EXECUTION VERSION
================================================================================
MASTER REPURCHASE AGREEMENT
Between:
XXXXXXX XXXXX BANK USA, AS BUYER
and
MORTGAGEIT, INC., AS SELLER
and
MORTGAGEIT HOLDINGS, INC., AS SELLER
and
MHL FUNDING CORP., AS SELLER
and
NEXT AT BAT LENDING, INC., AS SELLER
Dated as of June 8, 2005
================================================================================
TABLE OF CONTENTS
Page
----
Section 1. APPLICABILITY...................................................1
Section 2. DEFINITIONS.....................................................1
Section 3. INITIATION; TERMINATION........................................23
Section 4. MARGIN AMOUNT MAINTENANCE......................................28
Section 5. INCOME PAYMENTS................................................29
Section 6. REQUIREMENTS OF LAW............................................30
Section 7. TAXES..........................................................31
Section 8. SECURITY INTEREST..............................................32
Section 9. PAYMENT, TRANSFER AND CUSTODY..................................33
Section 10. HYPOTHECATION OR PLEDGE OF PURCHASED Mortgage Loan.............33
Section 11. REPRESENTATIONS................................................34
Section 12. COVENANTS......................................................39
Section 13. EVENTS OF DEFAULT..............................................46
Section 14. REMEDIES.......................................................50
Section 15. INDEMNIFICATION AND EXPENSES; RECOURSE.........................53
Section 16. Servicing......................................................54
Section 17. SINGLE AGREEMENT...............................................55
Section 18. Set-off........................................................56
-i-
Section 19. NOTICES AND OTHER COMMUNICATIONS...............................56
Section 20. ENTIRE AGREEMENT; SEVERABILITY.................................56
Section 21. NON-ASSIGNABILITY..............................................56
Section 22. TERMINABILITY..................................................58
Section 23. GOVERNING LAW..................................................58
Section 24. Submission To Jurisdiction; Waivers............................58
Section 25. NO WAIVERS, ETC................................................59
Section 26. RESERVED.......................................................59
Section 27. DUE DILIGENCE..................................................59
Section 28. Commitment fee.................................................60
Section 29. reserved.......................................................60
Section 30. BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT........................60
Section 31. MISCELLANEOUS..................................................61
Section 32. CONFIDENTIALITY................................................62
Section 33. Intent.........................................................63
Section 34. Disclosure Relating to Certain Federal Protections.............63
Section 35. CONFLICTS......................................................64
Section 36. AUTHORIZATIONS.................................................64
Section 37. ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES.............64
-ii-
EXHIBITS
--------
SCHEDULE 1 Representations and Warranties Re: Mortgage Loans
SCHEDULE 2 Existing Indebtedness
EXHIBIT I Form of Confirmation Letter
EXHIBIT II Form of Opinion Letter
EXHIBIT III UCC Filing Jurisdiction
EXHIBIT IV Form of Collection Account Control Agreement
EXHIBIT V Mortgage Loan Schedule Fields
EXHIBIT VI Mortgage File Documents
EXHIBIT VII Reserved
EXHIBIT VIII Form of Seller's Officer's Certificate
EXHIBIT IX Form of Servicer Notice
EXHIBIT X Authorized Representatives
EXHIBIT XI Responsible Officers
EXHIBIT XII Co-op Loan Mortgage File
-iii-
MASTER REPURCHASE AGREEMENT
This is a MASTER REPURCHASE AGREEMENT, dated as of June 8,
2005 (this "Agreement"), among MORTGAGEIT, INC., a New York corporation
("MortgageIT" and a "Seller"), MORTGAGEIT HOLDINGS, INC., a Maryland corporation
("Holdings" and a "Seller"), MHL FUNDING CORP., a Delaware corporation ("MHL"
and a "Seller"), NEXT AT BAT LENDING, INC., a Delaware corporation ("NABL" and
collectively with MortgageIT, Holdings, and MHL the "Sellers") and XXXXXXX XXXXX
BANK USA, a Utah industrial loan corporation ("Buyer").
SECTION 1. APPLICABILITY
From time to time the parties hereto shall enter into
transactions in which the Sellers agree to transfer to Buyer, Mortgage Loans
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer
to transfer to the Sellers such Mortgage Loans at a date certain not later than
the date 364 days after the related Purchase Date, against the transfer of funds
by the Sellers. Each such transaction shall be referred to herein as a
"Transaction" and shall be governed by this Repurchase Agreement, unless
otherwise agreed in writing. This Repurchase Agreement is a commitment by Buyer
to engage in the Transactions as set forth herein up to the Maximum Committed
Purchase Price; provided, that the Buyer shall have no commitment to enter into
any Transaction requested which would result in the aggregate Purchase Price of
then outstanding Transactions to exceed the Maximum Committed Purchase Price.
SECTION 2. DEFINITIONS
As used herein, the following terms shall have the following meanings (all terms
defined in this Section 2 or in other provisions of this Repurchase Agreement in
the singular to have the same meanings when used in the plural and vice versa)
"Accepted Servicing Practices" shall mean, with respect to any
Mortgage Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.
"Account Agreement" shall mean a letter agreement between the
Sellers, the Buyer, and a depository institution acceptable to Buyer in its sole
discretion substantially in the form of Exhibit IV attached hereto.
"Additional Purchased Mortgage Loans" shall mean Mortgage
Loans or cash provided by the Sellers to Buyer or its designee pursuant to
Section 4 of this Repurchase Agreement.
"Adjusted Indebtedness" shall mean, for any Person,
Indebtedness less only those obligations created, issued or incurred by such
Person for borrowed money by the issuance and sale of debt securities that are
sponsored, created, issued or incurred by such Person or its Affiliates in
connection with securitizations.
"Affiliate" shall mean with respect to any Person, any
"affiliate" of such Person, as such term is defined in the Bankruptcy Code.
"Aged Mortgage Loan" shall mean a Mortgage Loan that has been
subject to a Transaction hereunder for period of greater than 120 days but no
longer than 180 days.
"Agency" shall mean Xxxxxxx Mac, Xxxxxx Xxx or Xxxxxx Xxx, as
applicable.
"Agency Takeout Commitment" shall mean a commitment by an
Agency to purchase the Mortgage Loan under any of its cash purchase programs.
"Appraised Value" shall mean the value set forth in an
appraisal made in connection with the origination of the related Mortgage Loan
as the value of the Mortgaged Property.
"Asset Value" shall mean with respect to each Eligible
Mortgage Loan, the applicable Purchase Price Percentage for the related
Purchased Mortgage Loan multiplied by the lesser of (a) the Market Value of such
Mortgage Loan and (b) the outstanding principal balance of such Mortgage Loan.
"Assignment of Lease Agreement" shall mean the specific
agreement creating a first lien on and pledge of the Co-op Shares and the
appurtenant Proprietary Lease securing a Co-op Loan.
"Assignment of Proprietary Lease" shall mean, with respect to
a Co-op Loan, an assignment of the Proprietary Lease sufficient under the laws
of the jurisdiction wherein the related Co-op Unit is located to reflect the
assignment of such Proprietary Lease.
"Authorized Representative" shall mean, for the purposes of
this Repurchase Agreement only, an agent or Responsible Officer of the Sellers
listed on Exhibit X hereto, as such Exhibit X may be amended from time to time
by the Sellers providing written notice to the Buyer.
"Available Amount" shall mean, as of any date of
determination, an amount equal to the Maximum Purchase Price minus the aggregate
purchase price of the purchased mortgage loans under the MLMCI Facility on such
date.
"Bailee Letter" shall have the meaning assigned to such term
in the Custodial Agreement.
"Bankruptcy Code" shall mean the United States Bankruptcy Code
of 1978, as amended from time to time.
"Business Day" shall mean a day other than (i) a Saturday or
Sunday, (ii) any day on which banking institutions are authorized or required by
law, executive order or governmental decree to be closed in the State of New
York or (iii) any day on which the New York Stock Exchange is closed or any day
on which the Federal Reserve Banks are closed.
-2-
"Buyer" shall mean Xxxxxxx Xxxxx Bank USA, and its successors
in interest and assigns.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Repurchase Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.
"Cash Equivalents" shall mean (a) securities with maturities
of 90 days or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b) certificates
of deposit and eurodollar time deposits with maturities of 90 days or less from
the date of acquisition and overnight bank deposits of Buyer or of any
commercial bank having capital and surplus in excess of $500,000,000, (c)
repurchase obligations of Buyer or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
seven days with respect to securities issued or fully guaranteed or insured by
the United States Government, (d) commercial paper of a domestic issuer rated at
least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by
Xxxxx'x and in either case maturing within 90 days after the day of acquisition,
(e) securities with maturities of 90 days or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Xxxxx'x, (f) securities with maturities of 90 days or less from the date of
acquisition backed by standby letters of credit issued by Buyer or any
commercial bank satisfying the requirements of clause (b) of this definition or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
"Change in Control" shall mean:
(a) the sale, transfer, or other disposition of all or
substantially all of a Seller's assets (excluding any such action taken in
connection with any securitization transaction); or
(b) the consummation of a merger or consolidation of a Seller
with or into another entity or any other corporate reorganization, if more than
50.1% of the combined voting power of the continuing or surviving entity's stock
outstanding immediately after such merger, consolidation or such other
reorganization is owned by persons who were not stockholders of such Seller
immediately prior to such merger, consolidation or other reorganization.
"Closed End Second Lien Mortgage Loan" shall mean a closed
end, Second Lien Mortgage Loan that (i) qualifies under the "CAL-Rural" or
"PERS" loan programs or which is otherwise underwritten in accordance with the
Underwriting Guidelines and (ii) is eligible for sale by a Seller in a
securitization transaction or to a Takeout Investor.
-3-
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collection Account" shall mean account numbers 37647, 42437,
46659 and 46658 established at Deutsche Bank National Trust Company and subject
to the Collection Account Control Agreement, into which all Income shall be
deposited after the occurrence of an Event of Default.
"Collection Account Control Agreement" shall mean that certain
Collection Account Control Agreement, dated as of the date hereof, among the
Sellers, the Buyer and Deutsche Bank National Trust Company, as the Bank, as the
same may be amended from time to time.
"Combined Loan to Value Ratio or CLTV" shall mean, with
respect to any Second Lien Mortgage Loan, the sum of (a) the original principal
balance of such Mortgage Loan or, with respect to the HELOCs, the original
Credit Limit and (b) the outstanding principal balance of any related first lien
as of the date of origination of the Mortgage Loan, divided by the Appraisal
Value of the Mortgaged Property as of the origination date.
"Commitment Fee" shall mean an amount equal to (A) (i) 0.25%
multiplied by (ii) the Maximum Committed Purchase Price, less (B) any commitment
fees previously paid by the Sellers to the Buyer for the same periods covered by
this Agreement, which total shall be due and payable to Buyer by the Sellers
pursuant to this Repurchase Agreement at the account set forth in Section 9
hereof.
"Committed Mortgage Loan" shall mean a Mortgage Loan which is
the subject of a Takeout Commitment with a Takeout Investor.
"Confirmation" shall mean a Confirmation Letter in the form of
Exhibit I hereto.
"Conforming Mortgage Loan" shall mean a first lien Mortgage
Loan that (i) conforms to the requirements of an Agency for securitization or
cash purchase and (ii) is subject to an Agency Commitment or a Takeout
Commitment, including, without limitation, conventional Mortgage Loans, FHA
Loans and VA Loans.
"Co-op" shall mean a private, cooperative housing corporation,
having only one class of stock outstanding, which owns or leases land and all or
part of a building or buildings, including apartments, spaces used for
commercial purposes and common areas therein and whose board of directors
authorizes the sale of stock and the issuance of a Proprietary Lease.
"Co-op Corporation" shall mean, with respect to any Co-op
Loan, the cooperative apartment corporation that holds legal title to the
related Co-op Project and grants occupancy rights to units therein to
stockholders through Proprietary Leases or similar arrangements.
"Co-op Lien Search" shall mean a search for (a) federal tax
liens, mechanics' liens, lis pendens, judgments of record or otherwise against
(i) the Co-op Corporation and (ii) the seller of the Co-op Unit, (b) filings
Uniform Commercial Code financing statements and (c) the deed of the Co-op
Project into the Co-op Corporation.
-4-
"Co-op Loan" shall mean a Mortgage Loan secured by the pledge
of stock allocated to a dwelling unit in a residential cooperative housing
corporation and collateral assignment of the related Proprietary Lease.
"Co-op Project" shall mean, with respect to any Co-op Loan,
all real property and improvements thereto and rights therein and thereto owned
by a Co-op Corporation including without limitation the land, separate dwelling
units and all common elements.
"Co-op Shares" shall mean, with respect to any Co-op Loan, the
shares of stock issued by a Co-op Corporation and allocated to a Co-op Unit and
represented by a stock certificates.
"Co-op Unit" shall mean, with respect to any Co-op Loan, a
specific unit in a Co-op Project.
"Credit Limit" shall mean, with respect to each HELOC, the
maximum amount permitted under the terms of the related Credit Line Agreement.
"Credit Line Agreement" shall mean, with respect to each
HELOC, the related home equity line of credit agreement, account agreement and
promissory note (if any) executed by the related mortgagor and any amendment or
modification thereof.
"Custodial Agreement" shall mean that certain Custodial
Agreement dated as of the date hereof, among the Sellers, Buyer and Custodian as
the same may be amended from time to time.
"Custodian" shall mean Deutsche Bank National Trust Company,
or any successor thereto under the Custodial Agreement.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Delinquent Mortgage Loan" shall mean any Mortgage Loan as to
which any Monthly Payment, or part thereof, remains unpaid for 60 days or more
from the original Due Date for such Monthly Payment.
"Disbursement Agent" shall mean Deutsche Bank National Trust
Company, its successor or assigns.
"Disbursement Agreement" shall mean that certain Disbursement
Agreement, dated as of the date hereof, among the Disbursement Agent, the Buyer
and the Sellers, as the same may be amended from time to time, setting forth the
terms pursuant to which the Disbursement Agent shall disburse funds related to
Wet-Ink Mortgage Loans.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Draw" shall mean, with respect to each HELOC, an additional
borrowing by the Mortgagor in accordance with the related Credit Line Agreement.
-5-
"Due Date" shall mean the day of the month on which the
Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
"Due Diligence Review" shall mean the performance by Buyer of
any or all of the reviews permitted under Section 27 hereof with respect to any
or all of the Mortgage Loans, as desired by the Buyer from time to time.
"EC Mortgage Loan" shall mean a first lien Mortgage Loan that
(i) is a prime quality Mortgage Loan underwritten in conformity to the
Underwriting Guidelines for EC Mortgage Loans and (ii) is eligible for sale to a
Takeout Investor or for securitization.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 3(a) shall have been satisfied.
"Electronic Tracking Agreement" shall mean that certain
Electronic Tracking Agreement, dated as of the date hereof, among Buyer,
Sellers, MERS and MERSCORP, Inc., as the same may be amended from time to time.
"Eligible Mortgage Loan" shall mean a Purchased Mortgage Loan
which (i) complies with the representations and warranties set forth on Schedule
1 to this Repurchase Agreement and (ii) is a Conforming Mortgage Loan, a Jumbo
Mortgage Loan, a Super Jumbo Mortgage Loan, a HELOC, an EC Mortgage Loan, a
Closed End Second Lien Mortgage Loan, a Co-op Loan or a Sub-prime Mortgage Loan.
"ERISA" shall, with respect to any Person, mean the Employee
Retirement Income Security Act of 1974, as amended from time to time and any
successor thereto, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" shall, with respect to any Person, mean any
Person which is a member of any group of organizations (i) described in Section
414(b) or (c) of the Code of which such Person is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which such Person is a member.
"Estoppel Letter" shall mean a document executed by the Co-op
Corporation certifying, with respect to a Co-op Unit, (i) the appurtenant
Proprietary Lease will be in full force and effect as of the date of issuance
thereof, (ii) the related Stock Certificate was registered in the Mortgagor's
name and the Co-op Corporation has not been notified of any lien upon, pledge
of, levy of execution on or disposition of such Stock Certificate, and (iii) the
Mortgagor is not in default under the appurtenant Proprietary Lease and all
charges due the Co-op Corporation have been paid.
"Escrow Payments" shall mean, with respect to any Mortgage
Loan, the amounts constituting ground rents, taxes, assessments, water rates,
sewer rents, municipal charges, mortgage insurance premiums, fire and hazard
insurance premiums, condominium charges, and any other payments required to be
escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other document.
-6-
"Event of Default" shall have the meaning specified in Section
13.01 hereof.
"Event of Insolvency" shall mean, for any Person:
(a) that such Person or any Material Subsidiary shall
discontinue or abandon operation of its business; or
(b) that such Person or any Material Subsidiary shall fail
generally to, or admit in writing its inability to, pay its debts as they become
due; or
(c) a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
such Person or any Material Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency, liquidation, reorganization or other similar
law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or any Material Subsidiary, or for any
substantial part of its property, or for the winding-up or liquidation of its
affairs; or
(d) the commencement by such Person or any Material Subsidiary
of a voluntary case under any applicable bankruptcy, insolvency or other similar
Law now or hereafter in effect, or such Person's or any Material Subsidiary's
consent to the entry of an order for relief in an involuntary case under any
such Law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator, conservator or other
similar official of such Person or such Material Subsidiary, or for any
substantial part of its property, or any general assignment for the benefit of
creditors; or
(e) that such Person or any Material Subsidiary shall become
insolvent; or
(f) if such Person or any Material Subsidiary is a
corporation, such Person or any Material Subsidiary shall take any corporate
action in furtherance of, or the action of which would result in any of the
actions set forth in the preceding clause (a), (b), (c), (d) or (e).
"Event of Termination" shall, with respect to any Seller, mean
(i) with respect to any Plan, a reportable event, as defined in Section 4043 of
ERISA, as to which the PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of
such event, or (ii) the withdrawal of such Seller or any ERISA Affiliate thereof
from a Plan during a plan year in which it is a substantial employer, as defined
in Section 4001(a)(2) of ERISA, or (iii) the failure by such Seller or any ERISA
Affiliate thereof to meet the minimum funding standard of Section 412 of the
Code or Section 302 of ERISA with respect to any Plan, including, without
limitation, the failure to make on or before its due date a required installment
under Section 412(m) of the Code or Section 302(e) of ERISA, or (iv) the
distribution under Section 4041 of ERISA of a notice of intent to terminate any
Plan or any action taken by such Seller or any ERISA Affiliate thereof to
terminate any Plan, or (v) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a part if
such Seller or any ERISA Affiliate thereof fails to timely provide security to
the Plan in accordance with the provisions of said Sections, or (vi) the
institution by the PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee
-7-
to administer, any Plan, or (vii) the receipt by such Seller or any ERISA
Affiliate thereof of a notice from a Multiemployer Plan that action of the type
described in the previous clause (vi) has been taken by the PBGC with respect to
such Multiemployer Plan, or (viii) any event or circumstance exists which may
reasonably be expected to constitute grounds for such Seller or any ERISA
Affiliate thereof to incur liability under Title IV of ERISA or under Sections
412(c)(11) or 412(n) of the Code with respect to any Plan.
"Excluded Taxes" shall have the meaning specified in Section 7
hereof.
"Expenses" shall mean all present and future reasonable
expenses incurred by or on behalf of the Buyer in connection with this
Repurchase Agreement or any of the other Repurchase Documents and any amendment,
supplement or other modification or waiver related hereto or thereto, whether
incurred heretofore or hereafter, which reasonable expenses shall include the
cost of title, lien, judgment and other record searches; reasonable attorneys'
fees; and costs of preparing and recording any UCC financing statements or other
filings necessary to perfect the security interest created hereby.
"Xxxxxx Xxx" shall mean Xxxxxx Mae, or any successor thereto.
"FHA" shall mean the Federal Housing Administration, an agency
within the United States Department of Housing and Urban Development, or any
successor thereto, and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
"FHA Approved Mortgagee" shall mean a corporation or
institution approved as a mortgagee by the FHA under the National Housing Act,
as amended from time to time, and applicable FHA Regulations, and eligible to
own and service mortgage loans such as the FHA Loans.
"FHA Loan" shall mean a Mortgage Loan which is the subject of
an FHA Mortgage Insurance Contract.
"FHA Mortgage Insurance" shall mean, mortgage insurance
authorized under the National Housing Act, as amended from time to time, and
provided by the FHA.
"FHA Mortgage Insurance Contract" shall mean the contractual
obligation of the FHA respecting the insurance of a Mortgage Loan.
"FHA Regulations" shall mean the regulations promulgated by
the Department of Housing and Urban Development under the National Housing Act,
as amended from time to time and codified in 24 Code of Federal Regulations, and
other Department of Housing and Urban Development issuances relating to FHA
Loans, including the related handbooks, circulars, notices and mortgagee
letters.
"Fidelity Insurance" shall mean insurance coverage with
respect to employee errors, omissions, dishonesty, forgery, theft, disappearance
and destruction, robbery and safe burglary, property (other than money and
securities) and computer fraud in an aggregate amount acceptable to Sellers'
regulators.
-8-
"Financial Statements" shall mean the consolidated financial
statements of the Sellers, prepared in accordance with GAAP for the year or
other period then ended. Such financial statements will be audited, in the case
of annual statements, by BDO Xxxxxxx LLP or such other independent certified
public accountants approved by the Buyer (which approval shall not be
unreasonably withheld).
"Financing Statement" shall mean a financing statement in the
form of a UCC-1 filed pursuant to the Uniform Commercial Code to perfect a
security interest in the Co-op Shares and Pledge Instruments.
"First Payment Default" shall mean, with respect to a Mortgage
Loan, the failure of the Mortgagor to make the first Monthly Payment due under
the Mortgage Loan on or before its scheduled Due Date.
"Fitch" shall mean Fitch Ratings, Inc., or any successor
thereto.
"Xxxxxxx Mac" shall mean Xxxxxxx Mac, or any successor
thereto.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, applied on a consistent basis and applied to both
classification of items and amounts, and shall include, without limitation, the
official interpretations thereof by the Financial Accounting Standards Board,
its predecessors and successors.
"Xxxxxx Xxx" shall mean the Government National Mortgage
Association and any successor thereto.
"Governmental Authority" shall mean any nation or the
government of any state, county, municipality or other political subdivision
thereof or any governmental body, agency, authority, department or commission
(including, without limitation, any taxing authority) or any instrumentality or
officer of any of the foregoing (including, without limitation, any court or
tribunal) exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any corporation,
partnership or other entity directly or indirectly owned by or controlled by the
foregoing.
"Guarantee" shall mean, as to any Person, any obligation of
such Person directly or indirectly guaranteeing any Indebtedness of any other
Person or in any manner providing for the payment of any Indebtedness of any
other Person or otherwise protecting the holder of such Indebtedness against
loss (whether by virtue of partnership arrangements, by agreement to keep-well,
to purchase assets, goods, securities or services, or to take-or-pay or
otherwise); provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any
Guarantee of a Person shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith. The
terms "Guarantee" and "Guaranteed" used as verbs shall have correlative
meanings.
"HELOC" shall mean a home equity revolving line of credit
secured by a mortgage, deed of trust or other instrument creating a first or
second lien on the related
-9-
Mortgaged Property, which lien secures the related Credit Line Agreement, and
which is underwritten in conformity with the Underwriting Guidelines.
"High Cost Mortgage Loan" shall mean a Mortgage Loan
classified as (a) a "high cost" loan under the Home Ownership and Equity
Protection Act of 1994 or (b) a "high cost," "threshold," "covered," or
"predatory" loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law, regulation or
ordinance imposing heightened regulatory scrutiny or additional legal liability
for residential mortgage loans having high interest rates, points and/or fees).
"HUD" shall mean the Department of Housing and Urban
Development.
"Income" shall mean, with respect to any Mortgage Loan at any
time, any principal thereof then payable and all interest, dividends or other
distributions payable thereon.
"Indebtedness" shall mean, with respect to any Person, (a)
obligations created, issued or incurred by such Person for borrowed money
(whether by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement, contingent
or otherwise, to repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed money)
arising, and accrued expenses incurred, in the ordinary course of business, so
long as such trade accounts payable are payable within 90 days of the date the
respective goods are delivered or the respective services are rendered; (c)
Indebtedness of others secured by a Lien on the Property of such Person, whether
or not the respective Indebtedness so secured has been assumed by such Person;
(d) obligations (contingent or otherwise) of such Person in respect of letters
of credit or similar instruments issued or accepted by banks and other financial
institutions for the account of such Person; (e) Capital Lease Obligations of
such Person; (f) obligations of such Person under repurchase agreements,
sale/buy-back agreements or like arrangements; (g) Indebtedness of others
Guaranteed by such Person; (h) all obligations of such Person incurred in
connection with the acquisition or carrying of fixed assets by such Person; and
(i) Indebtedness of general partnerships of which such Person is a general
partner; provided, that such amount shall not include subordinated debt that
matures more than six (6) months after the Termination Date.
"Interest Rate Protection Agreement" shall mean, with respect
to any or all of the Purchased Mortgage Loans, any short sale of a US Treasury
Security, or futures contract, or mortgage related security, or Eurodollar
futures contract, or options related contract, or interest rate swap, cap or
collar agreement or Takeout Commitment, or similar arrangement providing for
protection against fluctuations in interest rates or the exchange of nominal
interest obligations, either generally or under specific contingencies, entered
into by a Seller and a counterparty acceptable to the Buyer, having terms
acceptable to the Buyer.
"Jumbo Mortgage Loan" shall mean a first lien Mortgage Loan
with a principal balance of not more than $1,000,000 that (i) except with
respect to the original principal balance thereof, conforms to the requirements
for securitization or cash purchase by an Agency or is eligible for pool
insurance by an insurer acceptable to the Buyer, and (ii) that either (a) is
eligible
-10-
to be sold or securitized by a Seller or (b) is eligible for sale to a Takeout
Investor pursuant to a Takeout Commitment.
"Late Payment Fee" shall mean the excess of the Price
Differential paid as a result of its calculation at the Post-Default Rate over
the Price Differential as would have been calculated at the Pricing Rate.
"Law" shall mean, any law, treaty, rule or regulation or
determination of an arbitrator or court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"LIBOR Period" shall mean, with respect to each Payment Date,
the period from and including the immediately preceding Payment Date (or, with
respect to the first LIBOR Period for each Transaction, from and including the
related Purchase Date) to but excluding such Payment Date, unless otherwise
agreed to by the Buyer and such Seller and set forth in the related
Confirmation.
"LIBOR Period Commencement Date" shall mean (a) with respect
to the initial LIBOR Period with respect to a Transaction, the Purchase Date,
and (b) with respect to each succeeding LIBOR Period with respect to a
Transaction, the Payment Date, or if the LIBOR Period is other than one month,
the last day of the immediately preceding LIBOR Period.
"LIBOR Rate" shall mean, with respect to each day during the
applicable LIBOR Period, the rate per annum equal to the one month British
Bankers Association Rate as reported on the display designated as "BBAM" "Page
XX0 0x" on Bloomberg (or such other display as may replace "BBAM" "Page DG8 4a
on Bloomberg), as of 8:00 a.m., New York City time, on the date two Business
Days prior to the commencement of such LIBOR Period, and if such rate shall not
be so quoted, or if the related LIBOR Period shall be less than one month, the
rate per annum at which the Buyer or its Affiliate is offered dollar deposits at
or about 8:00 a.m., New York City time, on the date two Business Days prior to
the commencement of the such LIBOR Period, by prime banks in the interbank
eurodollar market where the eurodollar and foreign currency exchange operations
in respect of its Transactions are then being conducted for delivery on such day
for a period of one month or such other period as agreed upon in writing by the
Buyer and the Sellers and in an amount comparable to the amount of the
Transactions outstanding on such day.
"Lien" shall mean any lien, claim, charge, restriction,
pledge, security interest, mortgage, deed of trust or other encumbrance.
"Loan to Value Ratio" shall mean with respect to any Mortgage
Loan, the ratio of the original outstanding principal amount of such Mortgage
Loan to the lesser of (a) the Appraised Value of the Mortgaged Property at
origination or (b) if the Mortgage Property was purchased within 12 months of
the origination of such Mortgage Loan, the purchase price of the Mortgaged
Property.
"Margin Call" shall have the meaning specified in Section 4.
"Margin Deficit" shall have the meaning specified in Section
4.
-11-
"Market Value" shall mean, as of any date with respect to any
Purchased Mortgage Loan, the price at which such Mortgage Loan could readily be
sold as determined by the Buyer in its sole good-faith discretion. Without
limiting the generality of the foregoing, the Sellers acknowledge that the
Market Value of a Purchased Mortgage Loan may be reduced to zero by Buyer if:
(a) such Purchased Mortgage Loan ceases to be an Eligible
Mortgage Loan;
(b) the Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement (other than
to a Take-out Investor pursuant to a Bailee Letter) for a period in
excess of 10 Business Days;
(c) the Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for
which the related Mortgage File has not been received and certified by
the Custodian by the seventh Business Day following the related
Purchase Date;
(d) such Purchased Mortgage Loan is a Delinquent Mortgage
Loan;
(e) such Purchased Mortgage Loan is rejected by the related
Takeout Investor;
(f) such Purchased Mortgage Loan has been subject to a
Transaction hereunder for period of greater than 120 days, unless such
Purchased Mortgage Loan is an Aged Mortgage Loan;
(g) a First Payment Default occurs with respect to such
Purchased Mortgage Loan;
(h) the Buyer has determined in its sole good-faith discretion
that the Purchased Mortgage Loan is not eligible for whole loan sale or
securitization in a transaction consistent with the prevailing sale and
securitization industry with respect to substantially similar Mortgage
Loans;
(i) such Purchased Mortgage Loan contains a material breach of
a representation or warranty made by a Seller in this Repurchase
Agreement or the Custodial Agreement;
(j) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Aged Mortgage Loans that are Purchased Mortgage
Loans purchased hereunder and under the MLMCI Facility combined exceeds
5% of the Maximum Purchase Price;
(k) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all HELOCs that are Purchased Mortgage Loans
purchased hereunder and under the MLMCI Facility combined exceeds
$100,000,000;
-12-
(l) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all HELOCs that are Purchased Mortgage Loans
purchased hereunder and under the MLMCI Facility combined that have a
FICO score of 680 or less exceeds $35,000,000;
(m) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Closed End Second Lien Mortgage Loans that are
Purchased Mortgage Loans purchased hereunder and under the MLMCI
Facility combined exceeds 5% of the Maximum Purchase Price;
(n) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Super Jumbo Mortgage Loans that are Purchased
Mortgage Loans purchased hereunder and under the MLMCI Facility
combined exceeds 7.5% of the Maximum Purchase Price;
(o) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all EC Mortgage Loans that are Purchased Mortgage
Loans purchased hereunder and under the MLMCI Facility combined exceeds
5% of the aggregate Purchase Price of all Purchased Mortgage Loans;
(p) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Wet-Ink Mortgage Loans that are Purchased
Mortgage Loans purchased hereunder and under the MLMCI Facility
combined exceeds (i) with respect to the first five (5) Business Days
of a month and the last five (5) Business Days of a month, $275,000,000
or (ii) with respect to all other times, $200,000,000;
(q) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Sub-prime Mortgage Loans that are Purchased
Mortgage Loans purchased hereunder and under the MLMCI Facility
combined exceeds 20% of the Maximum Purchase Price;
(r) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Wet-Ink Mortgage Loans that are Sub-prime
Mortgage Loans purchased hereunder and under the MLMCI Facility
combined exceeds 4% of the Maximum Purchase Price;
(s) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Co-op Loans that are
-13-
Purchased Mortgage Loans purchased hereunder and under the MLMCI
Facility combined exceeds 5% of the aggregate Purchase Price of all
Purchased Mortgage Loans; and
(t) when the Purchase Price for such Purchased Mortgage Loan
is added to the aggregate Purchase Price of other Purchased Mortgage
Loans hereunder and under the MLMCI Facility combined, the aggregate
Purchase Price of all Thirty Day Delinquent Mortgage Loans that are
Purchased Mortgage Loans purchased hereunder and under the MLMCI
Facility combined exceeds $15,000,000.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the Property, business, operations, financial condition or prospects of
any Seller or any Material Subsidiary, (b) the ability of any Seller or any
Material Subsidiary to perform its obligations under any of the Repurchase
Documents to which it is a party, (c) the validity or enforceability of any of
the Repurchase Documents, (d) the rights and remedies of the Buyer or any
Affiliate under any of the Repurchase Documents or (e) the Market Value of the
Purchased Mortgage Loans.
"Material Subsidiary" shall mean any Subsidiary of a Seller
which accounts for more than 15% of such Seller's net income.
"Maximum Committed Purchase Price" shall mean $10,000,000. All
funds made available by Buyer to the Sellers under this Agreement will first be
attributed to the Maximum Committed Purchase Price. For purposes of this
Repurchase Agreement, Mortgage Loans will be allocated first to the Maximum
Committed Purchase Price based on the date on which such Mortgage Loan becomes
subject to this Repurchase Agreement, commencing from the earliest date to the
most recent date.
"Maximum Purchase Price" shall mean $1,000,000,000.
"MERS" shall mean Mortgage Electronic Registration Systems,
Inc., a corporation organized and existing under the laws of the State of
Delaware, or any successor thereto.
"MERS System" shall mean the system of recording transfers of
mortgages electronically maintained by MERS.
"MLMCI Facility" shall mean that certain repurchase agreement
between Xxxxxxx Xxxxx Commercial Finance Corp. ("MLCFC") and MortgageIT, dated
as of June 20, 2003, as amended from time to time, as subsequently assigned to
Xxxxxxx Xxxxx Mortgage Capital, Inc. ("MLMCI").
"Monthly Payment" shall mean the scheduled monthly payment of
principal and interest on a Mortgage Loan.
"Xxxxx'x" shall mean Xxxxx'x Investor's Service, Inc. or any
successors thereto.
-14-
"Mortgage" shall mean each mortgage, assignment of rents,
security agreement and fixture filing, or deed of trust, assignment of rents,
security agreement and fixture filing, deed to secure debt, assignment of rents,
security agreement and fixture filing, or similar instrument creating and
evidencing a first lien or second lien on (i) with respect to a Mortgage Loan
other than a Co-op Loan, real property and other property and rights incidental
thereto or (ii) with respect to a Co-op Loan, the Proprietary Lease and related
Co-op Shares.
"Mortgage File" shall mean, (i) with respect to a Mortgage
Loan other than a Co-op Loan, the documents and instruments relating to such
Mortgage Loan and set forth in Exhibit VI hereto and (ii) with respect to a
Mortgage Loan that is a Co-op Loan, the documents and instruments relating to
such Mortgage Loan and set forth in Exhibit XII.
"Mortgage Interest Rate" shall mean the rate of interest borne
on a Mortgage Loan from time to time in accordance with the terms of the related
Mortgage Note.
"Mortgage Loan" shall mean any first or second lien,
one-to-four-family residential mortgage loan, Co-op Loan or HELOC evidenced by a
Mortgage Note or Credit Line Agreement, as applicable, and secured by a
Mortgage, which Mortgage Loan is subject to a Transaction hereunder, which in no
event shall include any mortgage loan which (a) is subject to Section 226.32 of
Regulation Z or any similar state law (relating to high interest rate
credit/lending transactions), (b) includes any single premium credit life or
accident and health insurance or disability insurance, or (c) is a High Cost
Mortgage Loan.
"Mortgage Loan Schedule" shall mean with respect to any
Transaction as of any date, a mortgage loan schedule in the form of a computer
tape or other electronic medium generated by a Seller and delivered to Buyer and
the Custodian, which provides information (including, without limitation, the
information set forth on Exhibit V attached hereto) relating to the Purchased
Mortgage Loans in a format acceptable to the Buyer.
"Mortgage Loan Schedule and Exception Report" shall have the
meaning set forth in the applicable Custodial Agreement.
"Mortgage Note" shall mean the promissory note or other
evidence of the indebtedness of a Mortgagor secured by a Mortgage.
"Mortgaged Property" shall mean the real property securing
repayment of the debt evidenced by a Mortgage Note.
"Mortgagor" shall mean the obligor or obligors on a Mortgage
Note, including any Person who has assumed or guaranteed the obligations of the
obligor thereunder.
"Multiemployer Plan" shall mean, with respect to any Person, a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA which is or was
at any time during the current year or the immediately preceding five years
contributed to by such Person or any ERISA Affiliate thereof on behalf of its
employees and which is covered by Title IV of ERISA.
"Net Worth" means, with respect to any Person, an amount equal
to, on a consolidated basis, such Person's stockholder equity (determined in
accordance with GAAP).
-15-
"Non-Excluded Taxes" shall have the meaning set forth in
Section 7(a) hereof.
"Nondefaulting Party" shall have the meaning set forth in
Section 29 hereof.
"Obligations" shall mean (a) any amounts due and payable by
the Sellers to Buyer in connection with a Transaction hereunder, together with
interest thereon (including interest which would be payable as post-petition
interest in connection with any bankruptcy or similar proceeding) and all other
fees or expenses which are payable hereunder or under any of the Repurchase
Documents and (b) all other obligations or amounts due and payable by the
Sellers to the Buyer or an Affiliate of Buyer under any other contract or
agreement.
"Other Taxes" shall have the meaning set forth in Section 7(b)
hereof.
"Payment Date" shall mean the first day of each month, or if
such date is not a Business Day, the Business Day immediately preceding the
first day of the month.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Periodic Advance Repurchase Payment" shall have the meaning
specified in Section 5(a).
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, limited liability company,
trust, unincorporated association or government (or any agency, instrumentality
or political subdivision thereof).
"Plan" shall mean, with respect to any Person, any employee
benefit or similar plan that is or was at any time during the current year or
immediately preceding five years established or maintained by such Person or any
ERISA Affiliate thereof and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Pledge Instruments" shall mean, with respect to each Co-op
Loan, the Stock Power, the Assignment of the Proprietary Lease, the Assignment
of the Mortgage Note and the Assignment of Lease Agreement.
"PMI Policy" shall mean a policy of primary mortgage guaranty
insurance issued by a Qualified Insurer, as required by this Repurchase
Agreement with respect to certain Mortgage Loans.
"Post-Default Rate" shall mean a rate equal to the sum of (a)
the Pricing Rate plus (b) two percent (2.00%).
"Price Differential" shall mean, with respect to any
Transaction hereunder as of any date, the aggregate amount obtained by daily
application of the Pricing Rate (or, during the continuation of an Event of
Default, by daily application of the Post-Default 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
-16-
Transaction and ending on (but excluding) the Repurchase Date (reduced by any
amount of such Price Differential previously paid by the Sellers to Buyer with
respect to such Transaction).
"Pricing Rate" shall mean a rate per annum equal to the sum of
(a) the LIBOR Rate plus (b) the Pricing Spread.
"Pricing Spread" shall mean:
(a) with respect to Mortgage Loans other than Thirty Day
Delinquent Mortgage Loans, 0.70%; and
(b) with respect to Thirty Day Delinquent Mortgage Loans,
1.00%.
"Property" shall mean any right or interest in or to property
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Proprietary Lease" shall mean the lease on a Co-op Unit
evidencing the possessory interest of the owner of the Co-op Shares in such
Co-op unit.
"Purchase Date" shall mean the date on which Purchased
Mortgage Loans are transferred by a Seller to the Buyer or its designee.
"Purchase Price" shall mean:
(a) on the Purchase Date, the price at which each Purchased
Mortgage Loan is transferred by a Seller to Buyer which shall equal the
applicable Purchase Price Percentage multiplied by the lesser of (i) the Market
Value of such Mortgage Loan on the Purchase Date and (ii) the outstanding
principal balance of the Mortgage Loan; and
(b) thereafter, except where Buyer and the Sellers mutually
agree in writing to the contrary, such Purchase Price decreased by the amount of
any cash, Income and Periodic Advance Repurchase Payments actually received by
Buyer pursuant to Section 5 or applied to reduce the Sellers' obligations under
Section 4(b) hereof.
"Purchase Price Increase" shall mean an increase in the
Purchase Price for a HELOC based upon a Draw, as requested by Sellers pursuant
to Section 3(c) hereof.
"Purchase Price Percentage" shall mean:
(a) With respect Mortgage Loans other than Wet-Ink Mortgage
Loans, the respective percentages set forth opposite the applicable type of
Mortgage Loan:
-17-
-----------------------------------------------------------------------------
Thirty Day Delinquent Mortgage Loan................................... 85%
-----------------------------------------------------------------------------
Closed End Second Lien................................................ 95%
-----------------------------------------------------------------------------
Aged Mortgage Loan.................................................... 95%
-----------------------------------------------------------------------------
Co-op Loan............................................................ 95%
-----------------------------------------------------------------------------
HELOC................................................................. 95%
-----------------------------------------------------------------------------
Super Jumbo Mortgage Loan............................................. 97%
-----------------------------------------------------------------------------
Sub-prime Mortgage Loan............................................... 98%
-----------------------------------------------------------------------------
Conforming Mortgage Loan.............................................. 98%
-----------------------------------------------------------------------------
Jumbo Mortgage Loan................................................... 98%
-----------------------------------------------------------------------------
EC Mortgage Loan...................................................... 98%
-----------------------------------------------------------------------------
(b) With respect Mortgage Loans that are Wet-Ink Mortgage
Loans, the respective percentages set forth opposite the applicable type of
Wet-Ink Mortgage Loan:
-----------------------------------------------------------------------------
Closed End Second Lien................................................ 95%
-----------------------------------------------------------------------------
Sub-prime Mortgage Loan............................................... 97%
-----------------------------------------------------------------------------
Co-op Loan............................................................ 95%
-----------------------------------------------------------------------------
HELOC................................................................. 95%
-----------------------------------------------------------------------------
Super Jumbo Mortgage Loan............................................. 95%
-----------------------------------------------------------------------------
Conforming Mortgage Loan.............................................. 97%
-----------------------------------------------------------------------------
Jumbo Mortgage Loan................................................... 97%
-----------------------------------------------------------------------------
EC Mortgage Loan...................................................... 97%
-----------------------------------------------------------------------------
"Purchased Mortgage Loan Report" shall mean a report,
delivered with each Transaction Request, on Friday of each week (or if such date
is not a Business Day, the next preceding Business Day), or upon the request of
the Buyer, including a Mortgage Loan Schedule in the form of Exhibit V hereto,
setting forth information with respect to the Purchased Mortgage Loans (and
Mortgage Loans proposed to be the subject of a Transaction on the related
Purchase Date, if applicable).
"Purchased Mortgage Loans" shall mean the Mortgage Loans sold
by a Seller to Buyer in a Transaction, and any Additional Purchased Mortgage
Loans as evidenced by a Confirmation and a Trust Receipt, which are either (i)
listed on the related Mortgage Loan Schedule attached to the related Transaction
Request or (ii) with respect to which the related Mortgage Note is in the
possession of the Custodian, which such Mortgage Loans the Custodian has been
instructed to hold pursuant to the Custodial Agreement.
"Qualified Insurer" shall mean a mortgage guaranty insurance
company duly authorized and licensed where required by law to transact mortgage
guaranty insurance business and acceptable under the Underwriting Guidelines.
"Rating Agency" shall mean any of S&P, Xxxxx'x or Fitch.
-18-
"Recognition Agreement" shall mean, an agreement among a Co-op
Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such
parties (i) acknowledge that such lender may make, or intends to make, such
Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
"Records" shall mean all instruments, agreements and other
books, records, and reports and data generated by other media for the storage of
information maintained by any Seller or any other person or entity with respect
to a Purchased Mortgage Loan. Records shall include the Mortgage Notes, any
Mortgages, the Mortgage Files, the credit files related to the Purchased
Mortgage Loan and any other instruments necessary to document or service a
Mortgage Loan.
"Regulations T, U and X" shall mean Regulations T, U and X of
the Board of Governors of the Federal Reserve System (or any successor), as the
same may be modified and supplemented and in effect from time to time.
"REIT" shall mean a real estate investment trust, as defined
in Section 856 of the Code, as may be amended from time to time.
"Reportable Event" shall mean any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .21, .22, .24, .26, .27 or .28 of PBGC
Reg. ss. 4043.
"Repurchase Agreement" shall mean this Master Repurchase
Agreement between Buyer and the Sellers, dated as of the date hereof as the same
may be further amended, supplemented or otherwise modified in accordance with
the terms hereof.
"Repurchase Assets" shall have the meaning provided in Section
8 hereof.
"Repurchase Date" shall mean the date on which the Sellers are
to repurchase the Purchased Mortgage Loans subject to a Transaction from Buyer
as specified in the related Confirmation, or if not so specified in the related
Confirmation on a date requested pursuant to Section 3(d) or on the Termination
Date, including any date determined by application of the provisions of Sections
3 or 14, or the date identified to Buyer by the Sellers as the date that the
related Mortgage Loan is to be sold pursuant to a Take-out Commitment.
"Repurchase Documents" shall mean this Repurchase Agreement,
the Custodial Agreement, the Electronic Tracking Agreement, if applicable, a
Servicer Notice, if any, the Disbursement Agreement, the Account Agreement and
the Settlement Account Control Agreement.
"Repurchase Price" shall mean the price at which Purchased
Mortgage Loans are to be transferred from Buyer or its designee to the Sellers
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.
"Requirement of Law" shall mean as to any Person, the
certificate of incorporation and by-laws or other organizational or governing
documents of such Person, and
-19-
any law, treaty, rule, regulation, procedure or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its Property is subject.
"Responsible Officer" shall mean an officer of the applicable
Seller listed on Exhibit XI hereto, as such Exhibit XI may be amended from time
to time by such Seller providing written notice to Buyer.
"Reset Date" shall mean the last day of the related LIBOR
Period.
"S&P" shall mean Standard & Poor's Ratings Services, or any
successor thereto.
"SEC" shall mean the Securities Exchange Commission.
"Second Lien Mortgage Loan" shall mean a Mortgage Loan secured
by a second lien on the related Mortgaged Property.
"Seller" shall mean each of MortgageIT, Holdings, MHL, NABL
and/or any successor in interest thereto.
"Servicer" shall mean the MortgageIT, or any successor or
permitted assigns or other Person which serves as a sub-servicer to any Seller.
"Servicer Notice" shall mean the notice acknowledged by the
Servicer substantially in the form of Exhibit IX hereto.
"Servicing Agreement" shall mean any servicing agreement
entered into among a Seller and a Servicer, as the same may be amended from time
to time.
"Settlement Account" shall have the meaning set forth in the
Custodial Agreement.
"Settlement Account Agreement" shall mean the Settlement
Account Control Agreement entered into among the Buyer, the Sellers and the
Custodian, dated as of June 8, 2005 as the same may be amended, supplemented or
otherwise modified from time to time in accordance with its terms.
"Single-Employer Plan" shall mean a single-employer plan as
defined in Section 4001(a)(15) of ERISA which is subject to the provisions of
Title IV of ERISA.
"Stock Certificate" shall mean, with respect to a Co-op Loan,
the certificates evidencing ownership of the Co-op Shares issued by the Co-op
Corporation.
"Stock Power" shall mean, with respect to a Co-op Loan, an
assignment of the Stock Certificate or an assignment of the Co-op Shares issued
by the Co-op Corporation.
"Sub-prime Mortgage Loan" shall mean a first lien Mortgage
Loan originated in accordance with Sellers' Underwriting Guidelines for
sub-prime mortgage loans, acceptable to
-20-
Buyer in its sole discretion, that either (a) will be sold or securitized by the
Sellers or (b) is subject to a Takeout Commitment."
"Subsidiary" shall mean, 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.
"Super Jumbo Mortgage Loan" shall mean a Jumbo Mortgage Loan
with an unpaid principal balance in excess of $1,000,000 but not greater than
$2,000,000, and which is subject to a Takeout Commitment from Xxxxxxx Xxxxx
Credit Corp.
"Takeout Commitment" means a commitment of a Seller to sell
one or more Mortgage Loans to a Takeout Investor, and the corresponding Takeout
Investor's commitment back to such Seller to effectuate the foregoing.
"Takeout Investor" shall mean any institution which has made a
Takeout Commitment and has been approved by Buyer, which approval shall not be
unreasonably withheld or delayed.
"Tangible Net Worth" shall mean, for any Person, the Net Worth
of such Person determined in accordance with GAAP minus all intangible assets,
including goodwill, patents, tradenames, trademarks, copyrights, franchises, any
organizational expenses, deferred expenses, receivables from shareholders,
Affiliates or employees, and any other asset as shown as an intangible asset on
the balance sheet of such Person on a consolidated basis as determined at a
particular date in accordance with GAAP plus all subordinated debt that matures
more than six (6) months after the Termination Date.
"Taxes" shall have the meaning set forth in Section 7(a)
hereof.
"Termination Date" shall mean June 7, 2006.
"Termination Event" shall have the meaning set forth in
Section 13.02 hereof.
"Test Period" shall mean any period of three (3) consecutive
months.
"Thirty Day Delinquent Mortgage Loan" shall mean any Mortgage
Loan as to which any Monthly Payment, or part thereof, remains unpaid for at
least thirty (30) days but no more than fifty-nine (59) days from the original
Due Date for such Monthly Payment.
"Transaction" shall have the meaning specified in Section 1.
-21-
"Transaction Request" shall mean a request from a Seller to
Buyer to enter into a Transaction.
"Trust Receipt" shall have the meaning set forth in the
Custodial Agreement, and shall include any Wet-Ink Trust Receipt (as such term
is defined in the Custodial Agreement).
"Underwriting Guidelines" shall mean the underwriting
guidelines of MortgageIT which have been delivered to the Buyer on or prior to
the Effective Date of this Repurchase Agreement, as such underwriting guidelines
may be amended from time to time in conformity with the terms and conditions of
this Repurchase Agreement.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York; provided that if
by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Repurchase Assets
or the continuation, renewal or enforcement thereof is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "Uniform
Commercial Code" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
"VA" shall mean the U.S. Department of Veterans Affairs, an
agency of the United States of America, or any successor thereto including the
Secretary of Veterans Affairs.
"VA Approved Lender" shall mean a lender which is approved by
the VA to act as a lender in connection with the origination of VA Loans.
"VA Loan" shall mean a Mortgage Loan which is subject of a VA
Loan Guaranty Agreement as evidenced by a VA Loan Guaranty Agreement, or a
Mortgage Loan which is a vender loan sold by the VA.
"VA Loan Guaranty Agreement" shall mean the obligation of the
United States to pay a specific percentage of a Mortgage Loan (subject to a
maximum amount) upon default of the Mortgagor pursuant to the Servicemen's
Readjustment Act, as amended.
"Wet-Ink Funding Account" shall mean an account established in
the name of the Sellers, subject to the dominion and control of the Buyer, at
the Disbursement Agent pursuant to the terms of the Disbursement Agreement.
"Wet-Ink Mortgage Loan" shall mean a Mortgage Loan which any
Seller is selling to Buyer simultaneously with the origination thereof and for
which the Mortgage Loan Documents have not been delivered to the Custodian.
"Wiring Schedule" shall mean, for each Wet-Ink Mortgage Loan,
a schedule setting forth the loan identification number, the loan amount to be
funded by wire transfer and wiring directions for such Wet-Ink Mortgage Loan.
-22-
SECTION 3. INITIATION; TERMINATION
(a) Conditions Precedent to Initial Transaction. Buyer's
agreement to enter into the initial Transaction hereunder is subject to the
satisfaction, immediately prior to or concurrently with the making of such
Transaction, of the condition precedent that Buyer shall have received from the
Sellers any fees and expenses payable hereunder, and all of the following
documents, each of which shall be satisfactory to Buyer and its counsel in form
and substance:
(i) The following Repurchase Documents delivered to the Buyer:
(A) Repurchase Agreement. This Repurchase Agreement, duly
executed by the parties thereto;
(B) Custodial Agreement. The Custodial Agreement, duly
executed by the parties thereto;
(C) Account Agreement. An Account Agreement, duly executed
by the parties thereto in form and substance acceptable to the
Buyer;
(D) Settlement Account Agreement. A Settlement Account
Agreement, duly executed by the parties thereto in form and
substance acceptable to the Buyer;
(E) Electronic Tracking Agreement. To the extent the
Sellers are selling Mortgage Loans which are registered on the
MERS(R) System, an Electronic Tracking Agreement entered into,
duly executed and delivered by the parties thereto, in full
force and effect, free of any modification, breach or waiver;
and
(F) Disbursement Agreement. A Disbursement Agreement, duly
executed by the parties thereto in form and substance
acceptable to the Buyer; and the establishment thereunder of
all accounts, computer systems and agreements with the
Disbursement Agent necessary for disbursing the Purchase Price
related to Wet-Ink Mortgage Loans.
(ii) Opinions of Counsel. An opinion or opinions of outside
counsel to the Sellers, substantially in the form of Exhibit II.
(iii) Seller Organizational Documents. A certificate of
corporate existence of each Seller delivered to Buyer prior to the
Effective Date (or if unavailable, as soon as available thereafter) and
certified copies of the charter and by-laws (or equivalent documents) of
such Seller and of all corporate or other authority for such Seller with
respect to the execution, delivery and performance of the Repurchase
Documents and each other document to be delivered by such Seller from time
to time in connection herewith.
(iv) Security Interest. Evidence that all other actions
necessary or, in the opinion of Buyer, desirable to perfect and protect
Buyer's interest in the Purchased Mortgage Loans and other Repurchase
Assets have been taken, including, without
-23-
limitation, UCC searches and duly authorized and filed Uniform Commercial
Code financing statements on Form UCC-1.
(v) Underwriting Guidelines. A true and correct copy of the
Underwriting Guidelines certified by an officer of MortgageIT.
(vi) Insurance. Evidence that Sellers have added Buyer as an
additional insured under their Fidelity Insurance.
(vii) Other Documents. Such other documents as Buyer may
reasonably request, in form and substance reasonably acceptable to Buyer.
(b) Conditions Precedent to all Transactions. Upon
satisfaction of the conditions set forth in this Section 3(b), the Buyer shall
enter into a Transaction with the applicable Seller. This Repurchase Agreement
is a commitment by Buyer to engage in the Transactions as set forth herein up to
the Maximum Committed Purchase Price; provided, that the Buyer shall have no
commitment to enter into any Transaction requested which would result in the
aggregate Purchase Price of then outstanding Transactions to exceed the Maximum
Committed Purchase Price. Buyer's obligation to enter into each Transaction,
provided that the Purchase Price of the requested Transaction combined with the
aggregate amount of the respective Purchase Prices for all then outstanding
Transactions does not exceed the Maximum Committed Purchase Price (including the
initial Transaction) is subject to the satisfaction of the following further
conditions precedent, both immediately prior to entering into such Transaction
and also after giving effect thereto to the intended use thereof:
(i) Buyer shall have executed and delivered a Confirmation in
accordance with the procedures set forth in Section 3(c);
(ii) No Termination Event, Default or Event of Default shall
have occurred and be continuing under the Repurchase Documents;
(iii) Both immediately prior to the Transaction and also after
giving effect thereto and to the intended use thereof, the representations
and warranties made by the each Seller in Section 11 hereof, shall be true,
correct and complete on and as of such Purchase Date in all material
respects with the same force and effect as if made on and as of such date
(or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date);
(iv) After giving effect to the requested Transaction, the
aggregate outstanding Purchase Price for all Purchased Mortgage Loans
subject to then outstanding Transactions under this Repurchase Agreement
shall not exceed the Maximum Purchase Price or the Available Amount.
Notwithstanding the preceding sentence, Buyer shall have no obligation to
enter into any Transaction, if, as a result of such Transaction the
aggregate Purchase Price for all Purchased Mortgage Loans subject to then
outstanding Transactions under this Agreement exceed the Maximum Committed
Purchase Price;
-24-
(v) After giving effect to the requested Transaction, the
Asset Value of all Purchased Mortgage Loans exceeds the aggregate
Repurchase Price for such Transactions;
(vi) On or prior to 5:30 p.m. (New York Time) one (1) day
prior to the related Purchase Date, each applicable Seller shall have
delivered to the Buyer (a) a Transaction Request, and (b) a Purchased
Mortgage Loan Report;
(vii) With respect to Transactions the subject of which are
Wet-Ink Mortgage Loans:
(A) At least one Business Day prior to the related
Purchase Date, the Buyer shall have received a Transaction
Request;
(B) By 12:00 noon (New York time) on the related
Purchase Date, the Custodian shall have received from the
Buyer a schedule setting forth the mortgage loan
identification number, the Mortgagor name and the outstanding
principal balance of Wet-Ink Mortgage Loans to be purchased by
Buyer on such Purchase Date; and
(C) The Custodian and the Buyer shall have received a
Wiring Schedule setting forth the disbursement amount and
wiring instructions for each Wet-Ink Mortgage Loan.
(viii) The Sellers shall have delivered to the Custodian the
Mortgage File with respect to each Purchased Mortgage Loan which is not a
Wet-Ink Mortgage Loan and the Custodian shall have issued a Trust Receipt
with respect to each such Purchased Mortgage Loan to the Buyer and (B) with
respect to each Wet-Ink Mortgage Loan, by no later than 5:00 p.m. (New York
Time) on the seventh Business Day following the applicable Purchase Date,
the Sellers shall deliver the Mortgage File to the Custodian;
(ix) The Buyer shall have received all fees and expenses of
counsel to the Buyer as contemplated by Sections 15(b) and 27 which
amounts, at the Buyer's option, may be withheld from the proceeds remitted
by Buyer to the Sellers pursuant to any Transaction hereunder;
(x) None of the following shall have occurred and/or be
continuing:
(A) an event or events shall have occurred in the good
faith determination of the Buyer resulting in the effective
absence of a "repo market" or comparable "lending market" for
financing debt obligations secured by securities or an event
or events shall have occurred resulting in the Buyer not being
able to finance Purchased Mortgage Loans through the "repo
market" or "lending market" with traditional counterparties at
rates which would have been reasonable prior to the occurrence
of such event or events; or
(B) there shall have occurred a material adverse change
in the financial condition of the Buyer which affects (or can
reasonably be expected to affect)
-25-
materially and adversely the ability of the Buyer to fund its
obligations under this Repurchase Agreement; or
(xi) Each Transaction Request delivered by a Seller hereunder
shall constitute a certification by such Seller that all the conditions set
forth in this Section 3(b) (other than clause (x) hereof) have been
satisfied (both as of the date of such notice or request and as of the date
of such purchase).
(c) Initiation; Confirmation.
(i) Each Seller shall deliver a Transaction Request to the
Buyer on or prior to 5:30 p.m. on the date one (1) Business Day prior to
entering into any Transaction (including Transactions resulting in a
Purchase Price Increase, which shall not be requested more than once per
month). Such Transaction Request shall include a Mortgage Loan Schedule
with respect to the Mortgage Loans to be sold in such requested
Transaction. Following receipt of such request, Buyer may agree to enter
into such requested Transaction or shall notify such Seller of its
intention not to enter into such Transaction within one (1) Business Day of
the receipt of any Transaction Request. Buyer shall confirm the terms of
each Transaction by issuing a written confirmation to each Seller promptly
after the parties enter into such Transaction in the form of Exhibit I
attached hereto (a "Confirmation"). Such Confirmation shall set forth (A)
the Purchase Date, (B) the Purchase Price or Purchase Price Increase, as
applicable, (C) the Repurchase Date, (D) the Pricing Rate applicable to the
Transaction, (E) the applicable Purchase Price Percentages, (F) LIBOR
Period and (G) additional terms or conditions not inconsistent with this
Repurchase Agreement.
(ii) The Repurchase Date for each Transaction shall not be
later than the date which is 364 days after the related Purchase Date. The
LIBOR Period for each Transaction shall be one month, unless agreed to in
writing by the Buyer.
(iii) Each Confirmation, together with this Repurchase
Agreement, shall be conclusive evidence of the terms of the Transaction(s)
covered thereby unless objected to in writing by the Sellers no more than
two (2) Business Days after the date the Confirmation was received by the
Sellers or unless a corrected Confirmation is sent by Buyer. An objection
sent by the Sellers must state specifically that writing which is an
objection, must specify the provision(s) being objected to by the Sellers,
must set forth such provision(s) in the manner that the Sellers believe
they should be stated, and must be received by Buyer no more than two (2)
Business Days after the Confirmation was received by the Sellers.
(iv) Subject to the terms and conditions of this Repurchase
Agreement, during such period the Sellers may sell, repurchase and resell
Eligible Mortgage Loans hereunder.
(v) In no event shall a Transaction be entered into when the
Repurchase Date for such Transaction would be later than the Termination
Date.
-26-
(vi) No later than 3 p.m., New York City time, on the Business
Day prior to the requested Purchase Date, the Sellers shall deliver to the
Custodian the Mortgage Loan File pertaining to each Eligible Mortgage Loan
(other than a Wet-Ink Mortgage Loan) to be purchased by the Buyer.
(vii) With respect to Transactions the subject of which are
Wet-Ink Mortgage Loans:
(A) No later than 5:30 p.m. (New York time) on the
Business Day prior to the related Purchase Date, the Buyer
shall have received a report detailing the approximate
outstanding principal balance of Wet-Ink Mortgage Loans to be
purchased by the Buyer on such Purchase Date and the Estimated
Purchase Price.
(B) On or before the Purchase Date, the Buyer shall have
received (a) a schedule setting forth the mortgage loan
identification number, the Mortgagor name and the approximate
outstanding principal balance of Wet-Ink Mortgage Loans to be
purchased by Buyer on such Purchase Date, and (b) an updated
report setting forth the approximate outstanding principal
balance of Wet-Ink Mortgage Loans to be purchased by the Buyer
on such Purchase Date and the amount of the Actual Purchase
Price. On the Purchase Date, the Buyer shall remit the amount
of the Estimated Purchase Price directly to the Wet-Ink
Funding Account to be disbursed by the Disbursement Agent in
accordance with the Disbursement Agreement.
(C) With respect to Wet-Ink Mortgage Loans which are
being purchased in whole or in part by means of wire transfer,
on or prior to the related Purchase Date, the Custodian shall
have received the Wiring Schedule related to such Wet-Ink
Mortgage Loans. Upon receipt by the Buyer of the Wiring
Schedule, the Buyer shall forward the Wiring Schedule and
direct the Disbursement Agent to wire the related funding
amount to each Mortgagor from the Wet-Ink Funding Account.
(D) Notwithstanding the foregoing, the full amount of
the Estimated Purchase Price shall be deemed to have been made
on the Purchase Date for all purposes hereunder.
(E) Upon receipt of the final Wiring Schedule with
respect to any Purchase Date, the Buyer shall determine the
amount, if any, by which the Estimated Purchase Price
deposited in the Wet-Ink Funding Account exceeds the Actual
Purchase Price (such amount, the "Overestimate Amount"). The
Buyer shall cause the Disbursement Agent to promptly wire such
Overestimate Amount directly to the Buyer as a prepayment of
the Transaction made on such Purchase Date.
(viii) Subject to the provisions of this Section 3, the
Purchase Price or Purchase Price Increase, as applicable, will then be made
available to the Sellers by the Buyer
-27-
transferring, via wire transfer, in the aggregate amount of such Purchase
Price or Purchase Price Increase, as applicable, in funds immediately
available.
(ix) Sellers may request a Purchase Price Increase not more
than once per month on account of a Draw made by a Mortgagor on the related
HELOC. The Buyer shall not be obligated to fund such Purchase Price
Increase if a Margin Deficit exists or would exist as a result thereof.
(d) Repurchase
(i) The Sellers may repurchase Purchased Mortgage Loans
without penalty or premium on any date. The Repurchase Price payable for
the repurchase of any such Purchased Mortgage Loan shall be reduced as
provided in Section 5(d). If the Sellers intend to make such a repurchase,
the Sellers shall give prior written notice thereof by 10:00 a.m. on the
same Business Day to the Buyer, designating the Purchased Mortgage Loans to
be repurchased. If such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, and, on
receipt, such amount shall be applied to the Repurchase Price for the
designated Purchased Mortgage Loans.
(ii) On the Repurchase Date, termination of the Transaction
will be effected by reassignment to a Seller or its designee of the
Purchased Mortgage Loans (and any Income in respect thereof received by
Buyer not previously credited or transferred to, or applied to the
obligations of, the Sellers pursuant to Section 5) against the simultaneous
transfer of the Repurchase Price to an account of Buyer. The Sellers are
obligated to obtain the Mortgage Files from Buyer or its designee at the
Sellers' expense on the Repurchase Date.
SECTION 4. MARGIN AMOUNT MAINTENANCE
(a) The Buyer shall determine the Asset Value of the Purchased
Mortgage Loans on a weekly basis, or at such intervals as determined by the
Buyer in its sole good faith discretion.
(b) If at any time the aggregate Asset Value of all related
Purchased Mortgage Loans subject to all Transactions is less than the aggregate
Repurchase Price for all such Transactions (a "Margin Deficit"), then Buyer may
by notice to the Sellers (as such notice is more particularly set forth below, a
"Margin Call"), require the Sellers to transfer to Buyer or its designee cash or
Eligible Mortgage Loans approved by the Buyer in its sole good faith discretion
("Additional Purchased Mortgage Loans") so that the aggregate Asset Value of the
Purchased Mortgage Loans, including any such cash or Additional Purchased
Mortgage Loans or cash, will thereupon equal or exceed the aggregate Repurchase
Price for all Transactions. If Buyer delivers a Margin Call to the Sellers on or
prior to 5 p.m. (New York City time) on any Business Day, then the Sellers shall
transfer cash or Additional Purchased Mortgage Loans to Buyer no later than 5
p.m. (New York City time) on the subsequent Business Day.
-28-
(c) Buyer's election, in its sole and absolute discretion, not
to make a Margin Call at any time there is a Margin Deficit shall not in any way
limit or impair its right to make a Margin Call at any time a Margin Deficit
exists.
(d) Any cash transferred to the Buyer pursuant to Section 4(b)
above shall be credited to the Repurchase Price of the related Transactions.
SECTION 5. INCOME PAYMENTS
(a) Notwithstanding that Buyer and the Sellers intend that the
Transactions hereunder be sales to Buyer of the Purchased Mortgage Loans, the
Sellers shall pay to Buyer the accreted value of the Price Differential (less
any amount of such Price Differential previously paid by the Sellers to Buyer)
plus the amount of any unpaid Margin Deficit (each such payment, a "Periodic
Advance Repurchase Payment") on each Payment Date, as invoiced by the Buyer on
the related Payment Date. The Sellers shall initiate wire payment of the
Periodic Advance Repurchase Payment within two (2) hours of receipt of such
invoice on the related Payment Date. If the Sellers fail to make all or part of
the Periodic Advance Repurchase Payment in accordance with the previous
sentence, the Pricing Rate shall be equal to the Post-Default Rate until the
Periodic Advance Repurchase Payment is received in full by Buyer.
(b) The Sellers shall hold for the benefit of, and in trust
for, Buyer all income, including without limitation all Income received by or on
behalf of the Sellers with respect to such Purchased Mortgage Loans. All Income
shall be held in trust for Buyer, shall constitute the property of Buyer. With
respect to each Payment Date, the Sellers shall remit all Income as follows:
(i) first, to the payment of all costs and fees payable by the
Sellers pursuant to this Repurchase Agreement;
(ii) second, to the Buyer in payment of any accrued and unpaid
Price Differential; and
(iii) third, without limiting the rights of Buyer under
Section 4 of this Repurchase Agreement, to the Buyer, in the amount of any
unpaid Margin Deficit.
(c) After the occurrence of an Event of Default, the Sellers
shall deposit such Income in a deposit account (the title of which shall
indicate that the funds therein are being held in trust for Buyer) (the
"Collection Account") with a financial institution acceptable to Buyer and
subject to the Account Agreement. All such Income shall be held in trust for
Buyer, shall constitute the property of Buyer and shall not be commingled with
other property of the Sellers or any Affiliate of the Sellers except as
expressly permitted above. Funds deposited in the Collection Account during any
month shall be held therein, in trust for the Buyer, until the next Payment
Date. Subject to the terms of the Account Agreement, the Sellers shall withdraw
any funds on deposit in the Collection Account and apply such funds as follows:
(i) first, to the payment of all costs and fees payable by the
Sellers pursuant to this Repurchase Agreement;
-29-
(ii) second, to the Buyer in payment of any accrued and unpaid
Price Differential;
(iii) third, without limiting the rights of Buyer under
Section 4 of this Repurchase Agreement, to the Buyer, in the amount of any
unpaid Margin Deficit; and
(iv) fourth, to the Sellers.
(d) To the extent that the Buyer receives any funds from a
Takeout Investor with respect to the purchase by such Takeout Investor of a
Mortgage Loan, the Buyer shall promptly apply such funds in accordance with the
same order of priority set forth in Section 5(b) hereof.
(e) Buyer shall offset against the Repurchase Price of each
such Transaction all Income and Periodic Advance Repurchase Payments actually
received by Buyer pursuant to Section 5(a), excluding any Late Payment Fees paid
pursuant to any Periodic Advance Repurchase Payments made at the Post-Default
Rate pursuant to Section 5(a).
SECTION 6. REQUIREMENTS OF LAW
(a) If any Requirement of Law (other than with respect to any
amendment made to the Buyer's certificate of incorporation and by-laws or other
organizational or governing documents) or any change in the interpretation or
application thereof or compliance by the Buyer with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject the Buyer to any tax of any kind whatsoever
with respect to this Repurchase Agreement or any Transaction (excluding net
income taxes, branch profits taxes, franchise taxes or similar taxes imposed on
the Buyer as a result of any present or former connection between the Buyer and
the United States, other than any such connection arising solely from the Buyer
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Repurchase Agreement) or change the basis of taxation
of payments to the Buyer in respect thereof;
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, or
other extensions of credit by, or any other acquisition of funds by, any
office of the Buyer which is not otherwise included in the determination of
the LIBOR Rate hereunder;
(iii) shall impose on the Buyer any other condition;
and the result of any of the foregoing is to increase the cost to the Buyer, by
an amount which the Buyer determines in good faith to be material, of entering,
continuing or maintaining any Transaction or to reduce any amount due or owing
hereunder in respect thereof, then, in any such case, the Sellers shall promptly
pay the Buyer such additional amount or amounts as calculated by the Buyer in
good faith as will compensate the Buyer for such increased cost or reduced
amount receivable.
-30-
(b) If the Buyer shall have determined that the adoption of or
any change in any Requirement of Law (other than with respect to any amendment
made to the Buyer's certificate of incorporation and by-laws or other
organizational or governing documents) regarding capital adequacy or in the
interpretation or application thereof or compliance by the Buyer or any
corporation controlling the Buyer with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on the Buyer's or such corporation's capital as a consequence
of its obligations hereunder to a level below that which the Buyer or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration the Buyer's or such corporation's policies with
respect to capital adequacy) by an amount determined in good faith by the Buyer
to be material, then from time to time, the Sellers shall promptly pay to the
Buyer such additional amount or amounts as will compensate the Buyer for such
reduction.
(c) If the Buyer becomes entitled to claim any additional
amounts pursuant to this Section, it shall promptly notify the Sellers of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this Section submitted by the Buyer to
the Sellers shall be conclusive in the absence of manifest error.
(d) No amount shall be payable by any Seller under this
Section 6 with respect to any period in excess of ninety (90) days prior to the
date of demand by the Buyer unless the effect of a change in the interpretation
or application of the Requirement of Law is retroactive by its terms to a period
prior to the date of the change in interpretation or application of the
Requirement of Law, in which case any additional amount or amounts shall be
payable for the retroactive period but only if the Buyer provides its written
demand not later than ninety (90) days after the change in the interpretation or
application of the Requirement of Law.
SECTION 7. TAXES.
(a) All payments made by any Seller under
this Repurchase Agreement shall be made free and clear of, and without deduction
or withholding for, or on account of, any present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities (including
penalties, interest and additions to tax) with respect thereto imposed by any
Governmental Authority thereof or therein ("Taxes"), excluding income taxes,
branch profits taxes, franchise taxes or similar taxes imposed on the Buyer as a
result of any present or former connection between the Buyer and the United
States, other than any such connection arising solely from the Buyer having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Repurchase Agreement (all such nonexcluded Taxes, "Non-Excluded
Taxes"). If any Seller shall be required to deduct or withhold any Taxes from or
in respect of any amount payable hereunder, (i) such Seller shall make such
deductions or withholdings, (ii) such Seller shall pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
law, and (iii) with respect to any Non-Excluded Taxes, the amount payable shall
be increased by an amount (the "additional amount") necessary so that the Buyer,
shall receive a net amount equal to the amount it would have received had no
such deductions or withholdings in respect of Non-Excluded Taxes been made.
-31-
(b) In addition, each Seller agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including, without limitation, mortgage recording taxes and
similar fees) imposed by the United States or any taxing authority thereof or
therein that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Repurchase
Agreement ("Other Taxes")
(c) The Sellers will indemnify the Buyer for the full amount
of Non-Excluded Taxes (including additional amounts with respect thereto) and
Other Taxes paid by the Buyer, provided that the Buyer shall have provided the
Sellers with evidence, reasonably satisfactory to the Seller, of payment of
Non-Excluded Taxes or Other Taxes, as the case may be.
(d) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Sellers to the relevant Governmental Authority, the
Seller will deliver to the Buyer the original or a certified copy of the receipt
issued by such Governmental Authority evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
of the Sellers hereunder, the agreements and obligations of the Sellers
contained in this Section 7 shall survive the termination of this Repurchase
Agreement. Nothing contained in this Section 7 shall require the Buyer to make
available any of its tax returns or any other information that it deems to be
confidential or proprietary.
SECTION 8. SECURITY INTEREST
Although the parties intend that all Transactions hereunder be
sales and purchases (other than for accounting and tax purposes) and not loans,
in the event any such Transactions are deemed to be loans, each Seller hereby
pledges to Buyer as security for the performance by the Sellers of their
Obligations and hereby grants, assigns and pledges to Buyer a fully perfected
first priority security interest in the Purchased Mortgage Loans, the Records,
and all servicing rights related to the Purchased Mortgage Loans, the Repurchase
Documents (to the extent such Repurchase Documents and such Seller's right
thereunder relate to the Purchased Mortgage Loans), any Property relating to any
Purchased Mortgage Loan or the related Mortgaged Property, any Takeout
Commitments relating to any Purchased Mortgage Loan, all insurance policies and
insurance proceeds relating to any Purchased Mortgage Loan or the related
Mortgaged Property, including but not limited to any payments or proceeds under
any related primary insurance, hazard insurance, FHA Mortgage Insurance
Contracts and VA Loan Guaranty Agreements (if any), any Income relating to any
Purchased Mortgage Loan, the Collection Account, any Interest Rate Protection
Agreements relating to any Purchased Mortgage Loan, and any other contract
rights, accounts (including any interest of such Seller in escrow accounts),
payments, rights to payment (including payments of interest or finance charges)
and general intangibles to the extent that the forgoing relates to any Purchased
Mortgage Loan and any other assets relating to the Purchased Mortgage Loans or
any interest in the Purchased Mortgage Loans, all collateral under any other
secured debt facility between the Sellers or their Affiliates on the one hand
and the Buyer and the Buyer's Affiliates on the other, and any proceeds
(including the related securitization proceeds) and distributions and any other
property, rights, title or interests as are specified on a Trust Receipt and
Mortgage Loan Schedule
-32-
and Exception Report with respect to any of the foregoing, in all instances,
whether now owned or hereafter acquired, now existing or hereafter created
(collectively, the "Repurchase Assets").
The Sellers hereby authorize the Buyer to file such financing
statement or statements relating to the Repurchase Assets as the Buyer, at its
option, may deem appropriate. The Sellers shall pay the filing costs for any
financing statement or statements prepared pursuant to this Section 8.
SECTION 9. PAYMENT, TRANSFER AND CUSTODY
(a) Unless otherwise mutually agreed in writing, all transfers
of funds to be made by the Sellers hereunder shall be made in Dollars, in
immediately available funds, without deduction, set-off or counterclaim, to the
Buyer at the following account maintained by the Buyer: Account No. 62030, for
the account of MLBUSA Matchbook, Bankers Trust, N.Y., ABA# 124 084 669, CoPer
ID: 154787016, not later than 5:00 p.m. New York City time, on the date on which
such payment shall become due (and each such payment made after such time shall
be deemed to have been made on the next succeeding Business Day). The Sellers
acknowledge that they have no rights of withdrawal from the foregoing account.
(b) On the Purchase Date for each Transaction, ownership of
the Purchased Mortgage Loans shall be transferred to the Buyer or its designee
against the simultaneous transfer of the Purchase Price to the following account
of the Sellers (or as otherwise directed by the Sellers): Deutsche Bank National
Trust Company, Account No. 37622, for the account of Buyer, ABA# 0000-000-000.
With respect to the Purchased Mortgage Loans being sold by a Seller on a
Purchase Date, each Seller hereby sells, transfers, conveys and assigns to Buyer
or its designee without recourse, but subject to the terms of this Repurchase
Agreement, all the right, title and interest of such Seller in and to the
Purchased Mortgage Loans together with all right, title and interest in and to
the proceeds of any related Repurchase Assets.
(c) In connection with such sale, transfer, conveyance and
assignment, on or prior to each Purchase Date, the Sellers shall deliver or
cause to be delivered and released to Buyer or its designee the Mortgage File
for the related Purchased Mortgage Loans.
SECTION 10. HYPOTHECATION OR PLEDGE OF PURCHASED MORTGAGE LOAN
Title to all Purchased Mortgage Loans and Repurchase Assets
shall pass to Buyer and Buyer shall have free and unrestricted use of all
Purchased Mortgage Loans. Nothing in this Repurchase Agreement shall preclude
the Buyer from engaging in repurchase transactions with the Purchased Mortgage
Loans or otherwise pledging, repledging, transferring, hypothecating, or
rehypothecating the Purchased Mortgage Loans. Nothing contained in this
Repurchase Agreement shall obligate the Buyer to segregate any Purchased
Mortgage Loans delivered to the Buyer by the Sellers.
-33-
SECTION 11. REPRESENTATIONS
Each Seller represents and warrants to the Buyer that as of
the Purchase Date for any Purchased Mortgage Loans by the Buyer from the Sellers
and as of the date of this Repurchase Agreement and any Transaction hereunder
and at all times while the Repurchase Documents and any Transaction hereunder is
in full force and effect:
(a) Acting as Principal. The Sellers will engage in such
Transactions as principals (or, if agreed in writing in advance of any
Transaction by the other party hereto, as agent for a disclosed principal).
(b) No Broker. The Sellers have 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 Mortgage Loans pursuant to this Repurchase Agreement.
(c) Financial Statements. The Sellers have heretofore
furnished to the Buyer a copy of its (a) consolidated balance sheet and the
consolidated balance sheets of its consolidated Subsidiaries for the fiscal year
ended December 31, 2003 and the related consolidated statements of income and
retained earnings and of cash flows for the Sellers and their respective
consolidated Subsidiaries for such fiscal year, setting forth in each case in
comparative form the figures for the previous year, with the opinion thereon of
BDO Xxxxxxx LLP and (b) consolidated balance sheet and the consolidated balance
sheets of its consolidated Subsidiaries for the quarterly fiscal period of the
Sellers ended March 31, 2004 and June 30, 2004, respectively and the related
consolidated statements of income and retained earnings and of cash flows for
the Sellers and their respective consolidated Subsidiaries for such quarterly
fiscal period, setting forth in each case in comparative form the figures for
the previous year. All such financial statements are complete and correct and
fairly present, in all material respects, the consolidated financial condition
of the Sellers and their respective Subsidiaries and the consolidated results of
their operations as at such dates and for such fiscal periods, all in accordance
with GAAP applied on a consistent basis. Since December 31, 2003, there has been
no material adverse change in the consolidated business, operations or financial
condition of the Sellers and their respective consolidated Subsidiaries taken as
a whole from that set forth in said financial statements nor are the Sellers
aware of any state of facts which (without notice or the lapse of time) would or
could result in any such material adverse change. The Sellers do not have, on
the date of the statements delivered pursuant to this section (the "Statement
Date"), any liabilities, direct or indirect, fixed or contingent, matured or
unmatured, known or unknown, or liabilities for taxes, long-term leases or
unusual forward or long-term commitments not disclosed by, or reserved against
in, said balance sheet and related statements, and at the present time there are
no material unrealized or anticipated losses from any loans, advances or other
commitments of the Sellers which are required to be disclosed in or reserved
against in said balance sheet and related statement under GAAP.
(d) Organization, Etc. MortgageIT is a corporation duly
organized, validly existing and in good standing under the laws of New York.
Holdings is a corporation duly organized, validly existing and in good standing
under the laws of Maryland. MHL is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
-34-
NABL is a corporation duly organized, validly existing and in good standing
under the laws of Delaware. The Sellers (a) have all requisite corporate or
other power, and have all governmental licenses, authorizations, consents and
approvals necessary to own their respective assets and carry on their respective
businesses as now being or as proposed to be conducted, except where the lack of
such licenses, authorizations, consents and approvals would not be reasonably
likely to have a Material Adverse Effect; (b) are qualified to do business and
is in good standing in all other jurisdictions in which the nature of the
business conducted by it makes such qualification necessary, except where
failure so to qualify would not be reasonably likely (either individually or in
the aggregate) to have a Material Adverse Effect; and (c) have full power and
authority to execute, deliver and perform their respective obligations under the
Repurchase Documents.
(e) Authorization, Compliance, Etc. The execution and delivery
of, and the performance by the Sellers of their obligations under, the
Repurchase Documents to which they are parties (a) are within the Sellers'
powers, (b) have been duly authorized by all requisite action, (c) do not
violate any provision of applicable law, rule or regulation, or any order, writ,
injunction or decree of any court or other Governmental Authority, or their
respective organizational documents, (d) do not violate any indenture,
agreement, document or instrument to which the Sellers are parties, or by which
they or any of their properties, any of the Repurchase Assets are bound or to
which they are subject and (e) are not in conflict with, do not result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under, or except as may be provided by any Repurchase Document, result in the
creation or imposition of any Lien upon any of the property or assets of the
Sellers pursuant to, any such indenture, agreement, document or instrument. The
Sellers are not required to obtain any consent, approval or authorization from,
or to file any declaration or statement with, any Governmental Authority in
connection with or as a condition to the consummation of the Transactions
contemplated herein and the execution, delivery or performance of the Repurchase
Documents to which it is a party.
(f) Litigation. On the date hereof, there are no actions,
suits, arbitrations, investigations (including, without limitation, any of the
foregoing which are pending or threatened) or other legal or arbitrable
proceedings affecting the Sellers or any of their Subsidiaries or affecting any
of the Repurchase Assets or any of the other properties of the Sellers before
any Governmental Authority which (i) questions or challenges the validity or
enforceability of the Repurchase Documents or any action to be taken in
connection with the transactions contemplated hereby, (ii) individually or in
the aggregate, if adversely determined, would have a Material Adverse Effect, or
(iii) requires filing with the SEC in accordance with its regulations.
(g) Purchased Mortgage Loans.
(i) No Seller has assigned, pledged, or otherwise conveyed or
encumbered any Purchased Mortgage Loan to any other Person, and immediately
prior to the sale of such Mortgage Loan to the Buyer, the applicable Seller
was the sole owner of such Purchased Mortgage Loan and had good and
marketable title thereto, free and clear of all Liens, in each case except
for Liens to be released simultaneously with the sale to the Buyer
hereunder.
-35-
(ii) The provisions of this Repurchase Agreement are effective
to either constitute a sale of Repurchase Assets to the Buyer or to create
in favor of the Buyer a valid security interest in all right, title and
interest of the Sellers in, to and under the Repurchase Assets.
(h) Chief Executive Office/Jurisdiction of Organization. On
the Effective Date, MortgageIT's, Holdings', MHL's and NABL's chief executive
office is, and has been, located at 00 Xxxxxx Xxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000. MortgageIT's jurisdiction of organization is New York. Holdings'
jurisdiction of organization is Maryland. MHL's and NABL's jurisdiction of
organization is Delaware.
(i) Location of Books and Records. The location where the
Sellers keep their books and records, including all computer tapes and records
related to the Repurchase Assets are their respective chief executive offices.
(j) Filing and Payment of Taxes. Each Seller and its
subsidiaries have timely filed on a timely basis all federal, state and local
Tax and information returns, reports and any other information statements or
schedules that are required to be filed by or in respect of them and have timely
paid all Taxes due pursuant to such returns, reports or other information
statements or schedules or pursuant to any assessment received by it or any of
its Subsidiaries, except for any such Taxes as are being appropriately contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves have been provided. The charges, accruals and
reserves on the books of the Sellers in respect of taxes and other governmental
charges are adequate. There are no Liens for Taxes except Statutory liens for
Taxes not yet due and payable.
(k) Enforceability. This Repurchase Agreement and all of the
other Repurchase Documents executed and delivered by the Sellers in connection
herewith are legal, valid and binding obligations of the Sellers and are
enforceable against the Sellers in accordance with their terms except as such
enforceability may be limited by (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors
rights generally and (ii) general principles of equity.
(l) Ability to Perform. No Seller believes, nor do they have
any reason or cause to believe, that they cannot perform each and every covenant
contained in the Repurchase Documents to which they are parties on their part to
be performed.
(m) Material Adverse Effect. Since December 31, 2003, there
has been no development or event nor, to any Seller's knowledge, any prospective
development or event, which has had or could have a Material Adverse Effect.
(n) No Default. No Default or Event of Default has occurred
and is continuing.
(o) Underwriting Guidelines. The Underwriting Guidelines
provided to Buyer are the true and correct Underwriting Guidelines of the
Sellers.
(p) Adverse Selection. No Seller has not selected the
Purchased Mortgage Loans in a manner so as to adversely affect Buyer's
interests.
-36-
(q) Tangible Net Worth. The Tangible Net Worth of the Sellers,
on a consolidated basis, is not less than $175,000,000. The Tangible Net Worth
of MortgageIT is not less than $25,000,000.
(r) Indebtedness. The Sellers do not have any Indebtedness,
except as disclosed on Schedule 2 to this Repurchase Agreement.
(s) Accurate and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished in writing by or
on behalf of any Seller to the Buyer in connection with the negotiation,
preparation or delivery of this Repurchase Agreement and the other Repurchase
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole, do not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by or on
behalf of any Seller to the Buyer in connection with this Repurchase Agreement
and the other Repurchase Documents and the transactions contemplated hereby and
thereby will be true, complete and accurate in every material respect, or (in
the case of projections) based on reasonable estimates, on the date as of which
such information is stated or certified. There is no fact known to any Seller
that could reasonably be expected to have a Material Adverse Effect that has not
been disclosed herein, in the other Repurchase Documents or in a report,
financial statement, exhibit, schedule, disclosure letter or other writing
furnished to the Buyer for use in connection with the transactions contemplated
hereby or thereby.
(t) Margin Regulations. The use of all funds acquired by the
Sellers under this Repurchase Agreement will not conflict with or contravene any
of Regulations T, U or X promulgated by the Board of Governors of the Federal
Reserve System as the same may from time to time be amended, supplemented or
otherwise modified.
(u) Investment Company. No Seller is an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(v) Solvency. As of the date hereof and immediately after
giving effect to each Transaction, the fair value of the respective assets of
each Seller is greater than the fair value of the liabilities (including,
without limitation, contingent liabilities if and to the extent required to be
recorded as a liability on the financial statements of such Seller in accordance
with GAAP) of such Seller and such Seller is solvent and, after giving effect to
the transactions contemplated by this Repurchase Agreement and the other
Repurchase Documents, will not be rendered insolvent or left with an
unreasonably small amount of capital with which to conduct its business and
perform its obligations. The Sellers do not intend to incur, nor do they believe
that they have incurred, debts beyond their ability to pay such debts as they
mature. The Sellers are not contemplating the commencement of an insolvency,
bankruptcy, liquidation, or consolidation proceeding or the appointment of a
receiver, liquidator, conservator, trustee, or similar official in respect of
themselves or any of their property.
(w) ERISA.
-37-
(i) No liability under Section 4062, 4063, 4064 or 4069 of
ERISA has been or is expected by any Seller to be incurred by any Seller or
any ERISA Affiliate thereof with respect to any Plan which is a
Single-Employer Plan in an amount that could reasonably be expected to have
a Material Adverse Effect.
(ii) No Plan of any Seller which is a Single-Employer Plan had
an accumulated funding deficiency, whether or not waived, as of the last
day of the most recent fiscal year of such Plan ended prior to the date
hereof. None of the Sellers nor any ERISA Affiliate thereof is (i) required
to give security to any Plan which is a Single-Employer Plan pursuant to
Section 401(a) (29) of the Code or Section 307 of ERISA, or (ii) subject to
a Lien in favor of such a Plan under Section 302(f) of ERISA.
(iii) Each Plan of the Sellers, each of their Subsidiaries and
each of their ERISA Affiliates is in compliance in all material respects
with the applicable provisions of ERISA and the Code, except where the
failure to comply would not result in any Material Adverse Effect.
(iv) None of the Sellers nor any of their Subsidiaries has
incurred a tax liability under Section 4975 of the Code or a penalty under
Section 502(i) of ERISA in respect of any Plan which has not been paid in
full, except where the incurrence of such tax or penalty would not result
in a Material Adverse Effect.
(v) None of the Sellers nor any of their Subsidiaries or any
ERISA Affiliate thereof has incurred or reasonably expects to incur any
withdrawal liability under Section 4201 of ERISA as a result of a complete
or partial withdrawal from a Multiemployer Plan which will result in
withdrawal liability to any of the Sellers, any of their Subsidiaries or
any ERISA Affiliate thereof in an amount that could reasonably be expected
to have a Material Adverse Effect.
(x) Agency Approvals. Each Seller is an FHA Approved Mortgagee
and a VA Approved Lender. Each Seller is also approved by Xxxxxx Xxx as an
approved lender and Xxxxxxx Mac as an approved seller, and, to the extent
necessary, approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act. In each such case, each
Seller is in good standing, with no event having occurred prior to the issuance
of the consummation of the related Takeout Commitment, including, without
limitation, a change in insurance coverage which would either make such Seller
unable to comply with the eligibility requirements for maintaining all such
applicable approvals or require notification to the relevant Agency or to the
Department of Housing and Urban Development, FHA or VA. Each Seller has adequate
financial standing, servicing facilities, procedures and experienced personnel
necessary for the sound servicing of mortgage loans of the same types as may
from time to time constitute Mortgage Loans and in accordance with Accepted
Servicing Practices.
(y) Mortgage Loan Schedule. The information set forth in the
related Mortgage Loan Schedule and all other information or data furnished by,
or on behalf of, the Sellers to Buyer is complete, true and correct in all
material respects, and the Sellers acknowledge that Buyer has not verified the
accuracy of such information or data.
-38-
(z) Reserved.
(aa) No Reliance. Each Seller has made its own independent
decision to enter into the Repurchase Documents and each Transaction and as to
whether such Transaction is appropriate and proper for it based upon its own
judgment and upon advice from such advisors (including without limitation, legal
counsel and accountants) as it has deemed necessary. No Seller is relying upon
any advice from Buyer as to any aspect of the Transactions, including without
limitation, the legal, accounting or tax treatment of such Transactions.
(bb) Plan Assets. No Seller is an employee benefit plan as
defined in Section 3 of Title I of ERISA, or a plan described in Section
4975(e)(1) of the Code, and the Purchased Mortgage Loans are not "plan assets"
within the meaning of 29 CFR ss.2510.3-101 in the Sellers' hands.
(cc) Real Estate Investment Trust. Holdings has not engaged in
any material "prohibited transactions" as defined in Section 857(b)(6)(B)(iii)
and (C) of the Code or the requirements in any successor or replacement
provision in the Code, if any. Holdings for its current "tax year" (as defined
in the Code) is entitled to a dividends paid deduction under the requirements of
Section 857 of the Code with respect to any dividends paid by it with respect to
each such year for which it claims a deduction in its Form 1120-REIT filed with
the United States Internal Revenue Service for such year, or the requirements in
any successor or replacement provision in the Code, if any.
(dd) Mortgage Loans. No Purchased Mortgage Loan was previously
purchased under the MLMCI Facility.
SECTION 12. COVENANTS
On and as of the date of this Repurchase Agreement and each
Purchase Date and until this Repurchase Agreement is no longer in force with
respect to any Transaction, each Seller covenants as follows:
(a) Preservation of Existence; Compliance with Law. Each
Seller shall:
(i) Preserve and maintain its legal existence and all of its
material rights, privileges, licenses and franchises necessary for the
operation of its business;
(ii) Comply with the requirements of all applicable laws,
rules, regulations and orders, whether now in effect or hereafter enacted
or promulgated by any applicable Governmental Authority (including, without
limitation, all environmental laws);
(iii) Maintain all licenses, permits or other approvals
necessary for such Seller to conduct its business and to perform its
obligations under the Repurchase Documents, and shall conduct its business
in accordance with applicable law;
(iv) Keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied;
and
-39-
(v) Permit representatives of the Buyer, upon reasonable
notice (unless an Event of Default shall have occurred and is continuing,
in which case, no prior notice shall be required), during normal business
hours, to examine, copy and make extracts from its books and records, to
inspect any of its Properties, and to discuss its business and affairs with
its officers, all to the extent reasonably requested by the Buyer.
(b) Taxes, Etc. The Sellers shall timely file all tax returns
that are required to be filed by them and shall timely pay all Taxes due, except
for any such Taxes as are being appropriately contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves have been provided. (c) Notice of Proceedings or Adverse Change. The
Sellers shall give notice to the Buyer immediately after a Responsible Officer
of any Seller has any knowledge of:
(i) the occurrence of any Default or Event of Default or
Termination Event;
(ii) any (a) default or event of default under any
Indebtedness of any Seller in an aggregate amount in excess of $1,000,000
or (b) litigation, investigation, regulatory action or proceeding that is
pending or threatened by or against any Seller in any federal or state
court or before any Governmental Authority which, if not cured or if
adversely determined, would reasonably be expected to have a Material
Adverse Effect or constitute a Default or Event of Default, and (c) any
Material Adverse Effect with respect to any Seller;
(iii) any litigation or proceeding that is pending or
threatened against (a) any Seller in which the amount involved exceeds
$1,000,000 and is not covered by insurance, in which injunctive or similar
relief is sought, or which, would reasonably be expected to have a Material
Adverse Effect and (b) any litigation or proceeding that is pending or
threatened in connection with any of the Repurchase Assets, which, if
adversely determined, would reasonably be expected to have a Material
Adverse Effect;
(iv) and, as soon as reasonably possible, notice of any of the
following events:
(A) a change in the insurance coverage of any Seller,
with a copy of evidence of same attached;
(B) any material adverse change in accounting policies or
financial reporting practices of any Seller;
(C) promptly upon receipt of notice or knowledge of any
Lien or security interest (other than security interests
created hereby or under any other Repurchase Document) on, or
claim asserted against, any of the Repurchase Assets; and
(D) any other event, circumstance or condition that has
resulted, or has a possibility of resulting, in a Material
Adverse Effect; and
-40-
(v) Promptly, but no later than five (5) Business Days after
any Seller receives any of the same, deliver to the Buyer a true, complete,
and correct copy of any schedule, report, notice, or any other document
delivered to such Seller by any Person pursuant to, or in connection with,
any of the Repurchase Assets.
(d) Financial Reporting. Each Seller shall maintain a system
of accounting established and administered in accordance with GAAP, and furnish
to the Buyer: (i) Within one hundred twenty (120) days after the close of each
fiscal year, Financial Statements, including a statement of income and changes
in shareholders' equity of the Sellers for such year, and the related balance
sheet as at the end of such year, all in reasonable detail and accompanied by an
opinion of an accounting firm as to said financial statements;
(ii) Within sixty (60) days after the close of each of the
Sellers' first three fiscal quarters in each fiscal year unaudited balance
sheets and income statements, for the period from the beginning of such
fiscal year to the end of such fiscal year, subject, however, to year end
adjustments;
(iii) Within thirty (30) days after the end of each calendar
month, the unaudited balance sheets of the Sellers as at the end of such
period and the related unaudited consolidated statements of income and
retained earnings and of cash flows for the Sellers for such period and the
portion of the fiscal year through the end of such period, subject,
however, to year end adjustments;
(iv) Simultaneously with the furnishing of each of the
Financial Statements to be delivered pursuant to subsection (ii) above, or
monthly upon Buyer's request, a certificate in the form of Exhibit VIII
hereto and certified by a Responsible Officer of such Seller;
(v) If applicable, copies of any 10-Ks, 10-Qs, registration
statements and other "corporate finance" SEC filings (other than 8-Ks) by
such Seller, within 5 Business Days of their filing with the SEC; provided,
that, such Seller or any Affiliate will provide the Buyer with a copy of
the annual 10-K filed with the SEC by such Seller or its Affiliates, no
later than 90 days after the end of the year; and
(vi) Promptly, from time to time, such other information
regarding the business affairs, operations and financial condition of such
Seller as the Buyer may reasonably request.
(e) Visitation and Inspection Rights. Subject to the
provisions of Section 27, the Sellers shall permit the Buyer to inspect, and to
discuss with a Seller's officers, agents and auditors, the affairs, finances,
and accounts of a Seller, the Repurchase Assets, and the Sellers' books and
records, and to make abstracts or reproductions thereof and to duplicate, reduce
to hard copy or otherwise use any and all computer or electronically stored
information or data, in each case, (i) during normal business hours, (ii) upon
reasonable notice (provided, that upon the occurrence of an Event of Default, no
notice shall be required), and (iii) at the expense of the Sellers to discuss
with its officers, its affairs, finances, and accounts.
-41-
(f) Reimbursement of Expenses. On the date of execution of
this Repurchase Agreement, the Sellers shall reimburse the Buyer for all
expenses incurred by the Buyer on or prior to such date. From and after such
date, the Sellers shall promptly reimburse the Buyer for all expenses as the
same are incurred by the Buyer and within thirty (30) days of the receipt of
invoices therefor.
(g) Further Assurances. The Sellers shall execute and deliver
to the Buyer all further documents, financing statements, agreements and
instruments, and take all further action that may be required under applicable
law, or that the Buyer may reasonably request, in order to effectuate the
transactions contemplated by this Repurchase Agreement and the Repurchase
Documents or, without limiting any of the foregoing, to grant, preserve, protect
and perfect the validity and first-priority of the security interests created or
intended to be created hereby. The Sellers shall do all things necessary to
preserve the Repurchase Assets so that they remain subject to a first priority
perfected security interest hereunder. Without limiting the foregoing, the
Sellers will comply with all rules, regulations, and other laws of any
Governmental Authority and cause the Repurchase Assets to comply with all
applicable rules, regulations and other laws. The Sellers will not allow any
default for which the Sellers are responsible to occur under any Repurchase
Assets or any Repurchase Document and the Sellers shall fully perform or cause
to be performed when due all of its obligations under any Repurchase Assets or
the Repurchase Documents.
(h) True and Correct Information. All information, reports,
exhibits, schedules, financial statements or certificates of any Seller or any
of its Affiliates thereof or any of their officers furnished to Buyer hereunder
and during Buyer's diligence of any Seller are and will be true and complete in
all material respects and do not omit to disclose any material facts necessary
to make the statements therein or therein, in light of the circumstances in
which they are made, not misleading. All required financial statements,
information and reports delivered by any Seller to the Buyer pursuant to this
Repurchase Agreement shall be prepared in accordance with GAAP, or if
applicable, to SEC filings, the appropriate SEC accounting requirements.
(i) ERISA Events.
(i) Promptly upon becoming aware of the occurrence of any
Event of Termination which together with all other Events of Termination
occurring within the prior 12 months involve a payment of money by or a
potential aggregate liability of the Sellers or any ERISA Affiliate thereof
or any combination of such entities in excess of $250,000 the Sellers shall
give the Buyer a written notice specifying the nature thereof, what action
the Sellers or any ERISA Affiliate thereof has taken and, when known, any
action taken or threatened by the Internal Revenue Service, the Department
of Labor or the PBGC with respect thereto;
(ii) Promptly upon receipt thereof, the Sellers shall furnish
to the Buyer copies of (i) all notices received by the Sellers or any ERISA
Affiliate thereof of the PBGC's intent to terminate any Plan or to have a
trustee appointed to administer any Plan; (ii) all notices received by the
Sellers or any ERISA Affiliate thereof from the sponsor of a Multiemployer
Plan pursuant to Section 4202 of ERISA involving a withdrawal liability in
excess of $250,000; and (iii) all funding waiver requests filed by the
Sellers or any
-42-
ERISA Affiliate thereof with the Internal Revenue Service with respect to
any Plan, the accrued benefits of which exceed the present value of the
plan assets as of the date the waiver request is filed by more than
$250,000, and all communications received by the Sellers or any ERISA
Affiliate thereof from the Internal Revenue Service with respect to any
such funding waiver request.
(j) Financial Condition Covenants.
(i) Maintenance of Tangible Net Worth. The Sellers, on a
consolidated basis, shall maintain a Tangible Net Worth of not less than
$175,000,000. At no time shall MortgageIT individually maintain a Tangible
Net Worth at the end of any two consecutive calendar quarters of less than
$25,000,000.
(ii) Maintenance of Ratio of Indebtedness to Tangible Net
Worth. The Sellers, on a consolidated basis, shall maintain the ratio of
Adjusted Indebtedness to Tangible Net Worth of no greater than 15:1 and the
ratio of Indebtedness to Tangible Net Worth no greater than 25:1.
(iii) Maintenance of Liquidity. The Sellers, on a consolidated
basis, shall ensure that, as of the end of each calendar month, they have
cash and Cash Equivalents in an amount not less than $20,000,000.
(k) RESERVED.
(l) No Adverse Selection. The Sellers shall not select
Eligible Mortgage Loans to be sold to Buyer as Purchased Mortgage Loans using
any type of adverse selection or other selection criteria which would adversely
affect the Buyer in any material respect.
(m) Mortgage Loan Schedule. On the Friday of each calendar
week (or if such date is not a Business Day, the next preceding Business Day),
or with such greater frequency as requested by Buyer, the Sellers shall provide
to Buyer, electronically, in a format mutually acceptable to Buyer, a Mortgage
Loan Schedule. The Sellers shall not cause the Purchased Mortgage Loans to be
serviced by any servicer other than a servicer expressly approved in writing by
Buyer, which approval shall be deemed granted by Buyer with respect to the
Sellers with the execution of this Repurchase Agreement.
(n) Insurance. The Sellers shall continue to maintain
insurance coverage with respect to employee dishonesty, forgery or alteration,
theft, disappearance and destruction, robbery and safe burglary, property (other
than money and securities) and computer fraud in an aggregate amount at least
equal to $2,000,000 with respect to errors and omissions insurance and
$5,000,000 with respect to blanket insurance policy. The Sellers shall maintain
a fidelity bond as required by applicable state regulations in respect of its
officers, employees and agents, with respect to any claims made in connection
with all or any portion of the Repurchase Assets. The Sellers shall notify the
Buyer of any material change in the terms of any such fidelity bond or insurance
policy.
(o) Books and Records. Each Seller shall, to the extent
practicable, maintain and implement administrative and operating procedures
(including, without limitation, an ability to
-43-
recreate records evidencing the Repurchase Assets in the event of the
destruction of the originals thereof), and keep and maintain or obtain, as and
when required, all documents, books, records and other information reasonably
necessary or advisable for the collection of all Repurchase Assets.
(p) Security Interest. The Sellers shall do all things
necessary to preserve the Repurchase Assets so that they remains subject to a
first priority perfected security interest hereunder. Without limiting the
foregoing, the Sellers will comply with all rules, regulations and other laws of
any Governmental Authority and cause the Repurchase Assets to comply with all
applicable rules, regulations and other laws. The Sellers will not allow any
default for which such Seller is responsible to occur under any Repurchase
Assets or any Repurchase Documents and such Seller shall fully perform or cause
to be performed when due all of its obligations under any Repurchase Assets or
the Repurchase Documents.
(q) Illegal Activities. No Seller shall engage in any conduct
or activity that could subject their respective assets to forfeiture or seizure.
(r) Material Change in Business. No Seller shall make any
material change in the nature of their respective businesses as carried on at
the date hereof.
(s) Limitation on Dividends and Distributions. Following the
occurrence and during the continuation of an Event of Default, no Seller shall
make any payment on account of, or set apart assets for, a sinking or other
analogous fund for the purchase, redemption, defeasance, retirement or other
acquisition of any equity interest of such Seller, whether now or hereafter
outstanding, or make any other distribution in respect of any of the foregoing
or to any shareholder or equity owner of such Seller, either directly or
indirectly, whether in cash or property or in obligations of such Seller or any
of such Seller's consolidated Subsidiaries.
(t) Disposition of Assets; Liens. No Seller shall create,
incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other
encumbrance of any nature whatsoever on any of the Repurchase Assets, whether
real, personal or mixed, now or hereafter owned, other than the Liens created in
connection with the transactions contemplated by this Repurchase Agreement; nor
shall such Seller cause any of the Purchased Mortgage Loans to be sold, pledged,
assigned or transferred, except for sales of Purchased Mortgage Loans to Takeout
Investors or pursuant to securitizations, provided that the proceeds therefrom
are remitted to Buyer in accordance with this Repurchase Agreement.
(u) Transactions with Affiliates. No Seller shall enter into
any transaction, including, without limitation, the purchase, sale, lease or
exchange of property or assets or the rendering or accepting of any service with
any Affiliate, unless such transaction is (a) not otherwise prohibited in this
Repurchase Agreement and (b) upon fair and reasonable terms no less favorable to
such Seller, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate.
(v) ERISA Matters.
(i) No Seller shall permit any event or condition which is
described in any of clauses (i) through (vii) of the definition of "Event
of Termination" to occur or exist with
-44-
respect to any Plan or Multiemployer Plan if such event or condition,
together with all other events or conditions described in the definition of
Event of Termination occurring within the prior 12 months, involves the
payment of money by or an incurrence of liability of such Seller or any
ERISA Affiliate thereof, or any combination of such entities in an amount
in excess of $250,000.
(ii) No Seller shall be an employee benefit plan as defined in
Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of
the Code and (b) the Sellers shall not use "plan assets" within the meaning
of 29 CFR ss.2510.3-101 to engage in this Repurchase Agreement or the
Transactions hereunder.
(w) Consolidations, Mergers and Sales of Assets. No Seller
shall (i) consolidate or merge with or into any other Person or (ii) sell, lease
or otherwise transfer all or substantially all of its assets to any other
Person; provided that such Seller may merge or consolidate with another Person
if such Seller is the Person surviving such merger and such Seller may sell
Purchased Mortgage Loans to Takeout Investors or pursuant to securitizations
provided that the proceeds therefrom are remitted to Buyer in accordance with
this Repurchase Agreement.
(x) Mortgage Loan Reports. Each Seller will furnish to Buyer
monthly electronic Mortgage Loan performance data, including, without
limitation, delinquency reports, pool analytic reports and static pool reports
(i.e., delinquency, foreclosure and net charge-off reports) and monthly
stratification reports summarizing the characteristics of the Mortgage Loans.
(y) Agency Approvals; Servicing. MortgageIT shall maintain its
status with Xxxxxx Xxx and Xxxxxx Xxx as an approved lender and Xxxxxxx Mac as
an approved seller, in each case in good standing (each such approval, an
"Agency Approval"). MortgageIT shall service or cause to be serviced, all
Mortgage Loans which are subject to an Agency Takeout Commitment in accordance
with the applicable Agency guide. Should MortgageIT, for any reason, cease to
possess all such applicable Agency Approvals to the extent necessary, or should
notification to the relevant Agency or to HUD, FHA or VA be required, MortgageIT
shall so notify Buyer immediately in writing. Notwithstanding the preceding
sentence, such Seller shall take all necessary action to maintain all of its
applicable Agency Approvals at all times during the term of this Repurchase
Agreement and each outstanding Transaction.
(z) Guarantees. No Seller shall create, incur, assume or
suffer to exist any Guarantees, except (i) to the extent reflected in such
Seller's financial statements or notes thereto and (ii) to the extent the
aggregate Guarantees of such Seller do not exceed, $2,000,000.
(aa) Takeout Payments. With respect to each Mortgage Loan
subject to a Takeout Commitment, the Sellers shall arrange that all payments
under the related Takeout Commitment shall be paid to the Settlement Account as
set forth in the Custodial Agreement, or to an account approved by the Buyer in
writing prior to such payment. With respect to any Agency Takeout Commitment, if
applicable, (1) with respect to the wire transfer instructions as set forth in
Xxxxxxx Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse Delivery)
such wire transfer instructions are identical to Buyer's wire instructions or
the Buyer has approved such wire transfer instructions in writing in its sole
discretion, or (2) the Payee Number set forth on Xxxxxx Mae Form 1068
(Fixed-Rate, Graduated-Payment, or Growing-
-45-
Equity Mortgage Loan Schedule) or Xxxxxx Xxx Form 1069 (Adjustable-Rate Mortgage
Loan Schedule), as applicable, is identical to the Payee Number that has been
identified by Buyer in writing as Buyer's Payee Number or the Buyer has approved
the related Payee Number in writing in its sole discretion; With respect to any
Takeout Commitment with an Agency for which the Agency is swapping the related
Mortgage Loans for a mortgage backed security, the applicable Agency documents
list Buyer as sole subscriber.
(bb) Underwriting Guidelines. Without the prior written
consent of Buyer, no Seller shall amend in any material respect or otherwise
modify the Underwriting Guidelines in any material respect. Without limiting the
foregoing, in the event that a Seller makes any amendment or modification to the
Underwriting Guidelines, such Seller shall promptly deliver to Buyer a complete
copy of the amended or modified Underwriting Guidelines.
(cc) HELOC Provisions. With respect to each HELOC, if a
Mortgagor requests an increase in the related Credit Limit, such Seller shall,
in its sole discretion, either accept or reject the Mortgagor's request in
accordance with such Seller's Underwriting Guidelines and notify the Buyer's
decision in writing. If the request for a Credit Limit increase is accepted by
such Seller, the increase will be effected by such Seller through modification
of the Mortgage Loan with the Mortgagor. Such Seller shall deliver to the Buyer
an updated Mortgage Loan Schedule reflecting the modification to the Mortgage
Loan and shall deliver any modified Mortgage Loan Documents to the Custodian.
(dd) Use of Proceeds. The Sellers shall not enter into
Transactions hereunder with the intent to apply any of the Purchase Price to the
outstanding repurchase price under the MLMCI Facility.
(ee) Mortgage Loans. The Sellers shall not enter into
Transactions hereunder with Mortgage Loans previously purchased under the MLMCI
Facility.
SECTION 13. EVENTS OF DEFAULT
Section 13.01 Events of Default. If any of the following
events (each an "Event of Default") occur, the Sellers and Buyer shall have the
rights set forth in Section 14, as applicable:
(a) any Seller shall default in the payment of the Repurchase
Price or Price Differential on its related Repurchase Date or Payment Date,
respectively, or any amount necessary to satisfy a Margin Deficit when due
pursuant to Section 4; or
(b) any Seller shall default in the payment of any other
amount payable by it hereunder or under any other Repurchase Document, or the
payment of Expenses or any other Obligations, when the same shall become due and
payable, whether at the due date thereof, or by acceleration or otherwise and
such failure to make such payment, in all instances set forth herein shall
continue unremedied for a period of three Business Days; or
-46-
(c) the failure of any Seller to perform, comply with or
observe any term, covenant or agreement applicable to such Seller contained in
Sections 12(a)(i), (h), (j), (n), (r), (s), (t), (u), (v), (w), (x), (y), (z),
(aa), (bb), (cc), (dd) or (ee); or
(d) any representation, warranty or certification made or
deemed made herein or in any other Repurchase Document by any Seller or any
certificate furnished to the Buyer pursuant to the provisions hereof or thereof
or any information with respect to the Purchased Mortgage Loans furnished in
writing by on behalf of any Seller shall prove to have been untrue or misleading
in any material respect as of the time made or furnished (other than the
representations and warranties set forth in Schedule 1, which shall be
considered solely for the purpose of determining the Market Value of the
Purchased Mortgage Loans; unless (i) any Seller shall have made any such
representations and warranties with actual knowledge that they were materially
false or misleading at the time made; or (ii) any such representations and
warranties have been determined in good faith by the Buyer in its sole
discretion to be materially false or misleading on a regular basis); or
(e) any Seller shall fail to observe or perform any other
covenant or agreement contained in this Repurchase Agreement (and not identified
in clause (b) of Section 13.01) or any other Repurchase Document, and if such
default shall be capable of being remedied, and such failure to observe or
perform shall continue unremedied for a period of 1 Business Day; or
(f) a judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate shall be rendered against any Seller or any of
its Material Subsidiaries by one or more courts, administrative tribunals or
other bodies having jurisdiction and the same shall not be satisfied, discharged
(or provision shall not be made for such discharge) or bonded, or a stay of
execution thereof shall not be procured, within 30 days from the date of entry
thereof, and any Seller nor any such Material Subsidiary shall, within said
period of 30 days, or such longer period during which execution of the same
shall have been stayed or bonded, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(g) any "event of default" or any other default which permits
a demand for, or requires, the early repayment of obligations due by any Seller
or its Material Subsidiaries under (i) any agreement (after the expiration of
any applicable grace period under any such agreement) relating to any
Indebtedness of any Seller or any Material Subsidiary, as applicable, to which
the Buyer or any Affiliate is a party or (iii) any agreement (after the
expiration of any applicable grace period under any such agreement) relating to
any Indebtedness of a Seller or any Material Subsidiary, as applicable in an
aggregate amount in excess of $1,000,000; or
(h) an Event of Insolvency shall have occurred with respect to
any Seller; or
(i) for any reason, this Repurchase Agreement at any time
shall not be in full force and effect in all material respects or shall not be
enforceable in all material respects in accordance with its terms, or any Lien
granted pursuant thereto shall fail to be perfected and of first priority, or
any Person (other than Buyer) shall contest the validity, enforceability,
perfection or priority of any Lien granted pursuant thereto, or any party
thereto (other than Buyer) shall seek to disaffirm, terminate, limit or reduce
its obligations hereunder; or
-47-
(j) any Seller shall grant, or suffer to exist, any Lien on
any Repurchase Asset (except any Lien in favor of the Buyer); or (A) the
Repurchase Assets shall not have been sold to the Buyer, or (B) the Liens
contemplated hereby shall cease or fail to be first priority perfected Liens on
any Repurchase Assets in favor of the Buyer or shall be Liens in favor of any
Person other than the Buyer; or
(k) any material adverse change in the Property, business,
prospects, financial condition or operations of any Seller or any of its
Material Subsidiaries shall occur, in each case as determined by Buyer in its
sole good faith discretion, or any other condition shall exist which, in Buyer's
sole good faith discretion, constitutes a material impairment of such Seller's
ability to perform its obligations under this Repurchase Agreement or any other
Repurchase Document; or
(l) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan of any Seller, (ii) any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall
arise on the assets of any Seller or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Plan of any Seller, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Buyer, likely to result in the termination of such Plan for purposes of Title IV
of ERISA, (iv) any Plan of any Seller shall terminate for purposes of Title IV
of ERISA, (v) any Seller or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Buyer is likely to, incur any liability in connection
with a withdrawal from, or the insolvency or reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect to a
Plan of any Seller; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(m) any change or development involving a prospective change
in taxation or other applicable law or regulation or interpretation thereof in
the United States directly affecting the Purchased Mortgage Loans or the
consequences of Buyer owning, or holding a security interest in, the Purchased
Mortgage Loans; the imposition of exchange controls by the United States, that
directly affects the Purchased Mortgage Loans or the consequences of Buyer
owning, or holding a security interest in, the Purchased Mortgage Loans; or the
imposition of exchange controls by the United States, that directly affects the
financial markets of the United States, and makes it, in the sole judgment of
Buyer, inadvisable or impracticable to enter into Transactions with the Mortgage
Loans; or
(n) any 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 any Seller as a "going concern" or a
reference of similar import; or
(o) The failure of Holdings to at any time continue to be (i)
qualified as a real estate investment trust as defined in Section 856 of the
Code and (ii) entitled to a dividend paid deduction under Section 857 of the
Code with respect to dividends paid by it with respect to each taxable year for
which it claims a deduction on its Form 1120 - REIT filed with the United
-48-
States Internal Revenue Service for such year, or the entering into by Holdings
of any material "prohibited transactions" as defined in Sections 857(b)(6) of
the Code; or
(p) The failure of Holdings to satisfy any of the following
asset or income tests and Buyer has delivered notice of an Event of Default to
Holdings with respect thereto:
(i) At the close of each taxable year, at least 75 percent of
Holdings' gross income (excluding gross income from prohibited
transactions) consists of (i) "rents from real property" within the meaning
of Section 856(c)(3)(A) of the Code or the requirements in any successor or
replacement provision in the Code, if any, (ii) interest on obligations
secured by mortgages on real property or on interests in real property,
within the meaning of Section 856(c)(3)(B) of the Code or the requirements
in any successor or replacement provision in the Code, if any, (iii) gain
from the sale or other disposition of real property (including interests in
real property and interests in mortgages on real property) which is not
property described in Section 1221(a)(1) of the Code, within the meaning of
Section 856(c)(3)(C) of the Code or the requirements in any successor or
replacement provision in the Code, if any, (iv) dividends or other
distributions on, and gain (other than gain from "prohibited transactions"
within the meaning of Section 857(b)(6)(B)(iii) of the Code) from the sale
or other disposition of, transferable shares (or transferable certificates
of beneficial interest) in other qualifying REITs within the meaning of
Section 856(d)(3)(D) of the Code or the requirements in any successor or
replacement provision in the Code, if any, and (v) amounts described in
Sections 856(c)(3)(E) through 856(c)(3)(I) of the Code or the requirements
in any successor or replacement provision in the Code, if any.
(ii) At the close of each taxable year, at least 95 percent of
Holdings' gross income (excluding gross income from prohibited
transactions) consists of (i) the items of income described in paragraph 1
hereof (other than those described in Section 856(c)(3)(I) of the Code or
the requirements in any successor or replacement provision in the Code, if
any), (ii) gain realized from the sale or other disposition of stock or
securities which are not property described in Section 1221(a)(1) of the
Code or the requirements in any successor or replacement provision in the
Code, if any, (iii) interest, (iv) dividends, and (v) income derived from
payments to Holdings on interest rate swap or cap agreements, options,
futures contracts, forward rate agreements and other similar financial
instruments entered into to reduce the interest rate risks with respect to
any indebtedness incurred or to be incurred to acquire or carry real estate
assets, or gain from the sale or other disposition of such an investment as
described in section 856(c)(5)(G), in each case within the meaning of
Section 856(c)(2) of the Code or the requirements in any successor or
replacement provision in the Code, if any.
(iii) At the close of each quarter of Holdings' taxable years,
at least 75 percent of the value of Holdings' total assets (as determined
in accordance with Treasury Regulations Section 1.856-2(d)) has consisted
of and will consist of real estate assets within the meaning of Sections
856(c)(4) and 856(c)(5)(B) of the Code, cash and cash items (including
receivables which arise in the ordinary course of Holdings' operations, but
not including receivables purchased from another person), and Government
-49-
Securities, or the requirements in any successor or replacement provision
in the Code, if any.
(iv) At the close of each quarter of each of Holdings' taxable
years, (1) (a) not more than 25 percent of Holdings' total asset value will
be represented by securities (other than those described in paragraph 3) ,
(b) not more than 20 percent of Holdings' total asset value will be
represented by securities of one or more taxable REIT subsidiaries, and (c)
(i) not more than 5 percent of the value of Holdings' total assets will be
represented by securities of any one issuer (other than Government
Securities and securities of taxable REIT subsidiaries), and (ii) Holdings
will not hold securities possessing more than 10 percent of the total
voting power or value of the outstanding securities of any one issuer
(other than Government Securities, securities of taxable REIT subsidiaries,
and securities of a qualified REIT subsidiary within the meaning of Section
856(i) of the Code) or (2) such other requirements as set forth in the Code
from time to time.
Section 13.02 Termination Event.
(a) If the following event (a "Termination Event") occurs, the
Buyer shall have the rights set forth in Section 13.02(b):
(i) the senior debt obligations or short-term debt obligations
of Xxxxxxx Xxxxx & Co., Inc. shall be rated below the four highest generic
grades (without regard to any pluses and minuses reflecting gradations
within such generic grades) by any nationally recognized statistical rating
organization; or
(ii) A Change of Control of any Seller shall have occurred; or
(iii) Xxxx Xxxxxx shall cease to be in a senior management
position of MortgageIT, and a replacement acceptable to the Buyer in its
sole discretion has not been secured within 180 days.
(b) Upon the occurrence of a Termination Event, the Buyer
shall have the right, in its sole discretion, to immediately terminate the
Buyer's agreement to enter into any additional Transactions on the terms of this
Agreement. With respect to the Termination Events set forth in Section 13.02(i)
and (ii), the Sellers shall repurchase any Purchased Mortgage Loans subject to a
Transaction hereunder within 60 days following receipt of a request therefor
from Buyer following the occurrence of such Termination Event.
SECTION 14. REMEDIES
(a) If an Event of Default occurs with respect to any Seller,
the following rights and remedies are available to the Buyer; provided, that an
Event of Default shall be deemed to be continuing unless expressly waived by the
Buyer in writing.
(i) At the option of the Buyer, exercised by written notice to
the Sellers (which option shall be deemed to have been exercised, even if
no notice is given, immediately
-50-
upon the occurrence of an Event of Insolvency of the Sellers), the
Repurchase Date for each Transaction hereunder, if it has not already
occurred, shall be deemed immediately to occur. The Buyer shall (except
upon the occurrence of an Act of Insolvency of the Sellers) give notice to
the Sellers of the exercise of such option as promptly as practicable.
(ii) If the Buyer exercises or is deemed to have exercised the
option referred to in subsection (a)(i) of this Section,
(A) the Sellers' obligations in such Transactions to
repurchase all Purchased Mortgage Loans, at the Repurchase
Price therefor on the Repurchase Date determined in accordance
with subsection (a)(i) of this Section, (1) shall thereupon
become immediately due and payable and (2) all Income paid
after such exercise or deemed exercise shall be retained by
the Buyer and applied to the aggregate unpaid Repurchase Price
and any other amounts owed by the Sellers hereunder;
(B) to the extent permitted by applicable law, the
Repurchase Price with respect to each such Transaction shall
be increased by the aggregate amount obtained by daily
application of, on a 360 day per year basis for the actual
number of days during the period from and including the date
of the exercise or deemed exercise of such option to but
excluding the date of payment of the Repurchase Price as so
increased, (x) the Post-Default Rate in effect following an
Event of Default to (y) the Repurchase Price for such
Transaction as of the Repurchase Date as determined pursuant
to subsection (a)(i) of this Section (decreased as of any day
by (i) any amounts actually in the possession of Buyer
pursuant to clause (C) of this subsection, and (ii) any
proceeds from the sale of Purchased Mortgage Loans applied to
the Repurchase Price pursuant to subsection (a)(iv) of this
Section; and
(C) all Income actually received by the Buyer pursuant
to Section 5 (excluding any Late Payment Fees paid pursuant to
Section 5(a)) shall be applied to the aggregate unpaid
Repurchase Price owed by the Sellers.
(iii) Upon the occurrence of one or more Events of Default,
the Buyer shall have the right to obtain physical possession of all files
of the Sellers relating to the Purchased Mortgage Loans and the Repurchase
Assets and all documents relating to the Purchased Mortgage Loans which are
then or may thereafter come in to the possession of the Sellers or any
third party acting for the Sellers and the Sellers shall deliver to the
Buyer such assignments as the Buyer shall request. The Buyer shall be
entitled to specific performance of all agreements of the Sellers contained
in the Repurchase Documents.
(iv) At any time on the Business Day following notice to the
Sellers (which notice may be the notice given under subsection (a)(i) of
this Section), in the event the Sellers have not repurchased all Purchased
Mortgage Loans, the Buyer may (A) immediately sell, without demand or
further notice of any kind, at a public or private
-51-
sale and at such price or prices as the Buyer may deem satisfactory any or
all Purchased Mortgage Loans and the Repurchase Assets subject to a such
Transactions hereunder and apply the proceeds thereof to the aggregate
unpaid Repurchase Prices and any other amounts owing by the Sellers
hereunder or (B) in its sole discretion elect, in lieu of selling all or a
portion of such Purchased Mortgage Loans, to give the Sellers credit for
such Purchased Mortgage Loans and the Repurchase Assets in an amount equal
to the Market Value of the Purchased Mortgage Loans against the aggregate
unpaid Repurchase Price and any other amounts owing by the Sellers
hereunder. The proceeds of any disposition of Purchased Mortgage Loans and
the Repurchase Assets shall be applied first to the costs and expenses
incurred by the Buyer in connection with such Seller's default; second to
costs of cover and/or related hedging transactions; third to the Repurchase
Price; and fourth to any other outstanding obligation of the Sellers to the
Buyer or its Affiliates.
(v) The Sellers shall be liable to Buyer for (i) the amount of
all reasonable legal or other expenses (including, without limitation, all
costs and expenses of Buyer in connection with the enforcement of this
Repurchase Agreement or any other agreement evidencing a Transaction,
whether in action, suit or litigation or bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally, further
including, without limitation, the reasonable fees and expenses of counsel
(including the costs of internal counsel of Buyer) incurred in connection
with or as a result of an Event of Default, (ii) damages in an amount equal
to the cost (including all fees, expenses and commissions) of entering into
replacement transactions and entering into or terminating hedge
transactions in connection with or as a result of an Event of Default, and
(iii) any other loss, damage, cost or expense directly arising or resulting
from the occurrence of an Event of Default in respect of a Transaction.
(vi) The Buyer shall have, in addition to its rights
hereunder, any rights otherwise available to it under any other agreement
or applicable law.
(b) Buyer may exercise one or more of the remedies available
to Buyer immediately upon the occurrence of an Event of Default and at any time
thereafter without notice to the Sellers. All rights and remedies arising under
this Repurchase Agreement as amended from time to time hereunder are cumulative
and not exclusive of any other rights or remedies which Buyer may have.
(c) Buyer may enforce its rights and remedies hereunder
without prior judicial process or hearing, and each Seller hereby expressly
waives any defenses such Seller might otherwise have to require Buyer to enforce
its rights by judicial process. Each Seller also waives any defense (other than
a defense of payment or performance) such Seller might otherwise have arising
from the use of nonjudicial process, enforcement and sale of all or any portion
of the Repurchase Assets, or from any other election of remedies. Each 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.
(d) To the extent permitted by applicable law, the Sellers
shall be liable to the Buyer for interest on any amounts owing by the Sellers
hereunder, from the date the Sellers
-52-
become liable for such amounts hereunder until such amounts are (i) paid in full
by the Sellers or (ii) satisfied in full by the exercise of the Buyer's rights
hereunder. Interest on any sum payable by the Sellers to the Buyer under this
paragraph 14(d) shall be at a rate equal to the Post-Default Rate.
(e) Upon the occurrence of an Event of Default, the Buyer may
obtain a life of loan, transferable real estate Tax Service Contract with an
Approved Tax Service Contract Provider on each Mortgage Loan at the sole cost
and expense of the Sellers.
(f) Upon the occurrence of a Default or Event of Default, the
Sellers shall provide to Buyer, within 24 hours of request for same, any
information requested by Buyer related to any PMI Policy or pool insurance, as
applicable, with respect to each Mortgage Loan covered by a PMI Policy or pool
insurance. Upon the Buyer's request, after the occurrence of a Default or Event
of Default, the Sellers shall deliver to Buyer (i) with respect to each Mortgage
Loan that is covered by a PMI Policy, a certified copy of such PMI Policy or
evidence of delegated underwriter approval and (ii) with respect to each
Mortgage Loan which is covered by pool insurance, a pool insurer pool
certification.
SECTION 15. INDEMNIFICATION AND EXPENSES; RECOURSE
(a) The Sellers agree to hold the Buyer, and its Affiliates
and their officers, directors, employees, agents and advisors (each an
"Indemnified Party") harmless from and indemnify any Indemnified Party against
all liabilities, losses, damages, judgments, costs and expenses of any kind
which may be imposed on, incurred by or asserted against such Indemnified Party
(collectively, "Costs"), relating to or arising out of this Repurchase
Agreement, any other Repurchase Document or any transaction contemplated hereby
or thereby, or any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Repurchase Agreement, any other Repurchase
Document or any transaction contemplated hereby or thereby, that, in each case,
results from anything other than the Indemnified Party's gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Sellers agree to hold any Indemnified Party harmless from and indemnify such
Indemnified Party against all Costs with respect to all Purchased Mortgage Loans
relating to or arising out of any taxes incurred or assessed in connection with
the ownership of the Purchased Mortgage Loans, that, in each case, results from
anything other than the Indemnified Party's gross negligence or willful
misconduct. In any suit, proceeding or action brought by an Indemnified Party in
connection with any Purchased Mortgage Loan for any sum owing thereunder, or to
enforce any provisions of any Purchased Mortgage Loan, the Sellers will save,
indemnify and hold such Indemnified Party harmless from and against all expense,
loss or damage suffered by reason of any defense, set-off, counterclaim,
recoupment or reduction or liability whatsoever of the account debtor or obligor
thereunder, arising out of a breach by the Sellers of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to or in favor of such account debtor or obligor or its successors from
the Sellers. The Sellers also agree to reimburse an Indemnified Party as and
when billed by such Indemnified Party for all the Indemnified Party's costs and
expenses incurred in connection with the enforcement or the preservation of the
Buyer's rights under this Repurchase Agreement, any other Repurchase Document or
any transaction contemplated hereby or thereby, including without limitation the
reasonable fees and disbursements of its counsel.
-53-
(b) The Sellers agree to pay as and when billed by the Buyer
all of the out-of-pocket costs and expenses incurred by the Buyer in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Repurchase Agreement, any other Repurchase
Document or any other documents prepared in connection herewith or therewith.
The Sellers agree to pay as and when billed by the Buyer all of the reasonable
out-of-pocket costs and expenses incurred in connection with the consummation
and administration of the transactions contemplated hereby and thereby including
without limitation filing fees and all the reasonable fees, disbursements and
expenses of counsel to the Buyer which amount shall be deducted from the
Purchase Price paid for the first Transaction hereunder. Subject to the
limitations set forth in Section 27 hereof, the Sellers agree to pay the Buyer
all the reasonable out of pocket due diligence, inspection, testing and review
costs and expenses incurred by the Buyer with respect to Purchased Mortgage
Loans submitted by the Sellers for purchase under this Repurchase Agreement,
including, but not limited to, those out of pocket costs and expenses incurred
by the Buyer pursuant to Sections 15(b) and 27 hereof.
(c) The obligations of the Seller from time to time to pay the
Repurchase Price, the Periodic Advance Repurchase Payments, and all other
amounts due under this Repurchase Agreement shall be full recourse obligations
of the Sellers.
(d) Each Seller shall be jointly and severally liable for the
full, complete and punctual performance and satisfaction of all obligations of
any Seller under this Repurchase Agreement. Accordingly, each Seller waives any
and all notice of creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by Buyer upon such Seller's joint
and several liability. Each Seller waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon such Seller
with respect to the Obligations. When pursuing its rights and remedies hereunder
against any Seller, Buyer may, but shall be under no obligation, to pursue such
rights and remedies hereunder against any Seller or any other Person or against
any collateral security for the Obligations or any right of offset with respect
thereto, and any failure by Buyer to pursue such other rights or remedies or to
collect any payments from such Seller or any such other Person to realize upon
any such collateral security or to exercise any such right of offset, or any
release of such Seller or any such other Person or any such collateral security,
or right of offset, shall not relieve such Seller of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of Buyer against such Seller.
SECTION 16. SERVICING
(a) The Sellers, on Buyer's behalf, shall contract with a
Servicer to, or if a Seller is the Servicer, such Seller shall, service the
Mortgage Loans consistent with the degree of skill and care that such Seller
customarily requires with respect to similar Mortgage Loans owned or managed by
it and in accordance with Accepted Servicing Practices. The Servicer shall (i)
comply with all applicable Federal, State and local laws and regulations, (ii)
maintain all state and federal licenses necessary for it to perform its
servicing responsibilities hereunder and (iii) not impair the rights of Buyer in
any Purchased Mortgage Loans or any payment thereunder. Buyer may terminate the
servicing of any Purchased Mortgage Loan with the then existing servicer in
accordance with Section 16(e) hereof.
-54-
(b) The Sellers shall cause the Servicer to hold or cause to
be held all escrow funds collected by the Sellers with respect to any Purchased
Mortgage Loans in trust accounts and shall apply the same for the purposes for
which such funds were collected.
(c) After Sellers receive notice from Buyer of the need to
deposit collections into the Collection Account, the Sellers shall cause the
Servicer to deposit all collections received by the Sellers on account of the
Purchased Mortgage Loans in the Collection Account no later than two Business
Days following receipt thereof.
(d) The Sellers shall provide promptly to Buyer (i) a Servicer
Notice addressed to and agreed to by the Servicer of the related Purchased
Mortgage Loans, advising such Servicer of such matters as Buyer may reasonably
request, including, without limitation, recognition by the Servicer of Buyer's
interest in such Purchased Mortgage Loans and the Servicer's agreement that upon
receipt of notice of an Event of Default from Buyer, it will follow the
instructions of Buyer with respect to the Purchased Mortgage Loans and any
related Income with respect thereto.
(e) Upon the occurrence of a Default or Event of Default
hereunder or a material default under the Servicing Agreement, Buyer shall have
the right to immediately terminate the Servicer's right to service the Purchased
Mortgage Loans without payment of any penalty or termination fee. The Sellers
shall cooperate in transferring the servicing of the Purchased Mortgage Loans to
a successor servicer appointed by Buyer in its sole discretion.
(f) If the Sellers should discover that, for any reason
whatsoever, any entity responsible to the Sellers by contract for managing or
servicing any such Purchased Mortgage Loan has failed to perform fully the
Sellers' obligations under the Repurchase Documents or any of the obligations of
such entities with respect to the Purchased Mortgage Loans, the Sellers shall
promptly notify Buyer.
SECTION 17. SINGLE AGREEMENT
Buyer and the Sellers 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 that each has been entered into in
consideration of the other Transactions. Accordingly, each of Buyer and the
Sellers 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, (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 Transaction hereunder; (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 and (iv) to promptly provide notice
to the other after any such set off or application.
-55-
SECTION 18. SET-OFF
In addition to any rights and remedies of the Buyer hereunder
and by law, the Buyer shall have the right, without prior notice to the Sellers,
any such notice being expressly waived by the Sellers to the extent permitted by
applicable law, upon any amount becoming due and payable by the Sellers
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by the Buyer or any Affiliate thereof to or for the credit or the
account of the Sellers or any Affiliate thereof. The Buyer agrees promptly to
notify the Sellers after any such set-off and application made by the Buyer;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
SECTION 19. NOTICES AND OTHER COMMUNICATIONS
Except as otherwise expressly permitted by this Repurchase
Agreement, all notices, requests and other communications provided for herein
(including without limitation any modifications of, or waivers, requests or
consents under, this Repurchase Agreement) shall be given or made in writing
(including without limitation by telecopy) delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof or thereof); or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. Except as
otherwise provided in this Repurchase Agreement and except for notices given
under Section 3 (which shall be effective only on receipt), all such
communications shall be deemed to have been duly given when transmitted by
telecopy or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 20. ENTIRE AGREEMENT; SEVERABILITY
This Repurchase Agreement, together with the Repurchase
Documents, constitute the entire understanding between Buyer and the Sellers
with respect to the subject matter they cover and shall supersede any existing
agreements between the parties containing general terms and conditions for
repurchase transactions involving Purchased Mortgage Loans. By acceptance of
this Repurchase Agreement, Buyer and Sellers acknowledge that they have not
made, and are not relying upon, any statements, representations, promises or
undertakings not contained in this Repurchase Agreement. 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.
SECTION 21. NON-ASSIGNABILITY
The rights and obligations of the parties under this
Repurchase Agreement and under any Transaction shall not be assigned by any
Seller without the prior written consent of Buyer. Subject to the foregoing,
this Repurchase Agreement and any Transactions shall be
-56-
binding upon and shall inure to the benefit of the parties and their respective
successors and assigns. Nothing in this Repurchase Agreement express or implied,
shall give to any Person, other than the parties to this Repurchase Agreement
and their successors hereunder, any benefit of any legal or equitable right,
power, remedy or claim under this Repurchase Agreement. Buyer may from time to
time with the prior written consent of the Sellers (which consent will not be
unreasonably withheld (provided that such consent shall not be required with
respect to an assignment to any Affiliate of the Buyer or if an Event of Default
shall have occurred and is continuing)) assign all or a portion of its rights
and obligations under this Repurchase Agreement and the Repurchase Documents;
provided, however that Buyer shall maintain, for review by the Sellers upon
written request, a register of assignees and a copy of an executed assignment
and acceptance by Buyer and assignee ("Assignment and Acceptance"), specifying
the percentage or portion of such rights and obligations assigned. Upon such
assignment, (a) such assignee shall be a party hereto and to each Repurchase
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 be released from its obligations
hereunder and under the Repurchase Documents. Unless otherwise stated in the
Assignment and Acceptance, the Sellers 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 Sellers.
The Buyer may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under this Repurchase
Agreement; provided, however, that (i) the Buyer's obligations under this
Repurchase Agreement shall remain unchanged, (ii) the Buyer shall remain solely
responsible to the other parties hereto for the performance of such obligations;
and (iii) the Sellers shall continue to deal solely and directly with the Buyer
in connection with the Buyer's rights and obligations under this Repurchase
Agreement and the other Repurchase Documents. Notwithstanding the terms of
Sections 6,7 and 8, each participant of the Buyer shall be entitled to the
additional compensation and other rights and protections afforded the Buyer
under Sections 6,7 and 8 to the same extent as the Buyer would have been
entitled to receive them with respect to the participation sold to such
participant.
The Buyer may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
21, disclose to the assignee or participant or proposed assignee or participant,
as the case may be, any information relating to the Sellers or any of its
Subsidiaries or to any aspect of the Transactions that has been furnished to the
Buyer by or on behalf of the Sellers or any of their Subsidiaries; provided that
such assignee or participant agrees to hold such information subject to the
confidentiality provisions of this Repurchase Agreement.
The Buyer may at any time create a security interest in all or
any portion of its rights under this Repurchase Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Buyer from its
obligations hereunder.
-57-
In the event the Buyer assigns all or a portion of its rights
and obligations under this Repurchase Agreement, the parties hereto agree to
negotiate in good faith an amendment to this Repurchase Agreement to add agency
provisions similar to those included in repurchase agreements for similar
syndicated repurchase facilities.
SECTION 22. TERMINABILITY
Each representation and warranty made or deemed to be made by
entering into a Transaction, herein or pursuant hereto shall survive the making
of such representation and warranty, and the Buyer shall not be deemed to have
waived any Default that may arise because any such representation or warranty
shall have proved to be false or misleading, notwithstanding that the Buyer may
have had notice or knowledge or reason to believe that such representation or
warranty was false or misleading at the time the Transaction was made.
Notwithstanding any such termination or the occurrence of an Event of Default,
all of the representations and warranties and covenants hereunder shall continue
and survive. The obligations of the Sellers under Section 15 hereof shall
survive the termination of this Repurchase Agreement.
SECTION 23. GOVERNING LAW
THIS REPURCHASE AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW
PRINCIPLES THEREOF.
SECTION 24. SUBMISSION TO JURISDICTION; WAIVERS
BUYER AND EACH SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(I) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS REPURCHASE AGREEMENT AND THE OTHER REPURCHASE
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(II) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE
BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS
BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
-58-
(III) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH
OTHER ADDRESS OF WHICH THE BUYER SHALL HAVE BEEN NOTIFIED; AND
(IV) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
(V) THE BUYER AND EACH SELLER HEREBY IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS REPURCHASE
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 25. NO WAIVERS, ETC.
No failure on the part of the Buyer to exercise and no delay
in exercising, and no course of dealing with respect to, any right, power or
privilege under any Repurchase Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under any
Repurchase Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The remedies provided herein
are cumulative and not exclusive of any remedies provided by law. An Event of
Default shall be deemed to be continuing unless expressly waived by the Buyer in
writing.
SECTION 26. RESERVED
SECTION 27. DUE DILIGENCE
The Sellers acknowledge that Buyer has the right to perform
continuing due diligence reviews with respect to the Mortgage Loans and the
Sellers, for purposes of verifying compliance with the representations,
warranties and specifications made hereunder, or otherwise, and the Sellers
agree that upon reasonable prior notice unless an Event of Default shall have
occurred, in which case no notice is required, to the Sellers, Buyer or its
authorized representatives will be permitted during normal business hours to
examine, inspect, and make copies and extracts of, the Mortgage Files and any
and all documents, records, agreements, instruments or information relating to
such Mortgage Loans in the possession or under the control of the Sellers and/or
the Custodian. The Sellers also shall make available to Buyer a knowledgeable
financial or accounting officer for the purpose of answering questions
respecting the Mortgage Files and the Mortgage Loans. Without limiting the
generality of the foregoing, the Sellers acknowledge that Buyer may purchase
Mortgage Loans from the Sellers based solely upon the information provided by
the Sellers to Buyer in the Purchased Mortgage Loan Schedule
-59-
and the representations, warranties and covenants contained herein, and that
Buyer, at its option, has the right at any time to conduct a partial or complete
due diligence review on some or all of the Mortgage Loans purchased in a
Transaction, including, without limitation, ordering broker's price opinions,
new credit reports and new appraisals on the related Mortgaged Properties and
otherwise re-generating the information used to originate such Mortgage Loan.
Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon
third party underwriter to perform such underwriting. The Sellers agree to
cooperate with Buyer and any third party underwriter in connection with such
underwriting, including, but not limited to, providing Buyer and any third party
underwriter with access to any and all documents, records, agreements,
instruments or information relating to such Mortgage Loans in the possession, or
under the control, of the Sellers. The Sellers further agree that the Sellers
shall pay all out-of-pocket costs and expenses incurred by Buyer in connection
with Buyer's activities pursuant to this Section 27 ("Due Diligence Costs");
provided, that such Due Diligence Costs shall not exceed $20,000 per calendar
year unless a Default or Event of Default shall have occurred, in which event
Buyer shall have the right to perform due diligence, at the sole expense of
Sellers without regard to the dollar limitation set forth herein.
SECTION 28. COMMITMENT FEE
The Seller shall pay the Buyer in immediately available funds,
due and owing on the date hereof (and upon each extension, if the Repurchase
Agreement has not been terminated), the Commitment Fee, which shall be prorated
for the number of days remaining prior to the Termination Date. Such payment
shall be made in Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to Buyer at such account designated by Buyer.
SECTION 29. RESERVED
SECTION 30. BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT
(a) Each Seller hereby irrevocably constitutes and appoints
the Buyer and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and authority
in the place and stead of such Seller and in the name of such Seller or in its
own name, from time to time in the Buyer's discretion, for the purpose of
carrying out the terms of this Repurchase Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be reasonably necessary or desirable to accomplish the purposes of this
Repurchase Agreement, and, without limiting the generality of the foregoing,
such Seller hereby gives the Buyer the power and right, on behalf of such
Seller, without assent by, but with notice to, such Seller, if an Event of
Default shall have occurred and be continuing, to do the following:
(i) in the name of such Seller, or in its own name, or
otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys
due with respect to any other Repurchase Assets and to file any claim or to
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Buyer for the purpose of collecting any
and all such moneys due with respect to any other Repurchase Assets
whenever payable;
-60-
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Repurchase Assets;
(iii) (A) to direct any party liable for any payment under any
Repurchase Assets to make payment of any and all moneys due or to become
due thereunder directly to the Buyer or as the Buyer shall direct; (B) to
ask or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Repurchase Assets; (C) to sign and endorse
any invoices, assignments, verifications, notices and other documents in
connection with any Repurchase Assets; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Repurchase Assets or any proceeds thereof and
to enforce any other right in respect of any Repurchase Assets; (E) to
defend any suit, action or proceeding brought against such Seller with
respect to any Repurchase Assets; (F) to settle, compromise or adjust any
suit, action or proceeding described in clause (E) above and, in connection
therewith, to give such discharges or releases as the Buyer may deem
appropriate; and (G) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any Repurchase Assets as
fully and completely as though the Buyer were the absolute owner thereof
for all purposes, and to do, at the Buyer's option and such Seller's
expense, at any time, and from time to time, all acts and things which the
Buyer deems necessary to protect, preserve or realize upon the Repurchase
Assets and the Buyer's Liens thereon and to effect the intent of this
Repurchase Agreement, all as fully and effectively as such Seller might do.
(b) Each Seller hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
(c) Each Seller also authorizes the Buyer, if an Event of
Default shall have occurred, from time to time, to execute, in connection with
any sale provided for in Section 14 hereof, any endorsements, assignments or
other instruments of conveyance or transfer with respect to the Repurchase
Assets.
(d) The powers conferred on the Buyer hereunder are solely to
protect the Buyer's interests in the Repurchase Assets and shall not impose any
duty upon it to exercise any such powers. The Buyer shall be accountable only
for amounts that it actually receives as a result of the exercise of such
powers, and neither it nor any of its officers, directors, employees or agents
shall be responsible to the Sellers for any act or failure to act hereunder,
except for its or their own gross negligence or willful misconduct.
SECTION 31. MISCELLANEOUS
(a) Counterparts. This Repurchase Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Repurchase
Agreement by signing any such counterpart.
-61-
(b) Captions. The captions and headings appearing herein are
for included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Repurchase Agreement.
(c) Acknowledgment. Each Seller hereby acknowledges that:
(i) it has been advised by counsel in the negotiation,
execution and delivery of this Repurchase Agreement and the other
Repurchase Documents;
(ii) the Buyer has no fiduciary relationship to the Sellers;
and
(iii) no joint venture exists between the Buyer and the
Sellers.
SECTION 32. CONFIDENTIALITY
The Buyer and each Seller hereby acknowledge and agree that
all written or computer-readable information provided by one party to any other
regarding the terms set forth in any of the Repurchase Documents or the
Transactions contemplated thereby (the "Confidential Terms") shall be kept
confidential and shall not be divulged to any party without the prior written
consent of such other party except to the extent that (i) it is necessary to do
so in working with legal counsel, auditors, taxing authorities or other
governmental agencies or regulatory bodies or in order to comply with any
applicable federal or state laws, (ii) any of the Confidential Terms are in the
public domain other than due to a breach of this covenant, or (iii) in the event
of an Event of Default the Buyer determines such information to be necessary or
desirable to disclose in connection with the marketing and sales of the
Purchased Mortgage Loans or otherwise to enforce or exercise the Buyer's rights
hereunder. Each of the parties hereto hereby acknowledges that the provisions of
the federal securities laws may restrict any Person who is in the possession of
material, non-public information regarding any company from purchasing or
selling securities of such company and from communicating such information to
any other Person under circumstances in which it is reasonably foreseeable that
such Person is likely to purchase or sell such securities. Each of the parties
hereto hereby agrees to abide by such laws as they relate to the other's
securities and confidential information. Notwithstanding the foregoing or
anything to the contrary contained herein or in any other Repurchase Document,
the parties hereto may disclose to any and all Persons, without limitation of
any kind, the U.S. federal, state and local tax treatment of the Transactions,
any fact relevant to understanding the U.S. federal, state and local tax
treatment of the Transactions, and all materials of any kind (including opinions
or other tax analyses) relating to such U.S. federal, state and local tax
treatment and that may be relevant to understanding such tax treatment; provided
that Sellers may not disclose the name of or identifying information with
respect to Buyer or any pricing terms (including, without limitation, the
Pricing Spread, Purchase Price Percentage, and Purchase Price) or other
nonpublic business or financial information (including any sublimits and
financial covenants) that is unrelated to the U.S. federal, state and local tax
treatment of the Transactions to the taxpayer and is not relevant to
understanding the U.S. federal, state and local tax treatment of the
Transactions to the taxpayer, without the prior written consent of the Buyer.
The provisions set forth in this Section 32 shall survive the termination of
this Repurchase Agreement.
-62-
SECTION 33. 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 Mortgage Loans
subject to such Transaction or the term of such Transaction would render such
definition inapplicable), and a "securities contract" as that term is defined in
Section 741 of Title 11 of the United States Code, as amended (except insofar as
the type of assets subject to such Transaction would render such definition
inapplicable).
(b) It is understood that either party's right to liquidate
Mortgage Loans 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.
(c) The parties agree and acknowledge that if a party hereto
is an "insured depository institution," as such term is defined in the Federal
Deposit Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a
"qualified financial contract," as that term is defined in FDIA and any rules,
orders or policy statements thereunder (except insofar as the type of assets
subject to such Transaction would render such definition inapplicable).
(d) It is understood that this Repurchase 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).
SECTION 34. 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;
(c) in the case of Transactions in which one of the parties is
a financial institution, funds held by the financial institution pursuant to a
Transaction hereunder are not a deposit and therefore are not insured by the
Federal Deposit Insurance Corporation or the National Credit Union Share
Insurance Fund, as applicable; and
-63-
(d) this Repurchase Agreement is intended to be a "repurchase
agreement" and a "securities contract," within the meaning of Section 555 and
Section 559 under the Bankruptcy Code.
SECTION 35. CONFLICTS
In the event of any conflict between the terms of this
Repurchase Agreement, any other Repurchase Document and any Confirmation, the
documents shall control in the following order of priority: first, the terms of
the Confirmation shall prevail, then the terms of this Repurchase Agreement
shall prevail, and then the terms of the Repurchase Documents shall prevail.
SECTION 36. AUTHORIZATIONS
Any of the persons whose signatures and titles appear on
Exhibit X are authorized, acting singly, to act for the Sellers or Buyer, as the
case may be, under this Repurchase Agreement.
SECTION 37. ACKNOWLEDGEMENT OF ANTI-PREDATORY LENDING POLICIES.
Buyer has in place internal policies and procedures that
expressly prohibit its purchase of any High Cost Mortgage Loan.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-64-
IN WITNESS WHEREOF, the parties have entered into this
Repurchase Agreement as of the date set forth above.
BUYER:
------
XXXXXXX XXXXX BANK USA
By: /s/ Xxxx Xxxxxxxxxx
-------------------
Name: Xxxx Xxxxxxxxxx
Title: Vice President
Address for Notices:
-------------------
4 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
SELLER:
-------
MORTGAGEIT, INC.
By: /s/ Xxxx X. Xxxx
----------------
Name: Xxxx X. Xxxx
Title: General Counsel and Secretary
Address for Notices:
-------------------
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
SELLER:
-------
MORTGAGEIT HOLDINGS, INC.
By: /s/ Xxxx X. Xxxx
----------------
Name: Xxxx X. Xxxx
Title: General Counsel and Secretary
Address for Notices:
--------------------
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Xxxx X. Xxxx
Telecopier No.: 000-000-0000
Telephone No: 000-000-0000
SELLER:
-------
MHL FUNDING CORP.
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Secretary
Address for Notices:
-------------------
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
SELLER:
-------
NEXT AT BAT LENDING, INC.
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Secretary
Address for Notices:
-------------------
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
SCHEDULE 1
----------
REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS
Each of the Sellers makes the following representations and
warranties to the Buyer, with respect to each Mortgage Loan, that as of the
Purchase Date for the purchase of any Purchased Mortgage Loans by the Buyer from
the Sellers and as of the date of this Repurchase Agreement and any Transaction
hereunder and at all times while the Repurchase Documents and any Transaction
hereunder is in full force and effect. For purposes of this Schedule 1 and the
representations and warranties set forth herein, a breach of a representation or
warranty shall be deemed to have been cured with respect to a Mortgage Loan if
and when a Seller has taken or caused to be taken action such that the event,
circumstance or condition that gave rise to such breach no longer adversely
affects such Mortgage Loan. With respect to those representations and warranties
which are made to the best of a Seller's knowledge, if it is discovered by such
Seller or the Buyer that the substance of such representation and warranty is
inaccurate, notwithstanding the such Seller's lack of knowledge with respect to
the substance of such representation and warranty, such inaccuracy shall be
deemed a breach of the applicable representation and warranty.
(a) Mortgage Loans as Described. The information set forth in
the related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to
the close of business on the Purchase Date for such Mortgage Loan under the
terms of the Mortgage Note have been made and credited. No payment required
under the Mortgage Loan is sixty (60) days or more past due nor has any payment
under the Mortgage Loan been sixty (60) days or more past due at any time since
the origination of the Mortgage Loan. The first Monthly Payment shall be made,
or shall have been made, with respect to the Mortgage Loan on its Due Date or
within the grace period, all in accordance with the terms of the related
Mortgage Note; and, if the Mortgage Loan is a Co-op Loan, no foreclosure action
or private or public sale under the Uniform Commercial Code has ever to the
knowledge of the Sellers, been threatened or commenced with respect to the Co-op
Loan;
(c) No Outstanding Charges. There are no delinquent taxes,
ground rents, water charges, sewer rents, governmental assessments, municipal
charges, insurance premiums, leasehold payments, including assessments payable
in future installments or other outstanding charges affecting the related
Mortgaged Property. The related Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required under
the Mortgage Loan, except for interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage Loan proceeds, whichever is later,
to the day which precedes by one month the Due Date of the first installment of
principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note
(and the Proprietary Lease and the Pledge Instruments with respect to each Co-op
Loan) and the Mortgage have not been impaired, waived, altered or modified in
any respect, except by written
Sch. 1-1
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage, and which have been delivered to the
Custodian; the substance of any such waiver, alteration or modification has been
approved by the insurer under the Primary Insurance Policy, if any, and the
title insurer, to the extent required by the related policy, and is reflected on
the related Mortgage Loan Schedule. No instrument of waiver, alteration or
modification has been executed, and no Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement approved by the
insurer under the Primary Insurance Policy, if any, the title insurer, to the
extent required by the policy, and which assumption agreement has been delivered
to the Custodian and the terms of which are reflected in the related Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Note and the Mortgage related to
such Mortgage Loan (and the Assignment of Lease Agreement related to each Co-op
Loan) are not subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury, nor will the operation of any of the
terms of the Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage unenforceable, in whole or in part, or subject
to any right of rescission, set-off, counterclaim or defense, including the
defense of usury and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto, and no Mortgagor was a debtor of
any state or federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated;
(f) Hazard Insurance. The Mortgaged Property is insured by a
fire and extended perils insurance policy, issued by a Qualified Insurer, and
such other hazards as are customary in the area where the Mortgaged Property is
located, and to the extent required by the related Seller as of the date of
origination consistent with the Underwriting Guidelines, against earthquake and
other risks insured against by Persons operating like properties in the locality
of the Mortgaged Property, in an amount not less than the greatest of (i) 100%
of the replacement cost of all improvements to the Mortgaged Property, (ii) the
outstanding principal balance of the Mortgage Loan, or (iii) the amount
necessary to avoid the operation of any co-insurance provisions with respect to
the Mortgaged Property, and consistent with the amount that would have been
required as of the date of origination in accordance with the Underwriting
Guidelines. If any portion of the Mortgaged Property is in an area identified by
any federal Governmental Authority as having special flood hazards, and flood
insurance is available, a flood insurance policy meeting the current guidelines
of the Federal Emergency Management Agency is in effect with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (1) (a) with respect to a Mortgage Loan other than a HELOC, the
outstanding principal balance of the Mortgage Loan or (b) with respect to a
HELOC, the Credit Limit of the HELOC (2) the full insurable value of the
Mortgaged Property, and (3) the maximum amount of insurance available under the
National Flood Insurance Act of 1968, as amended by the Flood Disaster
Protection Act of 1974. All such insurance policies (collectively, the "hazard
insurance policy") contain a standard mortgagee clause naming any Seller, its
successors and assigns (including, without limitation, subsequent owners of the
Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled
without 30 days' prior written notice to the mortgagee. No such notice has been
received by any Seller. All premiums on such insurance policy have been paid.
The related Mortgage obligates the Mortgagor to maintain all such insurance and,
at such Mortgagor's failure to do so, authorizes the mortgagee to maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement therefor
from such Mortgagor. Where
Sch. 1-2
required by state law or regulation, the Mortgagor has been given an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering a condominium, or
any hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer and is in full force and effect. No Seller has engaged in, nor has
any knowledge of the Mortgagor's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other Person, and no such unlawful items have
been received, retained or realized by any Seller;
(g) Compliance with Applicable Law. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and the Sellers
shall maintain or shall cause its agent to maintain in its possession, available
for the inspection of Buyer, and shall deliver to Buyer, upon demand, evidence
of compliance with all such requirements; (h) No Satisfaction of Mortgage. The
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, rescission or
release. No Seller has waived the performance by the Mortgagor of any action, if
the Mortgagor's failure to perform such action would cause the Mortgage Loan to
be in default, nor has any Seller waived any default resulting from any action
or inaction by the Mortgagor; (i) Valid First or Second Lien. The Mortgage is a
valid, subsisting, enforceable and perfected (a) with respect to each first lien
Mortgage Loan, first priority lien and first priority security interest, or (b)
with respect to each Second Lien Mortgage Loan, second priority lien and second
priority security interest, in each case, on the real property included in the
Mortgaged Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(A) the lien of current real property taxes and assessments
not yet due and payable;
(B) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and specifically
referred to in Buyer's title insurance policy delivered to the originator of the
Mortgage Loan and (a) referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such appraisal;
Sch. 1-3
(C) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property; and
(D) with respect to each Mortgage Loan which is a Second Lien
Mortgage Loan, a first lien on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting and enforceable (a) with respect to
each first lien Mortgage Loan, first priority lien and first priority security
interest, or (b) with respect to each Second Lien Mortgage Loan, second priority
lien and second priority security interest, in each case, on the property
described therein and each Seller has full right to pledge and assign the same
to Buyer. The Mortgaged Property was not, as of the date of origination of the
Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or
other security instrument creating a lien subordinate to the lien of the
Mortgage; with respect to each Co-op Loan, each Assignment of Lease Agreement
creates a valid, enforceable and subsisting first security interest in the
collateral securing the related Mortgage Note subject only to (a) the lien of
the related Co-op Corporation for unpaid assessments representing the obligor's
pro rata share of the Co-op Corporation's payments for its blanket mortgage,
current and future real property taxes, insurance premiums, maintenance fees and
other assessments to which like collateral is commonly subject and (b) other
matters to which like collateral is commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Assignment of Lease Agreement; provided, however, that the appurtenant
Proprietary Lease may be subordinated or otherwise subject to the lien of any
mortgage on the Co-op Project;
Validity of Mortgage Documents. The Mortgage Note and the Mortgage with
respect to the Mortgage Loan (and the Assignment of Lease Agreement with
respect to each Co-op Loan) and any other agreement executed and delivered by
a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan
are genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the Mortgage
Note, the Mortgage and any other such related agreement had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the
Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any
other such related agreement have been duly and properly executed by such
related parties.
With respect to each Co-op Loan, all parties to the Mortgage Note and the
Mortgage Loan had legal capacity to execute and deliver the Mortgage Note, the
Assignment of Lease Agreement, the Proprietary Lease, the Stock Power,
the Recognition Agreement, the Financing Statement and the Assignment of
Proprietary Lease and such documents have been duly and properly executed by
such parties; each Stock Power (i) has all signatures guaranteed or (ii)
if all signatures are not guaranteed, then such Co-op Shares will be
transferred by the stock transfer agent of the Co-op Corporation if the
Sellers undertake to convert the ownership of the collateral securing the
related
Co-op Loan. No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan. Each Seller has reviewed all of the
documents constituting the Mortgage File and has made such inquiries as it
deems
necessary to make and confirm the accuracy of the
Sch. 1-4
representations set forth herein. To the best of each Seller's knowledge, except
as disclosed to Buyer in writing, all tax identifications and property
descriptions are legally sufficient; and tax segregation, where required, has
been completed;
(k) Full Disbursement of Proceeds. Except with respect to
HELOCs, the proceeds of the Mortgage Loan have been fully disbursed to or for
the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(l) Ownershnip. The related Seller has full right to sell the
Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest, and has full right
and authority subject to no interest or participation of, or agreement with, any
other party, to sell each Mortgage Loan pursuant to this Repurchase Agreement
and following the sale of each Mortgage Loan (and with respect to any Co-op
Loan, the sole owner of the related Assignment of Lease Agreement), Buyer will
own such Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest except any such
security interest created pursuant to the terms of this Repurchase Agreement;
(m) Doing Business. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest, were)
(i) in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (ii) either (A)
organized under the laws of such state, (B) qualified to do business in such
state, (C) a federal savings and loan association, a savings bank or a national
bank having a principal office in such state, or (D) not doing business in such
state;
(n) Title Insurance. The Mortgage Loan is covered by either
(i) an attorney's opinion of title and abstract of title, the form and substance
of which is acceptable to prudent mortgage lending institutions making mortgage
loans in the area wherein the Mortgaged Property is located or (ii) an ALTA
lender's title insurance policy or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring each Seller, its successors and assigns, as to the first
priority lien or second priority lien, as applicable of the Mortgage, as
applicable in the amount of (a) with respect to a HELOC, the Credit Limit of the
HELOC or (b) with respect to a Mortgage Loan other than a HELOC, the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note provides
for negative amortization, the maximum amount of negative amortization in
accordance with the Mortgage), subject only to the exceptions contained in
clauses (A), (B), (C), and (D) of paragraph (i) of this Schedule 1, and in the
case of adjustable rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where
Sch. 1-5
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exception or to replace the standard survey exception
with a specific survey reading. The related Seller, its successors and assigns,
are the sole insureds of such lender's title insurance policy, and such lender's
title insurance policy is valid and remains in full force and effect and will be
in force and effect upon the consummation of the transactions contemplated by
this Repurchase Agreement. No claims have been made under such lender's title
insurance policy, and no prior holder or servicer of the related Mortgage,
including the related Seller, has done, by act or omission, anything which would
impair the coverage of such lender's title insurance policy, including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other Person, and no such unlawful items have been received,
retained or realized by the related Seller;
(o) No Defaults. There is no default, breach, violation or
event of acceleration existing under the Mortgage or the Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration, and related the Seller has not waived any default, breach,
violation or event of acceleration; and with respect to each Co-op Loan, there
is no default in complying with the terms of the Mortgage Note, the Assignment
of Lease Agreement and the Proprietary Lease and all maintenance charges and
assessments (including assessments payable in the future installments, which
previously became due and owing) have been paid, and the related Seller has the
right under the terms of the Mortgage Note, Assignment of Lease Agreement and
Recognition Agreement to pay any maintenance charges or assessments owed by the
Mortgagor;
(p) No Mechanics' Liens. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under law could give rise to such lien) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage; Location of Improvements;
(q) Encroachments. All improvements which were considered in
determining the Appraised Value of the related Mortgaged Property lay wholly
within the boundaries and building restriction lines of the Mortgaged Property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgage Property is in
violation of any applicable zoning law or regulation;
(r) Origination. The Mortgage Loan was originated by or in
conjunction with a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to s 203 and 211 of the National Housing Act, a savings and
loan association, a savings bank, a commercial bank, credit union, insurance
company or similar banking institution which is supervised and examined by a
federal or state authority. Principal payments on the Mortgage Loan commenced no
more than 60 days after (i) funds were disbursed in connection with the Mortgage
Loan or (ii)
Sch. 1-6
acquisition of the Mortgage Loan by any Seller. The Mortgage Interest Rate
is adjusted, with respect to adjustable rate Mortgage Loans, on each Interest
Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or
down to the nearest .125%), subject to the Mortgage Interest Rate Cap. The
Mortgage Note is payable on the first day of each month in equal monthly
installments of principal and interest, which installments of interest, with
respect to adjustable rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than 30 years from commencement of amortization. The Due Date (i) of the
first payment under the Mortgage Note is no more than 60 days from the date of
the Mortgage Note; or (ii) of the first payment under the Mortgage Note is no
more than 60 days from the date any Seller acquired the Mortgage Note;
(s) Payment Provisions. Other than with respect to HELOCs,
principal payments on the Mortgage Loan commenced no more than sixty days after
(i) the proceeds of the Mortgage Loan were disbursed or (ii) acquisition of the
Mortgage Loan by any Seller. The Mortgage Loan bears interest at the Mortgage
Interest Rate. With respect to each Mortgage Loan, the Mortgage Note is payable
on the first day of each month in Monthly Payments, which, in the case of a
Fixed Rate Mortgage Loan, are sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate, and, in the case of an Adjustable Rate Mortgage
Loan, are changed on each Adjustment Date, and in any case, are sufficient to
fully amortize the original principal balance over the original term thereof and
to pay interest at the related Mortgage Interest Rate. The Index for each
Adjustable Rate Mortgage Loan is as defined in the related Purchase Price and
Terms Letter. The Mortgage Note does not permit negative amortization. No
Mortgage Loan is a Convertible Mortgage Loan. With respect to HELOCs, the
related Mortgagor may request advances up to the Credit Limit within the first
ten years following the date of origination; each HELOC will amortize within
thirty (30) years from the date of origination;
(t) Customary Provisions. The Mortgage Note has a stated
maturity. The Mortgage contains customary and enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (i) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. Upon
default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale
of, the Mortgaged Property pursuant to the proper procedures, the holder of the
Mortgage Loan will be able to deliver good and merchantable title to the
Mortgaged Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged Property at
a trustee's sale or the right to foreclose the Mortgage. The Mortgage Note and
Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae;
(u) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination and collection practices used by the Sellers with
respect to each Mortgage Note and Mortgage have been in all respects legal,
proper, prudent and customary in the mortgage origination and servicing
industry. The Mortgage Loan has been serviced by the Sellers, the Servicer and
any predecessor servicer in accordance with the terms of the Mortgage Note. With
respect to escrow deposits and Escrow Payments, if any, all such payments are in
the possession
Sch. 1-7
of, or under the control of, the Sellers and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. No escrow deposits or Escrow Payments or other charges or
payments due the Sellers have been capitalized under any Mortgage or the related
Mortgage Note and no such escrow deposits or Escrow Payments are being held by
the related Seller for any work on a Mortgaged Property which has not been
completed. All Mortgage Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has been
properly paid and credited;
(v) Mortgaged Property Undamaged. The Mortgaged Property is
free of damage by fire, earthquake or earth movement, windstorm, flood, tornado
or other casualty and waste, and there is no proceeding pending for the total or
partial condemnation thereof;
(w) Customary Provisions. The Mortgage and related Mortgage
Note contain customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby, including,
(a) in the case of a Mortgage designated as a deed of trust, by trustee's sale,
and (b) otherwise by judicial foreclosure. The Mortgaged Property has not been
subject to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor
has not filed for protection under applicable bankruptcy laws. There is no
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage. The Mortgagor has not notified any Seller and no
Seller has any knowledge of any relief requested or allowed to the Mortgagor
under the Servicemembers Civil Relief Act of 2003;
(x) Conformance with Agency Standards. The Mortgage Loan was
underwritten in accordance with the underwriting guidelines in effect at the
time the Mortgage Loan was originated. The Mortgage Note and Mortgage are on
forms acceptable to Xxxxxx Xxx or Xxxxxxx Mac;
(y) No Additional Collateral. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
on the Mortgaged Property and the security interest of any applicable security
agreement or chattel mortgage referred to in (j) above;
(z) Appraisal. Except with respect to HELOCs originated in
accordance with the Underwriting Guidelines, the Mortgage File contains an
appraisal of the related Mortgaged Property which satisfied the standards of
Xxxxxx Mae and Xxxxxxx Mac and was made and signed, prior to the approval of the
Mortgage Loan application, by a qualified appraiser, duly appointed by the
related Seller, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, whose compensation is not
affected by the approval or disapproval of the Mortgage Loan and who met the
minimum qualifications of Xxxxxx Mae and Xxxxxxx Mac. Each appraisal of the
Mortgage Loan was made in accordance with the requirements of Title XI of the
Federal Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated;
Sch. 1-8
(aa) Deeds of Trust. In the event the Mortgage constitutes a
deed of trust, a trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Buyer to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(bb) No Buydown Provisions; No Graduated Payments or
Contingent Interests. Other than those Mortgage Loans acceptable for purchase by
an Agency, no Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Sellers, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(cc) Mortgagor Acknowledgment. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of fixed rate mortgage
loans in the case of Fixed Rate Mortgage Loans, and adjustable rate mortgage
loans in the case of Adjustable Rate Mortgage Loans and rescission materials
with respect to Refinanced Mortgage Loans, and such statement is and will remain
in the Mortgage File;
(dd) No Construction Loans. No Mortgage Loan was made for the
stated purpose of (a) the construction or rehabilitation of a Mortgaged Property
or (b) facilitating the trade-in or exchange of a Mortgaged Property;
(ee) Acceptable Investment. No Seller has any knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged Property
(or with respect to a Co-op Loan, the Assignment of Lease Agreement, the Co-op
Unit or the Co-op Project), the Mortgagor or the Mortgagor's credit standing
that can reasonably be expected to cause the Mortgage Loan to be an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value of the Mortgage Loan;
(ff) LTV, PMI Policy. No Mortgage Loan, other than a
Conforming Mortgage Loan, has an LTV ("loan-to-value" ratio) or CLTV ("combined
loan-to-value" ratio) in excess of 100%. No Conforming Mortgage Loan has an LTV
or CLTV in excess of the applicable Agency's approved limits. To the extent
required by the Underwriting Guidelines in effect at the time the Mortgage Loan
was originated, each Mortgage Loan with an LTV at origination in excess of 80%
is and will be subject to a lender paid Mortgage Insurance Policy or a Primary
Mortgage Insurance Policy, issued by a Qualified Insurer, which insures that
portion of the Mortgage Loan in excess of the portion of the Appraised Value of
the Mortgaged Property required by the applicable Underwriting Guidelines or
Agency. All provisions of such Primary Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. Any Mortgage subject to any such Primary Insurance
Policy obligates the Mortgagor thereunder to maintain such insurance and to pay
all premiums and charges in connection therewith. The Mortgage Interest Rate for
the Mortgage Loan does not include any such insurance premium;
Sch. 1-9
(gg) Capitalization of Interest. The Mortgage Note does not by
its terms provide for the capitalization or forbearance of interest.
(hh) No Equity Participation. No document relating to the
Mortgage Loan provides for any contingent or additional interest in the form of
participation in the cash flow of the Mortgaged Property or a sharing in the
appreciation of the value of the Mortgaged Property. The indebtedness evidenced
by the Mortgage Note is not convertible to an ownership interest in the
Mortgaged Property or the Mortgagor and no Seller has financed nor does it own
directly or indirectly, any equity of any form in the Mortgaged Property or the
Mortgagor.
(ii) Proceeds of Mortgage Loan. The proceeds of the Mortgage
Loan have not been and shall not be used to satisfy, in whole or in part, any
debt owed or owing by the Mortgagor to any Seller or any Affiliate or
correspondent of any Seller, except in connection with a refinanced Mortgage
Loan.
(jj) Origination Date. The date of any Mortgage Note is no
earlier than sixty (60) days prior to (i) the related Purchase Date or (ii) the
acquisition date by any Seller.
(kk) No Exception. The Custodian has not noted any material
exceptions on a Mortgage Loan Schedule and Exception Report with respect to any
Wet-Ink Mortgage Loan which would materially adversely affect the Mortgage Loan
or Buyer's interest in the Mortgage Loan and which are not cured by the related
Seller within seven (7) Business Days of receipt of the related Mortgage Note by
the Custodian.
(ll) Occupancy of Mortgaged Property. The Mortgaged Property
is lawfully occupied under applicable law; all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy, have been made or
obtained from the appropriate authorities;
(mm) No Misrepresentation or Fraud. No error, omission,
misrepresentation, negligence, fraud or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any person, including without
limitation the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination of the Mortgage Loan or in the application of
any insurance in relation to such Mortgage Loan;
(nn) Transfer of Mortgage Loans. Except with respect to
Mortgage Loans registered with MERS, the Assignment of Mortgage is in recordable
form and is acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located;
(oo) Consolidated Future Advances. Any principal advances made
to the Mortgagor have been, or, with respect to HELOCs, will be, consolidated,
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first lien or second lien, as applicable,
priority by a title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to
Xxxxxx Xxx and
Sch. 1-10
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount, or with respect to HELOCs, the Credit Limit, of the Mortgage
Loan;
(pp) No Balloon Payment. No Mortgage Loan has a balloon
payment feature;
(qq) Condominiums/ Planned Unit Developments. If the
Residential Dwelling on the Mortgaged Property is a condominium unit or a unit
in a planned unit development (other than a de minimis planned unit development)
such condominium or planned unit development project meets the eligibility
requirements of Xxxxxx Xxx and Xxxxxxx Mac including Xxxxxx Mae eligibility
requirements for sale to Xxxxxx Xxx or is located in a condominium or planned
unit development project which has received Xxxxxx Mae project approval and the
representations and warranties required by Xxxxxx Xxx with respect to such
condominium or planned unit development have been made and remain true and
correct in all respects;
(rr) Downpayment. The source of the down payment, if
applicable, with respect to each Mortgage Loan that the Underwriting Guidelines
require be verified, has been fully verified by the Sellers;
(ss) Calculation of Interest. Interest on each Mortgage Loan
is calculated on the basis of a 360-day year consisting of twelve 30-day months,
except with respect to FHA Loans, VA Loans and Mortgage Loans originated under
CAL-Rural or PERS loan programs, which shall be calculated on the basis of a
365-day year;
(tt) Environmental Matters. The Mortgaged Property is in
material compliance with all applicable local, state and federal environmental
laws, rules or regulations pertaining to environmental hazards including,
without limitation, asbestos, and no Seller nor, to any Seller's knowledge, the
related Mortgagor, has received any notice of any violation or potential
violation of such law nor is there any pending action or proceeding directly
involving any Mortgaged Property of which any Seller is aware in which
compliance with any environmental law, rule or regulation is an issue;
(uu) Predatory Lending Regulations; High Cost Loans. No
Mortgage Loan is (i) subject to Section 226.32 of Regulation Z or any similar
state law (relating to high interest rate/credit lending transactions), or (ii)
a High Cost Mortgage Loan;
(vv) Location and Type of Mortgaged Property. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a parcel of real property with a detached
single family residence erected thereon, or a two- to four-family dwelling, or
an individual condominium unit in a condominium project or an individual unit in
a planned unit development, provided, however, that any condominium project or
planned unit development shall conform with the applicable Xxxxxx Mae and
Xxxxxxx Mac requirements regarding such dwellings, and no residence or dwelling
is a mobile home or a manufactured dwelling. No portion of the Mortgaged
Property is used for commercial purposes;
(ww) Due on Sale. The Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgage thereunder;
Sch. 1-11
(xx) No Denial of Insurance. No action, inaction, or event has
occurred and no state of exists or has existed that has resulted or will result
in the exclusion from, denial of, or defense to coverage under any applicable
pool insurance policy, special hazard insurance policy, PMI Policy or bankruptcy
bond, irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other compensation
has been or will be received by any Seller or any designee of any Seller or any
corporation in which any Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance. The Sellers have
caused or will cause to be performed any and all acts required to preserve the
rights and remedies of the Buyer in any insurance policies applicable to the
Mortgage Loans including, without limitation, any necessary notifications of
insurers, assignments of policies or interests therein, and establishments of
coinsured, joint loss payee and mortgagee rights in favor of the Buyer;
(yy) Flood Certification Contract. The Sellers have obtained a
life of loan, transferable flood certification contract for each Mortgage Loan
and such contract is assignable without penalty, premium or cost to the Buyer;
(zz) Recordation. Each original Mortgage was recorded and,
except for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Buyer) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Sellers, or is in the process of being recorded;
(aaa) Simple Interest Mortgage Loans. Other than with respect
to HELOCs, none of the Mortgage Loans are simple interest Mortgage Loans;
(bbb) Documents Genuine. Such Purchased Mortgage Loan and all
accompanying collateral documents are complete and authentic and all signatures
thereon are genuine. Such Purchased Mortgage Loan is a "closed" loan fully
funded by the related Seller and held in such Seller's name.
(ccc) Bona Fide Loan. Such Purchased Mortgage Loan arose from
a bona fide loan, complying with all applicable State and Federal laws and
regulations, to persons having legal capacity to contract and is not subject to
any defense, set-off or counterclaim.
(ddd) Other Encumbrances. To the best of the related Seller's
knowledge, any property subject to any security interest given in connection
with such Purchased Mortgage Loan is not subject to any other encumbrances other
than a stated first mortgage, if applicable, and encumbrances which may be
allowed under the Underwriting Guidelines.
(eee) Description. Each Purchased Mortgage Loan conforms to
the description thereof as set forth on the related Mortgage Loan Schedule and
Exception Report delivered to the Custodian and Buyer.
(fff) Located in U.S. No collateral (including, without
limitation, the related real property and the dwellings thereon and otherwise)
relating to a Purchased Mortgage Loan is located in any jurisdiction other than
in one of the fifty (50) states of the United States of America or the District
of Columbia.
Sch. 1-12
(ggg) Prepayment Penalty. With respect to each Mortgage Loan
that has a Prepayment Penalty feature, each such Prepayment Penalty is
enforceable and will be enforced by the related Seller, and each Prepayment
Penalty is permitted pursuant to federal, state and local law. No Mortgage Loan
will impose a Prepayment Penalty for a term in excess of five years from the
date such Mortgage Loan was originated. Except as otherwise set forth on the
Mortgage Loan Schedule, with respect to each Mortgage Loan that contains a
Prepayment Penalty, such Prepayment Penalty is at least equal to the lesser of
(A) the maximum amount permitted under applicable law and (B) six months
interest at the related Mortgage Interest Rate on the amount prepaid in excess
of 20% of the original principal balance of such Mortgage Loan;
(hhh) Servicing Practices. Each Mortgage Loan has been
serviced in all material respects in compliance with those mortgage servicing
practices (including collection procedures) of prudent mortgage banking
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located; and
(iii) Single-Premium Credit Life Insurance. None of the
proceeds of the Mortgage Loan were used to finance single-premium credit
insurance policies;
(jjj) FICO Scores. Except for Mortgage Loans originated in
accordance with Agency guidelines whereby no FICO score is provided each
Mortgage Loan has a non-zero FICO score;
(kkk) Takeout Commitment. Each Conforming Mortgage Loan is
covered by a Take-out Commitment, which may be in the form of a "master" Takeout
Commitment, does not exceed the availability under such Take-out Commitment
(taking into consideration mortgage loans which have been purchased by the
respective Take-out Investor under the Take-out Commitment and mortgage loan
which related Seller has identified to Buyer as covered by such Take-out
Commitment) and conforms to the requirements and the specifications set forth in
such Take-out Commitment and the related regulations, rules, requirements and/or
handbooks of the applicable Take-out Investor and is eligible for sale to and
insurance or guaranty by, respectively the applicable Take-out Investor and
applicable insurer.
Each Takeout Commitment is a legal, valid and binding
obligation of related 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).
Each Agency Takeout Commitment designates the Buyer as the
payee of the purchase price thereunder;
(lll) FHA Mortgage Insurance; VA Loan Guaranty. With respect
to the FHA Loans, the FHA Mortgage Insurance Contract is in full force and
effect and there exists no impairment to full recovery without indemnity to the
Department of Housing and Urban Development or the FHA under FHA Mortgage
Insurance. With respect to the VA Loans, the VA Loan Guaranty Agreement is in
full force and effect to the maximum extent stated therein.
Sch. 1-13
All necessary steps have been taken to keep such guaranty or insurance valid,
binding and enforceable and each of such is the binding, valid and enforceable
obligation of the FHA and the VA, respectively, to the full extent thereof,
without surcharge, set-off or defense. Each FHA Loan and VA Loan was originated
in accordance with the criteria of an Agency for purchase of such Mortgage
Loans. Each Mortgage Loan which is represented to Buyer to have, or to be
eligible for, FHA insurance is insured, or eligible to be insured, pursuant to
the National Housing Act. Each Mortgage Loan which is represented by the related
Seller to be guaranteed, or to be eligible for guaranty, by the VA is
guaranteed, or eligible to be guaranteed, under the provisions of Chapter 37 of
Title 38 of the United States Code. As to each FHA insurance certificate or each
VA guaranty certificate, the related Seller has complied with applicable
provisions of the insurance for guaranty contract and federal statutes and
regulations, all premiums or other charges due in connection with such insurance
or guarantee have been paid, there has been no act or omission which would or
may invalidate any such insurance or guaranty, and the insurance or guaranty is,
or when issued, will be, in full force and effect with respect to each Mortgage
Loan. There are no defenses, counterclaims, or rights of setoff affecting the
Mortgage Loans or affecting the validity or enforceability of any private
mortgage insurance or FHA insurance applicable to the Mortgage Loans or any VA
guaranty with respect to the Mortgage Loans; and
(mmm) Revolving Period. Each HELOC provides for an initial
period (the "Revolving Period") during which the Mortgagor is required to make
monthly payments of interest payable in arrears and requires repayment of the
unpaid principal balance thereof over a period following the Revolving Period
(the "Repayment Period") which is not in excess of 120 months. As of the
Purchase Date no HELOC was in its Repayment Period. The Mortgage Interest Rate
on each Mortgage Loan adjusts periodically in accordance with the Credit Line
Agreement to equal the sum of the Index and the related Gross Margin. On each
Adjustment Date the related Seller has made interest rate adjustments on the
Mortgage Loan which are in compliance with the related Mortgage and Mortgage
Note and applicable law.
(nnn) Co-op Loan: Valid First Lien. With respect to each Co-op
Loan, the related Mortgage is a valid, enforceable and subsisting first security
interest on the related cooperative shares securing the related cooperative note
and lease, subject only to (a) liens of the cooperative for unpaid assessments
representing the Mortgagor's pro rata share of the cooperative's payments for
its blanket mortgage, current and future real property taxes, insurance
premiums, maintenance fees and other assessments to which like collateral is
commonly subject and (b) other matters to which like collateral is commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Security Agreement. There are no liens against or
security interests in the cooperative shares relating to each Co-op Loan (except
for unpaid maintenance, assessments and other amounts owed to the related
cooperative which individually or in the aggregate will not have a material
adverse effect on such Co-op Loan), which have priority equal to or over the
related Seller's security interest in such Co-op Shares;
(ooo) Co-op Loan: Compliance with Law. With respect to each
Co-op Loan, the related cooperative corporation that owns title to the related
cooperative apartment building is a "cooperative housing corporation" within the
meaning of Section 216 of the Internal Revenue Code, and is in material
compliance with applicable federal, state and local laws which, if not complied
with, could have a material adverse effect on the Mortgaged Property;
Sch. 1-14
(ppp) Co-op Loan: No Pledge. With respect to each Co-op Loan,
there is no prohibition against pledging the shares of the cooperative
corporation or assigning the Proprietary Lease. With respect to each Co-op Loan,
(i) the term of the related Proprietary Lease is longer than the term of the
Co-op Loan, (ii) there is no provision in any Proprietary Lease which requires
the Mortgagor to offer for sale the Co-op Shares owned by such Mortgagor first
to the Co-op Corporation, (iii) there is no prohibition in any Proprietary Lease
against pledging the Co-op Shares or assigning the Proprietary Lease and (iv)
the Recognition Agreement is on a form of agreement published by Aztech Document
Systems, Inc. as of the date hereof or includes provisions which are no less
favorable to the lender than those contained in such agreement; and
(qqq) Co-op Loan Acceleration of Payment. With respect to each
Co-op Loan, each Assignment of Lease Agreement contains enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for the
realization of the material benefits of the security provided thereby. The
Assignment of Lease Agreement contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Note
in the event the Co-op Unit is transferred or sold without the consent of the
holder thereof.
Sch. 1-15
SCHEDULE 2
----------
INDEBTEDNESS
WAREHOUSE LINES OF CREDIT
-------------------------
Credit Suisse First Boston Mortgage Capital LLC $ 400,000,000.00
Greenwich Capital Financial Products, Inc. $ 250,000,000.00
Residential Funding Corporation $ 400,000,000.00
UBS Warburg Real Estate Securities, Inc. $1,250,000,000.00
-----------------
$2,300,000,000.00
COLLATERALIZED DEBT OBLIGATIONS $2,229,829,168.00
-------------------------------
REPURCHASE AGREEMENTS
---------------------
UBS Securities LLC $ 83,475,000.00
NOTES PAYABLE
-------------
Technology Investment Capital Corp. $ 15,000,000.00
Sch. 2-1
EXHIBIT I
---------
FORM OF CONFIRMATION LETTER
[ ], 200
---------- -
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Attention:
Confirmation No.:
--------------------
Ladies/Gentlemen:
This letter confirms our oral agreement to purchase from you
the Mortgage Loans listed in Appendix I hereto, pursuant to the Master
Repurchase Agreement governing purchases and sales of Mortgage Loans between us,
dated as of June 8, 2005 (the "Agreement"), as follows:
Purchase Date:
Mortgage Loans to be Purchased: See Appendix I hereto.
[Appendix I to Confirmation Letter will list Mortgage Loans]
Aggregate Principal Amount of Purchased Mortgage Loans:
Purchase Price [Purchase Price Increase]:
Pricing Spread:
Repurchase Date:
Repurchase Price:
[Purchase Price Percentage:]
LIBOR Period:
Names and addresses for communications:
Buyer:
Xxxxxxx Xxxxx Bank USA
4 World Financial Center
10th Floor
Exh. X-0
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Seller:
MortgageIT, Inc.
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
Seller:
MortgageIT Holdings, Inc.
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
Seller:
MHL Funding Corp.
00 Xxxxxx Xxxx
0xx Xxxxx
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
Seller:
Next at Bat Lending, Inc.
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
XXXXXXX XXXXX BANK USA
By:
-----------------------------
Name:
Title:
Exh. I-2
Agreed and Acknowledged:
MORTGAGEIT, INC.
Seller
By:
-------------------------------------
Name:
Title:
MORTGAGEIT HOLDINGS, INC.
Seller
By:
-------------------------------------
Name:
Title:
MHL FUNDING CORP.
Seller
By:
-------------------------------------
Name:
Title:
NEXT AT BAT LENDING, INC.
Seller
By:
-------------------------------------
Name:
Title:
Exh. I-3
EXHIBIT II
----------
FORM OF OPINIONS
Xxxxxxx Xxxxx Bank USA
4 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
You have requested [our] [my] opinion as counsel to [MortgageIT, Inc.]
[MortgageIT Holdings, Inc.][MHL Funding Corp.] [Next at Bat Lending, Inc.], a
corporation organized and existing under the laws of [New York] [Maryland]
[Delaware] (the "Seller"), with respect to certain matters in connection with
that certain Master Repurchase Agreement governing purchases and sales of
certain Mortgage Loans, dated June 8, 2005 (the "Repurchase Agreement"), by and
among the Seller, MortgageIT, Inc., MortgageIT Holdings, Inc., MHL Funding
Corp., Next at Bat Lending, Inc. and Xxxxxxx Xxxxx Bank USA (the "Buyer"), that
certain Custodial Agreement, dated June 8, 2005 (the "Custodial Agreement") by
and among the Buyer, the Seller, MortgageIT, Inc., MortgageIT Holdings, Inc.,
MHL Funding Corp., Next at Bat Lending, Inc. and Deutsche Bank National Trust
Company, as custodian (the "Custodian") and that certain Collection Account
Agreement, dated as of June 8, 2005 (the "Collection Account Agreement") among
the Seller, MortgageIT, Inc., MortgageIT Holdings, Inc., MHL Funding Corp., Next
at Bat Lending, Inc., the Buyer and Deutsche Bank National Trust Company, as
bank (the "Bank"). The Repurchase Agreement, the Custodial Agreement and the
Collection Account Agreement are hereinafter collectively referred to as the
"Governing Agreements." Capitalized terms not otherwise defined herein have the
meanings set forth in the Repurchase Agreement.
[We] [I] have examined the following documents:
1. the Repurchase Agreement;
2. the Custodial Agreement;
3. an unfiled copy of each financing statement listed on
Schedule 1 (the "Financing Statements") naming the Seller as
Debtor and the Buyer as Secured Party and describing the
Repurchase Assets (as defined in the Repurchase Agreement) as
to which security interests may be perfected by filing under
the Uniform Commercial Code as in effect in the State of
_____ (the "Filing Collateral"), which [I] [we] understand
will be filed in the offices of the _____ (the "Filing
Offices");
4. the reports listed on Schedule 2 as to UCC financing
statements (collectively, the "UCC Search Report");
5. such other documents, records and papers as [we] [I] have
deemed necessary and relevant as a basis for this opinion.
Exh. II-1
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Seller contained in
the Repurchase Agreement. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1._______The Seller is a [_________________] duly organized,
validly existing and in good standing under the laws of the State of [New York]
[Maryland] [Delaware] and is qualified to transact business in, and is in good
standing under, the laws of the [State of __________].
2._______The Seller has all necessary corporate power to
authorize, execute and deliver, and to perform its obligations under, the
Governing Agreements.
3._______The execution, delivery and performance by the Seller of
the Governing Agreements to which it is a party, and the sales by the Seller and
the pledge of the Repurchase Assets under the Repurchase Agreement have been
duly authorized by all necessary corporate action on the part of the Seller.
Each of the Governing Agreements has been duly executed and delivered by the
Seller, and are legal, valid and binding agreements of the Seller enforceable
against the Seller in accordance with their respective terms, subject to
bankruptcy laws and other similar laws of general application affecting rights
of creditors and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none of which will
materially interfere with the realization of the benefits provided thereunder or
with the Buyer's purchase of the Purchased Mortgage Loans and/or security
interest in the Repurchase Assets.
4._______No consent, approval, authorization or order of, and no
filing or registration with, any court or governmental agency or regulatory body
is required on the part of the Seller for the execution, delivery or performance
by the Seller of the Governing Agreements to which it is a party or for the
sales by the Seller under the Repurchase Agreement or the sale of the Repurchase
Assets to the Buyer and/or granting of a security interest to the Buyer in the
Repurchase Assets, pursuant to the Repurchase Agreement.
5._______The execution, delivery and performance by the Seller
of, and the consummation by the Seller of the transactions contemplated by, the
Governing Agreements do not and will not (a) violate any provision of the
Seller's charter or by-laws, (b) violate any applicable law, rule or regulation,
(c) violate any order, writ, injunction or decree of any court or governmental
authority or agency or any arbitral award applicable to the Seller of which [I]
[we] have knowledge (after due inquiry) or (d) result in a breach of, constitute
a default under, require any consent under, or result in the acceleration or
required prepayment of any indebtedness pursuant to the terms of, any agreement
or instrument listed on Schedule 3 hereto, which the Seller has represented
lists all of the material agreements to which it is a party or by which, it is
bound or to which its or its properties is bound, or (except for the Liens
created pursuant to the Repurchase Agreement) result in the creation or
imposition of any Lien upon any Property of such party pursuant to the terms of
any such agreement or instrument.
Exh. II-2
6._______There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened against the Seller
which, in [our] [my] judgment, either in any one instance or in the aggregate,
would be reasonably likely to result in any material adverse change in the
properties, business or financial condition, or prospects of such party or in
any material impairment of the right or ability of such party to carry on its
business substantially as now conducted or in any material liability on the part
of such party or which would draw into question the validity of the Governing
Agreements to which it is a party or the Mortgage Loans or of any action taken
or to be taken in connection with the transactions contemplated thereby, or
which would be reasonably likely to impair materially the ability of such party
to perform under the terms of the Governing Agreements to which it is a party or
the Mortgage Loans.
7._______The Repurchase Agreement is effective to create, in
favor of the Buyer, either a valid sale of the Repurchase Assets to the Buyer or
a valid security interest under the Uniform Commercial Code in all of the right,
title and interest of the Seller in, to and under the Repurchase Assets as
collateral security for the payment of the Seller's obligations under the
Repurchase Agreement, except that (a) such security interests will continue in
Repurchase Assets after its sale, exchange or other disposition only to the
extent provided in Section 9-315 of the Uniform Commercial Code, (b) the
security interests in Repurchase Assets in which the Seller acquires rights
after the commencement of a case under the Bankruptcy Code in respect of the
Seller may be limited by Section 552 of the Bankruptcy Code
8. ______When the Purchased Mortgage Loans are delivered to the
[Buyer] [Custodian], the security interest referred to in Section 7 above in the
Mortgage Loans will constitute a fully perfected first priority security
interest in all right, title and interest of the Seller therein.
9._______(a) Upon the filing of the Financing Statement in the
Filing Office, the security interest referred to in Section 7 above will
constitute a fully perfected security interest under the Uniform Commercial Code
in all right, title and interest of the Seller in, to and under that portion of
the Repurchase Assets that can be perfected by filing under the Uniform
Commercial Code.
___________________________(b) The UCC Search Report sets forth
the proper filing offices and the proper debtor necessary to identify those
Persons who have on file in the jurisdictions listed on Schedule 1 financing
statements covering the Repurchase Assets as of the dates and times specified on
Schedule 2. The UCC Search Report identifies no Person who has filed in any
Filing Office a financing statement describing the Repurchase Assets prior to
the effective dates of the UCC Search Report.
10.______The provisions of the Collection Account Agreement are
effective to cause the security interest of the Buyer in the Collection Account
to be a fully perfected first-priority security interest therein.
11.______The Seller is not an "investment company", or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
Very truly yours,
Exh. II-3
EXHIBIT III
-----------
UCC FILING JURISDICTIONS
New York
Maryland
Delaware
Exh. III-1
EXHIBIT IV
----------
FORM OF COLLECTION ACCOUNT CONTROL AGREEMENT
COLLECTION ACCOUNT CONTROL AGREEMENT, dated as of June 8, 2005,
among Xxxxxxx Xxxxx Bank USA (the "Buyer"), MortgageIT, Inc., MortgageIT
Holdings, Inc., MHL Funding Corp., Next at Bat Lending, Inc. (the "Sellers") and
Deutsche Bank National Trust Company (the "Bank").
WHEREAS, the Sellers and the Buyer have entered into that certain
Repurchase Agreement, dated as of June 8, 2005, (the "Repurchase Agreement")
pursuant to which the Buyer may enter into a Transaction (as defined therein)
secured by, among other things, the payments made on account of Purchased
Mortgage Loans sold to the Buyer under the Repurchase Agreement
("Distributions");
WHEREAS, the Sellers have established that certain Collection
Account, Acct. No.[ ], subject to the security interest of the Buyer, [ABA# ],
which account is maintained in the name of the Sellers with the Bank pursuant to
the Repurchase Agreement (the "Collection Account");
WHEREAS, pursuant to the Transaction, all Distributions are
required to be deposited into the Collection Account identified below within two
(2) Business Days of receipt by the Sellers; and
WHEREAS, the Sellers have granted to the Buyer a security
interest in the Collection Account and all amounts held therein;
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 Capitalized Terms. Capitalized terms used but not
defined herein shall have the meanings assigned in the Repurchase Agreement.
Section 2 Transfers To and From Collection Account; Control. The
parties agree that: (a) Distributions received by the Bank for credit to the
Collection Account are, except as provided below, for application as instructed
by the Sellers; (b) the Bank shall transfer funds from the Collection Account in
accordance with such instructions until the Bank receives notice from the Buyer
that an event of default has occurred and is continuing under the Repurchase
Agreement or the Subsidiary Agreement (a "Notice of Event of Default"); and (c)
upon the Bank's receipt of a Notice of Event of Default, the Bank shall (i) in
no event (A) transfer funds from the Collection Account to the Sellers, (B) act
on the instruction of the Sellers, or (C) cause or permit withdrawals from the
Collection Account in any manner not approved by the Buyer in writing and (ii)
comply with instructions originated by the Buyer concerning the disposition of
funds in the Collection Account without further consent of the Sellers.
Section 3 Collection Account. The Bank hereby confirms and agrees
that:
Exh. IV-1
(a) The Bank shall not change the name or account number of the
Collection Account without the prior written consent of the Buyer;
(b) The Collection Account is a "deposit account" (within the
meaning of Section 9-102(a)(29) of the Uniform Commercial Code (the "UCC"));
(c) Without limitation on the Buyer's rights under Section 2
above, the Bank shall comply with any stop payment orders given by the Buyer
with respect to items presented for payment by the Sellers;
(d) There are no other agreements entered into between the Bank
and the Sellers with respect to the Collection Account;
(e) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with any other person relating to
the Collection Account and/or any funds held therein pursuant to which it has
agreed, or will agree, to comply with orders or instructions of such other
person; and
(f) It has not entered into, and until the termination of this
Agreement will not enter into, any agreement with the Sellers purporting to
limit or condition the obligation of the Bank to comply with orders and other
instructions of the Buyer as set forth in Sections 2(c)(ii) and 3(c) above.
Section 4 Subordination of Lien; Waiver of Set-Off.
(a) In the event that the Bank has or subsequently obtains by
agreement, by operation of law or otherwise a security interest in the
Collection Account or any funds held therein, the Bank hereby agrees that such
security interest shall be subordinate to the security interest of the Buyer.
The funds and other items deposited to the Collection Account will not be
subject to deduction, set-off, banker's lien, or any other right in favor of any
person other than the Buyer (except that the Bank may set off (i) all amounts
due to the Bank in respect of customary fees and expenses for the routine
maintenance and operation of the Collection Account and (ii) the face amount of
any checks which have been credited to the Collection Account but are
subsequently returned unpaid because of uncollected or insufficient funds, or
(iii) other returned items or mistakes made in crediting the Collection
Account).
(b)______The Sellers hereby authorize the Bank, without prior
notice, from time to time to debit any other account the Sellers may have with
the Bank for the amount due the Bank hereunder.
Section 5 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. REGARDLESS OF ANY PROVISION IN ANY OTHER
AGREEMENT, FOR PURPOSES OF THE UCC, NEW YORK SHALL BE DEEMED TO BE THE "BANK'S
JURISDICTION."
Section 6 Conflict with Other Agreements.
Exh. IV-2
(a) In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement between the Sellers and the Bank now
existing or hereafter entered into, the terms of this Agreement shall prevail.
(b) No amendment or modification of this Agreement or waiver of
any right hereunder shall be binding on any party hereto unless it is in writing
and is signed by all of the parties hereto.
Section 7 Adverse Claims. Except for the claims and interest of
the Buyer and of the Sellers in the Collection Account, the Bank does not know
of any claim to, or interest in, the Collection Account or in funds held
therein. If any person asserts any lien, encumbrance or adverse claim (including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Collection Account or against any funds held therein, the
Bank will promptly notify the Buyer and the Sellers thereof.
Section 8 Successors. The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives who obtain
such rights solely by operation of law.
Section 9 Notices. Any notice, request or other communication
required or permitted to be given under this Agreement shall be in writing and
deemed, to have been properly given when delivered in person, or when sent by
telecopy or other electronic means and electronic confirmation of error free
receipt is received, or three days after being sent by certified or registered
United States mail, return receipt requested, postage prepaid, addressed to the
party at the address set forth below:
Seller:
MortgageIT, Inc.
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
Seller:
MortgageIT Holdings, Inc.
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
Exh. IV-3
Seller:
MHL Funding Corp.
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
Seller:
Next at Bat Lending, Inc.
00 Xxxxxx Xxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx
Telecopier No.: 212.651.4862
Telephone No: 000.000.0000
with copies to the Buyer at the address below
Buyer:
Xxxxxxx Xxxxx Bank USA
4 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Bank:
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Mortgage Custody MG030C
Any party may change its address for notices in the manner set
forth above.
Section 10 Termination. The obligations of the Bank to the Buyer
pursuant to this Agreement shall continue in effect until the Buyer has notified
the Bank of such termination in writing. The Buyer agrees with the Sellers to
provide Notice of Termination in substantially the form of Exhibit A hereto to
the Bank on or after the termination of the Buyer's security interest in the
Collection Account pursuant to, or as otherwise provided by, the terms of the
Repurchase Agreement.
Exh. IV-4
Section 11 Limitation of Liability; Indemnification of the Bank.
The Sellers and the Buyer hereby agree that (a) the Bank is released from any
and all liabilities to the Sellers and the Buyer arising from the terms of this
Agreement and the compliance of the Bank with the terms hereof, except to the
extent that such liabilities arise from the Bank's bad faith, willful misconduct
or gross negligence and (b) the Sellers, their respective successors and assigns
shall at all times indemnify and save harmless the Bank from and against any
loss, liability or expense incurred without bad faith, willful misconduct or
gross negligence on the part of the Bank, its officers, directors and agents,
arising out of or in connection with the execution and performance of this
Agreement or the maintenance of the Collection Account, including the costs and
expenses of defending themselves against any claim or liability in connection
with the performance of any of their powers or duties hereunder, until the
termination of this Agreement.
Section 12 Counterparts. This Agreement may be executed may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
and delivering one or more counterparts.
[SIGNATURE PAGES FOLLOW]
Exh. IV-5
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Collection Account Control Agreement, all as of the day and year
first above written.
MORTGAGEIT, INC., as Seller
By:
----------------------------------
Name:
Title:
MORTGAGEIT HOLDINGS, INC., as Seller
By:
----------------------------------
Name:
Title:
MHL FUNDING CORP., as Seller
By:
----------------------------------
Name:
Title:
NEXT AT BAT LENDING, INC., as Seller
By:
----------------------------------
Name:
Title:
XXXXXXX XXXXX BANK USA, as Buyer
By:
----------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Bank
By:
----------------------------------
Name:
Title:
Exh. IV-6
Exhibit A to
Collection Account Control Agreement
------------------------------------
[LETTERHEAD OF XXXXXXX XXXXX BANK USA]
[Date]
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Attention: Mortgage Custody MG030C
Re: Notice of Termination of Collection Account Control Agreement
You are hereby notified that the Collection Account Control
Agreement, dated as of June 8, 2005, a copy of which is attached (the
"Agreement"), among you, the undersigned, MortgageIT, Inc., MortgageIT Holdings,
Inc., MHL Funding Corp., and Next at Bat Lending, Inc. (the "Sellers") is
terminated and you have no further obligations to the undersigned pursuant to
the Agreement. Notwithstanding any previous instructions to you, you are hereby
instructed to accept all future directions with respect to the Collection
Account from the Sellers. This notice terminates any obligations you may have to
the undersigned with respect to the Collection Account; provided, however, that
nothing contained in this notice shall alter any obligations which you may
otherwise owe to the undersigned pursuant to any other agreement.
Very truly yours,
XXXXXXX XXXXX BANK USA
By:
-------------------------------
Name:
Title:
Exh. IV-A-1
EXHIBIT V
---------
Mortgage Loan Schedule Fields
1. Loan ID#
2. Account Number
3. Property Type
4. Loan Purpose
5. Loan Rate
6. Original Balance
7. Actual P & I
8. Service Fee
9. Original Term
10. State
11. Appraisal
12. Number of Units
13. Margin
14. Life Cap
15. Property Street Address
16. Property City
17. Property Zip Xxxx
00. Xxx Xxxxx
00. First Payment Date
20. Remaining Term
21. CLTV
22. Current Balance
23. Borrower Last Name
Exh. V-1
24. Borrower First Name
25. Next Interest Adjustment
26. Index Name
27. Last Payment Date
28. Grade/Rating
29. Debt Service Ratio
30. LTV
31. Owner Occupancy
32. Lien Position
33. Product Description
34. Loan Type (Fixed Rate, Buy Down, GPM, GEM, ARM, Balloon)
35. Negative Amortization Indicator
36. Interest Rate Adjustment Frequency
37. Annual Payment Cap
38. Periodic Rate Cap on First Adjustment Date
39. Lifetime Maximum Rate
40. Negative Amortization Limit %
41. Periodic Rate Cap Subsequent to First Adjustment Date
42. Mortgage Insurance Coverage
43. Primary Mortgage Insurer (if applicable)
44. Borrower Credit Quality
45. Risk Grades
46. Current FICO Scores
47. Mortgage Score
48. Silent Second
49. Current Delinquency Status (30, 60, 90 Days Past Due, Foreclosure,
Bankruptcy)
50. First Mortgage Balance
51. Payment Change Frequency
Exh. V-2
EXHIBIT VI
----------
Mortgage File Documents
(a) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________ without recourse" and
signed in the name of the last endorsee (the "Last Endorsee") by an authorized
Person (in the event that the Mortgage Loan was acquired by the Last Endorsee in
a merger, as notified to the Custodian in writing, the signature must be in the
following form: "[Last Endorsee], successor by merger to [name of predecessor]";
in the event that the Mortgage Loan was acquired or originated by the Last
Endorsee while doing business under another name as notified to the Custodian in
writing, the signature must be in the following form: "[Last Endorsee], formerly
known as [previous name]").
(b) The original of the guarantee executed in connection with the
Mortgage Note (if any).
(c) The original Mortgage with evidence of recording thereon, or
a copy thereof stamp certified by an officer of the related Seller, escrow
agent, title company or closing attorney certifying that such represents a true
and correct copy of the original and that such original has been submitted for
recordation in the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located.
(d) The originals of all assumption, modification, consolidation
or extension agreements with evidence of recording thereon, or copies thereof
stamp certified by an officer of the related Seller, escrow agent, title company
or closing attorney certifying that such represent true and correct copies of
the originals and that such originals have each been submitted for recordation
in the appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located.
(e) Except for each Mortgage Loan registered in the MERS System,
the original Assignment of Mortgage in blank for each Mortgage Loan, in form and
substance acceptable for recording and signed in the name of the Last Endorsee
(in the event that the Mortgage Loan was acquired by the Last Endorsee in a
merger, as notified to the Custodian in writing, the signature must be in the
following form: "[Last Endorsee], successor by merger to [name of predecessor]";
in the event that the Mortgage Loan was acquired or originated while doing
business under another name, as notified to the Custodian in writing, the
signature must be in the following form: "[Last Endorsee], formerly known as
[previous name]").
(f) The originals of all intervening assignments of mortgage with
evidence of recording thereon, showing an unbroken chain of title from the
originator thereof to the Last Endorsee or copies thereof stamp certified by an
officer of the related Seller, escrow agent, title company or closing attorney
certifying that such represent true and correct copies of the originals and that
such originals have each been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.
Exh. VI-1
(g) The original attorney's opinion of title and abstract of
title or the original mortgagee title insurance policy, or if the original
mortgagee title insurance policy has not been issued, the irrevocable commitment
to issue the same.
(h) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage Loan.
(i) At the request of Buyer in accordance with the terms of this
Repurchase Agreement and as notified to the Custodian, with respect to a
Mortgage Loan that is covered by a PMI Policy, a certified copy of such PMI
Policy or evidence of delegated underwriter approval.
(j) At the request of Buyer in accordance with the terms of this
Repurchase Agreement and as notified to the Custodian, with respect to a
Mortgage Loan which is covered by pool insurance, a pool insurer pool
certification.
Exh. VI-2
EXHIBIT VII
-----------
RESERVED
Exh. VII-1
EXHIBIT VIII
[MortgageIT's] [Holdings'] [MHL's] [NABL] Officer's Certificate
I, ___________________, do hereby certify that I am duly elected,
qualified and authorized officer of [MortgageIT, Inc. ("MortgageIT")]
[MortgageIT Holdings, Inc. ("Holdings")] [MHL Funding Corp. ("MHL")] [Next at
Bat Lending, Inc. ("NABL")]. This Certificate is delivered to you in connection
with Section 12(d)(iv) of the Master Repurchase Agreement dated as of June 8,
2005, among MortgageIT, Inc., MortgageIT Holdings, Inc., MHL Funding Corp., Next
at Bat Lending, Inc. and Xxxxxxx Xxxxx Bank USA (the "Agreement"). I hereby
certify that, as of the date of the financial statements attached hereto and as
of the date hereof, ---------- [MortgageIT] [Holdings] [MHL] [NABL] is and has
been in compliance with all the terms of the Agreement and, without limiting the
generality of the foregoing, I certify that:
(i) Maintenance of Tangible Net Worth. The Sellers, on a
consolidated basis, have maintained a Tangible Net Worth of not less than
$175,000,000. At no time has MortgageIT individually maintained a Tangible
Net Worth at the end of any two consecutive calendar quarters of less than
$25,000,000.
(ii) Maintenance of Ratio of Indebtedness to Tangible Net Worth.
The Sellers, on a consolidated basis, have maintained the ratio of Adjusted
Indebtedness to Tangible Net Worth of no greater than 15:1 and the ratio of
Indebtedness to Tangible Net Worth no greater than 25:1.
(iii) Maintenance of Liquidity. The Sellers, on a consolidated
basis, shall ensure that, as of the end of each calendar month, they have
cash and Cash Equivalents in an amount not less than $20,000,000.
(iv) No Default or Event of Default has occurred or is
continuing. [If any Default or Event of Default has occurred and is
continuing, Seller shall describe the same in reasonable detail and
describe the action the Seller has taken or proposes to take with respect
thereto.]
(v) Attached hereto as Schedule 1 is a true and correct list of
all Mortgage Loans purchased by Buyer and held by the Custodian pending
repurchase.
Exh. VIII-1
IN WITNESS WHEREOF, I have set my hand this _____ day of ________, ________.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
Exh. VIII-2
EXHIBIT IX
FORM OF SERVICER NOTICE
[Date]
[________________], as Servicer
[ADDRESS]
Attention: ___________
Re: Master Repurchase Agreement, dated as of June 8, 2005
(the "Repurchase Agreement"), by and among
MortgageIT, Inc., MortgageIT Holdings, Inc., MHL
Funding Corp., Next at Bat Lending, Inc. (the
"Sellers") and Xxxxxxx Xxxxx Bank USA (the "Buyer").
Ladies and Gentlemen:
[___________________] (the "Servicer") is servicing certain mortgage loans for
Sellers pursuant to that certain Servicing Agreement between the Servicer and
the Sellers. Pursuant to the Repurchase Agreement between Buyer and the Sellers,
the Servicer is hereby notified that the Sellers have pledged to Buyer certain
mortgage loans which are serviced by Servicer which are subject to a security
interest in favor of Buyer.
Upon receipt of a Notice of Event of Default from Buyer in which Buyer shall
identify the mortgage loans which are then pledged to Buyer under the Repurchase
Agreement (the "Mortgage Loans"), the Servicer shall segregate all amounts
collected on account of such Mortgage Loans, hold them in trust for the sole and
exclusive benefit of Buyer, and remit such collections in accordance with
Buyer's written instructions. Following such Notice of Event of Default,
Servicer shall follow the instructions of Buyer with respect to the Mortgage
Loans, and shall deliver to Buyer any information with respect to the Mortgage
Loans reasonably requested by Buyer.
Notwithstanding any contrary information which may be delivered to the Servicer
by the Sellers, the Servicer may conclusively rely on any information or Notice
of Event of Default delivered by Buyer, and Sellers shall indemnify and hold the
Servicer harmless for any and all claims asserted against it for any actions
taken in good faith by the Servicer in connection with the delivery of such
information or Notice of Event of Default.
Xxx. XX-0
Please acknowledge receipt of this instruction letter by signing in the
signature block below and forwarding an executed copy to Buyer promptly upon
receipt. Any notices to Buyer should be delivered to the following addresses: 0
Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention: Xx. Xxxxx X. Xxxxx;
Telephone: 000-000-0000; Facsimile: 000-000-0000.
Very truly yours,
MortgageIT, Inc.
By:
--------------------------------
Name:
Title:
MortgageIT Holdings, Inc.
By:
--------------------------------
Name:
Title:
MHL Funding Corp.
By:
--------------------------------
Name:
Title:
Next at Bat Lending, Inc.
By:
--------------------------------
Name:
Title:
ACKNOWLEDGED:
-------------
[ ],
------------------
as Servicer
By:
--------------------------------
Title:
Telephone:
Facsimile:
Exh. IX-2
EXHIBIT X
---------
AUTHORIZED REPRESENTATIVES
SELLER NOTICES
--------------
Name: Xxxxxxx X. Xxxxxxxx Address: MortgageIT, Inc.
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Name: Xxxx Xxxx Address: MortgageIT Holdings, Inc.
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Name: Xxxx Xxxx Address: MHL Funding Corp.
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Name: Xxxx Xxxx Address: Next at Bat Lending, Inc.
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
SELLERS' AUTHORIZATIONS
-----------------------
Any of the persons whose names and titles appear in (a) that certain Secretary's
Certificate of MortgageIT, Inc. dated June 8, 2005, (b) that certain Secretary's
Certificate of MortgageIT Holdings, Inc. dated June 8, 2005, (c) that certain
Secretary's Certificate of MHL Funding Corp. dated June 8, 2005, and (d) that
certain Secretary's Certificate of Next At Bat Lending, Inc. dated June 8, 2005,
collectively as "the Certificates", which have been previously delivered to the
Buyer are authorized, acting singly, to act for the Sellers under this Agreement
in accordance with such Certificates.
Exh. X-1
BUYER NOTICES
-------------
Name: Address: Xxxxxxx Xxxxx Bank USA
Telephone: 4 World Financial Center
Facsimile: 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
10080
BUYER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below, including any other
authorized officers, are authorized, acting singly, to act for Buyer under this
Agreement:
<TABLE>
Name Title Authorized Signature
---------------------- ---------------- ------------------------
Xxxxx Xxxxx Director
------------------------
Xxxxxx Xxxxxx Director
------------------------
Xxxx Xxxxxxx Director
------------------------
Xxxxxxxxxxx Xxxxx Vice President
------------------------
Xxxx Xxxx Senior Specialist
------------------------
Xxxxxxx Xxxxxxxx Senior Specialist
------------------------
Xxxxxxxxxxx Xxxxxxx Senior Specialist
------------------------
Xxxx Xxxxxxxxxx Director
------------------------
</TABLE>
Exh. X-2
EXHIBIT XI
RESPONSIBLE OFFICERS OF SELLERS
-----------------------------------------------------------------
Name Title
-----------------------------------------------------------------
Xxxx X. Xxxxxx Chief Executive Officer
-----------------------------------------------------------------
Xxxxxx Xxxxxxx Executive Vice
President- Finance
-----------------------------------------------------------------
Xxxxxxx Xxxxxxxx Senior Vice President
Lending Operations
-----------------------------------------------------------------
Xxxxxxx Xxxxxxx Chief Lending Officer
-----------------------------------------------------------------
Xxxx XxXxxxx Senior Vice President-
Financial Planning
-----------------------------------------------------------------
Exh. XI-1
EXHIBIT XII
-----------
CO-OP LOAN MORTGAGE FILE
The following items should be included with respect to any Co-op Loan:
1. The (i) original Mortgage Note, endorsed (on the Mortgage Note or an
allonge attached thereto) "Pay to the order of _____________, without
recourse" and signed by facsimile signature in the name of the related
Seller by an authorized officer, with all intervening endorsements showing
a complete, valid and proper chain of title from the originator of such
Mortgage Loan to the related Seller; or (ii) a certified copy of the
Mortgage Note (endorsed as provided above) together with a lost note
affidavit providing indemnification to the holder thereof for any losses
incurred due to the fact that the original Mortgage Note is missing;
2. The original Assignment of Lease Agreement for each Mortgage Loan, from the
related Seller signed by original or by facsimile signature to
__________________, which assignment shall be in form and substance
acceptable for recording (except for the recording information);
3. the original Stock Certificate and related Stock Power, in blank, executed
by the Mortgagor with such signature guaranteed and original Stock Power,
in blank executed by the related Seller;
4. the original Proprietary Lease and the Assignment of Proprietary Lease
executed by the Mortgagor in blank or if the Proprietary Lease has been
assigned by the Mortgagor to the related Seller, then such Seller must
execute an assignment of the Assignment of Proprietary Lease in blank;
5. the original Recognition Agreement and the original Assignment of
Recognition Agreement;
6. the recorded state and county Financing Statements and changes thereto;
7. an Estoppel Letter and/or Consent;
8. the Co-op Lien Search;
9. the guaranty of the Mortgage Note and Co-op Loan, if any; and the original
of any security agreement or similar document executed in connection with
the Co-op Loan.
Exh. XII-1
