controlling entity of Seller.
(viii) Any Approvals of Seller are modified or revoked and
the Buyer's interests shall have been materially
adversely affected thereby as determined by the Buyer
in its reasonable discretion.
(b) In addition to the other remedies available to the Buyer or
Seller upon the occurrence and during the continuance of an
Event of Default by the other party, the Buyer shall have the
following additional remedies upon the occurrence and during
the continuance of an Event of Default by Seller:
(i) All rights of Seller to receive payments which it
would otherwise be authorized to receive pursuant to
Paragraph 5 of these Supplemental Terms shall cease,
and all such rights shall thereupon become vested in
the Buyer, which shall thereupon have the sole right
to receive such payments and apply them to the
aggregate unpaid Repurchase Prices owed by Seller.
(ii) The Buyer in its sole discretion may terminate the
Seller as the servicer of the Mortgage Loans with
respect to which the Seller is the servicer without
the payment of any termination fee, penalty or
compensation to Seller and all rights of Seller to
receive servicing fees shall cease, and all such
rights shall thereupon become vested in the Buyer or
its designee, which shall thereupon have the sole
right to receive such payments and apply them to the
aggregate of the unpaid Repurchase Prices owed by
Seller; Seller shall deliver all documents with
respect to such Mortgage Loans and any related Agency
Securities as the Buyer shall in its sole discretion
direct.
(iii) All payments that are received by Seller contrary to
the provisions of the preceding clauses shall be
received in trust for the benefit of the Buyer and
shall be segregated from other funds of Seller.
(c) Any sale of Purchased Securities under Paragraph 11 of the
Master Repurchase Agreement shall be conducted in a
commercially reasonable manner, and in connection therewith,
the Seller agrees that the sale of any Purchased Securities
pursuant to a Takeout Commitment assigned and transferred to
the Buyer by the Seller pursuant to Paragraph 8(d) of these
Supplemental Terms shall constitute a sale conducted in a
commercially reasonable manner.
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(d) Expenses incurred in connection with an Event of Default shall
include without limitation those costs and expenses (including
reasonable legal fees) incurred by the nondefaulting party as
a result of the early termination of any repurchase agreement
or reverse repurchase agreement entered into by the
nondefaulting party in connection with the Transaction then in
default.
11. ADDITIONAL EVENTS OF TERMINATION. At the option of the Buyer,
exercised by written notice to Seller, the Repurchase Date for any or
all Transactions under the Agreement shall be deemed to immediately
occur in the event that:
(a) In the reasonable judgment of the Buyer a material adverse
change shall have occurred in the business, operations,
properties, prospects or condition (financial or otherwise) of
Seller after the date of the Agreement;
(b) The Buyer shall request written assurances satisfactory to the
Buyer in its sole discretion as to the financial well-being of
Seller and such assurances shall not have been provided within
seventy-two (72) hours of Seller's receipt of such request;
(c) Seller shall be in default with respect to any covenants under
any material contract or agreement to which it is a party
which default results in acceleration of the obligations of
Seller under such contract or agreement by any other party
thereto; or
(d) Seller shall consolidate with or merge into any other entity
or convey or transfer its properties and assets substantially
as an entirety to any entity unless the surviving or resulting
entity shall be acceptable to the Buyer in its sole discretion
and such entity expressly assumes by written agreement,
executed and delivered to the Buyer in form and substance
satisfactory to the Buyer, the performance of all of Seller's
duties and obligations under the Agreement.
The acceleration of the Repurchase Date as provided in this Paragraph
11 shall be in addition to any other rights of the parties to cause
such an acceleration under the Agreement. No failure on the part of
the Buyer to exercise, and no delay in exercising any right hereunder,
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right or waiver of any right hereunder preclude any
other or further exercise thereof or the exercise of any other right.
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12. FINANCIAL STATEMENTS.
(a) The Seller shall provide the Buyer copies of such financial
information regarding the Seller as is reasonably available
and as the Buyer may reasonably request.
(b) Seller shall provide the Buyer as and when available, at the
expense of Seller and upon request of the Buyer, with any and
all press releases, announcements and public filings,
including but not limited to public filings with the
Securities and Exchange Commission.
13. REPURCHASE PRICE; METHOD OF PAYMENTS. The Price Differential shall be
payable in arrears with respect to each Transaction involving Mortgage
Loans, together with the Purchase Price therefor, on the Repurchase
Date for the related Transaction or as may be otherwise mutually
agreed upon by the parties and as specified in the related
Confirmation and Funding Request. Payment of the Repurchase Price and
all other amounts owing to the Buyer under the Agreement shall be made
by wire transfer in immediately available funds. Payment of the
Purchase Price and all other amounts owing to the Seller under the
Agreement shall be made by wire transfer in immediately available
funds.
14. ADDITIONAL INFORMATION. Seller shall provide the Buyer, from time to
time at Seller's expense, with such information of a financial or
operational nature as the Buyer may reasonably request promptly upon
receipt of such request. The Buyer and its permitted assigns (and its
attorneys, auditors and agents when requested by the Buyer) shall have
the right, upon reasonable prior written notice to the Seller, to
visit the offices of the Seller and to discuss the affairs, finances
and accounts of the Seller with, and to be advised as to the same by,
its officers and to examine the books of account and records of the
Seller pertaining to each Mortgage Loan that is the subject of any
Transaction, and to make or be provided with copies and extracts
therefrom, and, upon reasonable notice, to discuss the affairs,
finances and accounts of the Seller with, and to be advised as to the
same by, the independent accountants of the Seller (and by this
provision Seller authorizes such accountants to discuss such affairs,
finances and accounts, whether or not a representative of the Seller
is present), all at such reasonable times and intervals and to such
reasonable extent as the Buyer may desire. Such inspection shall
occur upon the request of the Buyer at a mutually agreeable location
during regular business hours and on a date not more than two (2)
business days after the date of such request. The Seller will pay the
reasonable out-of-pocket expenses of the Buyer exercising its rights
pursuant to this Paragraph 14.
15. MARGIN MAINTENANCE. Paragraph 4(a) of the Master Repurchase Agreement
is hereby modified to provide that if the notice to be given by the
Buyer to Seller under such paragraph is given at or prior to 10:00
a.m. on a business day, Seller shall transfer the cash or Additional
Purchased Securities to the Buyer prior to the close of business
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in Dallas, Texas on the date of such notice, and if such notice is
given after 10:00 a.m. Seller shall transfer the cash or Additional
Purchased Securities prior to the close of business in Dallas, Texas
on the business day following the date of such notice.
16. SERVICING ARRANGEMENTS. With respect to any Mortgage Loan purchased
by the Buyer hereunder for which the Seller acted as servicer at the
time of such purchase:
(a) The parties hereto agree and acknowledge that, notwithstanding
the purchase and sale of the Mortgage Loans contemplated
hereby, Seller shall, prior to the repurchase of such Mortgage
Loans, continue to service the Mortgage Loans for the benefit
of the Buyer and, if the Buyer shall exercise its rights to
sell the Mortgage Loans pursuant to the Agreement, the Buyer's
assigns;
(b) Seller shall service and administer the Mortgage Loans in
accordance with prudent mortgage loan servicing standards and
procedures generally accepted in the mortgage banking industry
and in any event in accordance with standards and procedures
no less protective of the interests of the owner of the
Mortgage Loans than it follows with respect to its own
Mortgage Loans; provided, however, that Seller shall at all
times comply with applicable law and FHA regulations and VA
regulations so that the FHA insurance, VA guarantee or any
other applicable insurance or guarantee in respect of any
Mortgage Loan is not impaired, voided or reduced and Seller
shall at all times maintain accurate and complete records of
its servicing of the Mortgage Loans;
(c) Seller shall provide the Buyer and its permitted assigns with
periodic reports concerning the Mortgage Loans with such
frequency and containing such information as the Buyer or its
permitted assigns may reasonably request; and
(d) Any Mortgage Loans purchased by the Buyer pursuant to the
Agreement shall be purchased "servicing released" and the
Buyer shall, in connection with the exercise of its rights to
sell the Mortgage Loans in exercise of its remedies under the
Agreement, have the option to sell the Mortgage Loans on a
servicing released basis without the payment of any
termination fee, penalty or compensation to Seller.
17. FURTHER ASSURANCES. At any time and from time to time at the request
of the Buyer, and without further consideration, the Seller will
execute and deliver, or cause the execution and delivery of, such
other instruments of sale, transfer, conveyance, assignment and
confirmation and take or cause to be taken such other action as the
Buyer may reasonably deem necessary or desirable in order to effect
the purposes of the Agreement.
18. THE BUYER AS ATTORNEY-IN-FACT. The Buyer is hereby appointed to act
after the occurrence and during the continuation of an Event of
Default as the attorney-in-fact
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21
of Seller for the purpose of carrying out the provisions of the
Agreement and taking any action and executing any instruments that the
Buyer may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the
foregoing, the Buyer and its assigns shall have the right and power
after the occurrence and during the continuation of any Event of
Default to receive, endorse and collect all checks made payable to the
order of Seller representing any payment on account of the principal
of or interest on any of the Purchased Securities and to give full
discharge for the same.
19. NOTICES. All notices and other communications provided for under the
Agreement shall be in writing (including telegraphic, facsimile or
telex communication), and such notices and other communications shall,
when mailed, telegraphed, communicated by facsimile transmission or
telexed, be effective when received at the address for notices for the
party to whom such notices or communications are to be given;
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, and provided
further, however, that all financial statements delivered shall be
hand-delivered or sent by first-class mail.
20. COUNTERPARTS. The Agreement may be executed in any number of
counterparts, each of which counterpart shall be deemed to be an
original, and such counterparts shall constitute but one and the same
instrument.
21. INCORPORATION OF TERMS. The Master Repurchase Agreement as
supplemented hereby shall be read, taken and construed as one and the
same instrument.
22. BINDING EFFECT; ASSIGNABILITY. The Agreement shall be binding upon
and inure to the benefit of the Buyer and the Seller and their
respective successors and assigns; provided, however, that the Seller
shall not have the right to assign its rights hereunder or any
interest herein (by operation of law or otherwise) without the prior
written consent of the Buyer, provided that in connection with any
such assignment the assignee shall expressly agree in writing to
assume all the obligations of the Seller hereunder.
23. MAXIMUM PURCHASE PRICE; PURCHASE AND REPURCHASE DATES.
Notwith-standing anything to the contrary in the Agreement or any
Confirmation, (a) the maximum Purchase Price to be paid by the Buyer
on the Purchase Date relevant to any Mortgage Loan which is not a
Housing Authority Mortgage Loan shall be ninety-eight percent (98%) of
the principal amount thereof, (b) the maximum Purchase Price to be
paid by the Buyer on the Purchase Date relevant to any Mortgage Loan
which is a Housing Authority Mortgage Loan shall be eighty-five
percent (85%) of the principal amount thereof, (c) the maximum
aggregate Purchase Price at any time shall not exceed EIGHTY MILLION
DOLLARS ($80,000,000), (d) the Purchase Date for any
I-15
22
Transaction shall be on or before September 29, 1995, and (e) the
Repurchase Date for any Transaction shall be on or before October 2,
1995.
24. USURY SAVINGS. The parties intend to comply with any applicable usury
law. Accordingly, in the event, for any reason, any Transaction is
construed by any court as a secured loan rather than a purchase and
sale, in no event shall the rate of interest contracted for, charged
or received for the use, forbearance or detention of money under the
Agreement exceed the highest rate permitted by law. If any
construction of the Agreement indicates a different right given to the
Buyer to ask for or receive any larger sum as interest, such is a
mistake in calculation or wording which this clause shall override and
control, it being the intention of the parties that the Agreement
shall in all things comply with applicable law and proper adjustments
shall automatically be made accordingly. In the event that the Buyer
shall ever receive, collect or apply as interest, any sum in excess of
the maximum nonusurious rate permitted by applicable law (the "Maximum
Rate"), if any, such excess amount shall be applied to the reduction
of the unpaid principal balance of any indebtedness owed to the Buyer
under the Agreement, and if the same be paid in full, any remaining
excess shall be paid to the Seller. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the
Maximum Rate, if any, the Seller and the Buyer shall, to the maximum
extent permitted under applicable law: (a) characterize any
nonprincipal payment as an expense or fee rather than as interest, (b)
exclude voluntary prepayments and the effects thereof, and (c)
"spread" the total amount of interest throughout the entire term of
the Agreement. To the extent that TEX. REV. CIV. STAT. XXX. art
5069-1.04, as amended (the "Act"), is relevant for purposes of
determining the Maximum Rate, such rate shall be determined under the
Act pursuant to the "indicated rate ceiling", from time to time in
effect, as referred to and defined in article 1.04(a)(1) of the Act;
subject, however, to the limitations on such applicable ceiling
referred to and defined in article 1.04(b)(2) of the Act, and further
subject to any right the Buyer may have subsequently, under applicable
law, to change the method of determining the Maximum Rate.
25. Governing Law; Jurisdictional Matters. The Agreement shall be
governed by and interpreted in accordance with the laws of the State
of Texas. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF STATE OF TEXAS,
OR THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF TEXAS,
AND, BY EXECUTION AND DELIVERY OF THE AGREEMENT, THE PARTIES HEREBY
ACCEPT FOR THEMSELVES AND IN RESPECT OF THEIR PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE
PARTIES HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS. THIS SUBMISSION
TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE THE BUYER FROM
OBTAINING JURISDICTION OVER THE SELLER IN ANY COURT OTHERWISE HAVING
JURISDICTION.
X-00
00
00. WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY (A) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THE AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN, (B) CERTIFY THAT NO PARTY HERETO NOR
ANY REPRESENTATIVE OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (C)
ACKNOWLEDGE THAT IT ENTERED INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY BASED UPON AMONG OTHER THINGS THE MUTUAL WAIVERS
AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH.
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24
EXHIBIT A
CONFIRMATION
UNDER
MASTER REPURCHASE AGREEMENT
DATED AS OF SEPTEMBER 19, 1995
BETWEEN BUYER AND SELLER
Buyer: First Nationwide Mortgage Corporation
C/O First Nationwide Bank
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention:
Seller: Lomas Mortgage USA, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention:
Purchased Securities: Mortgage Loans under the Master Repurchase Agreement
dated as of September 19, 1995, between Buyer and
Seller (capitalized terms used and not otherwise
defined in this Confirmation have the meanings
specified in such Master Repurchase Agreement,
including the Supplemental Terms attached thereto).
The Mortgage Loans offered for sale to the Buyer
hereby include any notes which evidence such Mortgage
Loans, all other Required Mortgage Documents with
respect to such Mortgage Loans, and all other
documents which secure, or otherwise relate to, such
Mortgage Loans (to the extent not delivered to the
Buyer or its agent contemporaneously herewith, all
such notes, Required Mortgaged Documents and other
documents are held by the Seller in trust for the
benefit of the Buyer and will be delivered to the
Buyer upon request).
CHECK THE APPLICABLE BOX AND COMPLETE THE BLANKS:
[ ] The Mortgage Loans are not Housing Authority Mortgage Loans
[ ] The Mortgage Loans are Housing Authority Mortgage Loans
Aggregate Principal
Balance of Number of
Mortgage Loans: _________________ Mortgage Loans: _________________
X-0
00
Xxxxxxxx Date: __________________ (Not later than September 29, 1995)
Repurchase Date: __________________ (Not later than October 2, 1995)
Purchase Price: 98% if not Housing Authority Mortgage Loans
85% if Housing Authority Mortgage Loans
Pricing Rate: Prime Rate
Percentage used
to determine
Buyer's Margin
Amount: 93% if not Housing Authority Mortgage Loans
80% if Housing Authority Mortgage Loans
Percentage used
to determine
Seller's Margin
Amount: X.X.
XXXXX MORTGAGE USA, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
AGREED AND ACCEPTED
FIRST NATIONWIDE MORTGAGE
CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
Attachment: Schedule of Mortgage Loans covered hereby
A-2
26
SCHEDULE I TO
CONFIRMATION DATED: _______________
UNDER
MASTER REPURCHASE AGREEMENT
DATED AS OF SEPTEMBER 19, 1995
BETWEEN FIRST NATIONWIDE MORTGAGE CORPORATION
AND LOMAS MORTGAGE USA, INC.
Page 1 of ___
Loan # Borrower Loan Principal Interest Loan Product Date of Purchase
Name Amount Balance Rate Type Code Loan Price
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Grand Totals
------------------------------------------------------------------------------------------------------------
A-3
27
EXHIBIT B
ASSIGNMENT OF TRADE LETTER
[See attached]
B-1
28
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ASSIGNMENT OF TRADE LETTER
LOMEGA
Securities Dealer/Buyer Securities, Inc.
Trade Reference: 8675309
Trade Date: Oct. 1, 1994
Security: 30 Yr. GNMA 1
Coupon: 9.00%
Trade Amount: $1,000,000
Amounts Assigned: 1,000,000
Settlement Date: Nov. 12, 1994
Trade Price: 100-02/32s
Special Instructions: ___________________
Seller: Lomas Mortgage USA, Inc.
Lender's Trade Reference: EV26809
Dear Sirs:
Regarding the above referenced trade the ("Commitment"), this is to
confirm that (i) the Commitment is in full force and effect, (ii) the
Commitment has been assigned to First Nationwide Mortgage Corp ("First
Nationwide") whose acceptance of such (the "Assignment") is indicated below,
(iii) First Nationwide is obligated to deliver securities to the Securities
Dealer named above ("Buyer") in accordance with the Commitment, and (iv) Buyer
will accept delivery of said securities from and return funds to First
Nationwide in accordance with the Commitment.
Buyer agrees that upon acceptance of the Assignment, Buyer will
release Lomas ("Seller") from any and all obligations in connection with the
Commitment. In the event either Buyer or First Nationwide fails to perform or
in any way defaults on the terms of the Commitment, the non-defaulting party
will have full, undiluted rights of recourse and recovery as provided for in
the Commitment.
The above notwithstanding, if Buyer fails to accept the Assignment,
First Nationwide will have no obligations to Buyer or Seller regarding the
Commitment.
Please execute the Agreement in the space provided below and return by
facsimile to First Nationwide at (000) 000-0000, ATTN: Xxxx Xxx. Any questions
regarding this Assignment may be directed to Xx. Xxx at (000) 000-0000.
Sincerely,
Seller: Lomas Mortgage USA, Inc.
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
Agreed to:
First Nationwide Mortgage Corp Buyer:
By:_____________________________ By:_____________________________
Name:___________________________ Name:___________________________
Title:__________________________ Title:__________________________
Date:___________________________ Date:___________________________
Page 1 of 1
29
ANNEX II
NOTICES AND OTHER COMMUNICATIONS
IF TO SELLER:
Name: Xxxxx X. Xxxxxxx Address: Lomas Mortgage USA, Inc.
Title: General Counsel 0000 Xxxxxxx Xxxxx
Telephone: 000-000-0000 Xxxxxx, Xxxxx 00000-0000
Facsimile: 000-000-0000
IF TO BUYER:
Name: Xxxxxxxx X. Xxxxxxxx Address: First Nationwide Mortgage Corporation
Title: General Counsel 000 Xxxxxxxx Xxxxx, Xxxxx 0000
Telephone: 000-000-0000 Xxxxxx, Xxxxx 00000
Facsimile: 000-000-0000
