INFORMATION DENOTED BY [*] HEREIN HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THIS INFORMATION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
EXECUTION VERSION
AMENDMENT NO. 9
TO MASTER REPURCHASE AGREEMENT
Amendment No. 9, dated as of March 31, 2004 (this "Amendment"),
between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC,
INC. and FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002, Amendment No. 2, dated as of September 3, 2002,
Amendment No. 3, dated as of December 19, 2002, Amendment No. 4, dated as of
March 31, 2003, Amendment No. 5, dated as of May 28, 2003, Amendment No. 6,
dated as of July 28, 2003, Amendment No. 7, dated as of January 2, 2004 and
Amendment No. 8, dated as of March 1, 2004 (the "Existing Repurchase Agreement";
as amended by this Amendment, the "Repurchase Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings given to them in
the Existing Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Increased Maximum Aggregate Purchase Price Period. For
purposes of this Amendment, this Section 1 will be effective only during the
Increased Maximum Aggregate Purchase Price Period.
1.1 Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by adding the following defined terms, which amendment shall
be effective solely during the Increased Maximum Aggregate Purchase Price Period
(as defined below):
"Increased Maximum Aggregate Purchase Price Period" shall mean the
period beginning on March 31, 2004 through and including July 27, 2004."
1.2 Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by deleting the definition of "Maximum Aggregate Purchase
Price" in its entirety and replacing it with the following language, which
amendment shall be effective solely during the Increased Maximum Aggregate
Purchase Price Period:
"Maximum Aggregate Purchase Price" means $125,000,000 (ONE HUNDRED
TWENTY FIVE MILLION DOLLARS).
-1-
SECTION 2. Permanent Amendment; Definitions. Section 2 of the Existing
Repurchase Agreement is hereby amended by deleting the clause (xi) to the
definition of "Market Value" in its entirety and replacing it with the following
language:
"(xi) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price of all
Second Lien Mortgage Loans that are Purchased Mortgage Loans exceeds $10.0
million; or"
SECTION 3. Permanent Amendment; Covenants. Section 14 of the Existing
Repurchase Agreement is hereby amended by deleting subclause (a) in its entirety
and replacing it with the following:
"Adjusted Tangible Net Worth. First NLC shall maintain an Adjusted
Tangible Net Worth of at least $13 million."
SECTION 4. Exhibits. Exhibit D to the Existing Repurchase Agreement is
hereby amended by deleting it in its entirety and replacing it with Exhibit A to
this Amendment.
SECTION 5. Conditions Precedent. This Amendment shall become effective
on March 31, 2004 (the "Amendment Effective Date"), subject to the satisfaction
of the following conditions precedent:
5.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller; and
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 6. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 7. Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 8. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
SECTION 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
-2-
STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
-3-
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Seller: NLC, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and COO
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President and COO
EXHIBIT A TO AMENDMENT NO. 8
EXHIBIT D
OFFICER'S COMPLIANCE CERTIFICATE
I, , do hereby certify that I am duly elected,
---------------------
qualified and authorized officer of First NLC Financial Services, LLC and NLC,
Inc. ("Sellers"). This Certificate is delivered to you in connection with
Section 17b of the Master Repurchase Agreement dated as of December 20, 2001,
among Sellers and Credit Suisse First Boston Mortgage Capital LLC (the
"Agreement"). I hereby certify that, as of the date of the financial statements
attached hereto and as of the date hereof, each Seller is and has been in
compliance with all the terms of the Agreement and, without limiting the
generality of the foregoing, I certify that:
(a) Adjusted Tangible Net Worth. For each quarter commencing after
March 31, 2004, First NLC has maintained an Adjusted Tangible Net Worth
greater than $13 million. A detailed summary of the calculation of First
NLC's actual Adjusted Tangible Net Worth is provided in Schedule 1 hereto.
(b) Indebtedness to Adjusted Tangible Net Worth Ratio. For each
quarter commencing after December 31, 2000, First NLC's ratio of
consolidated Indebtedness to consolidated Adjusted Tangible Net Worth has
not exceeded 20:1.
(c) Maintenance of Profitability. First NLC has not permitted, for any
Test Period, Net Income for such Test Period, before income taxes for such
Test Period and distributions made during such Test Period, to be less than
$1.00.
(d) Insurance. Each Seller or its Affiliates, has maintained, for such
Seller and its Subsidiaries, 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 or an aggregate amount of at least $ . The
--------------
actual amount of such coverage is $ .
--------------
(e) Financial Statements. The financial statements attached hereto are
accurate and complete, accurately reflect the financial condition of First
NLC, and do not omit any material fact as of the date(s) thereof.
(f) Documentation. Each Seller has performed the documentation
procedures required by its operational guidelines with respect to
endorsements and assignments, including the recordation of assignments, or
has verified that such documentation procedures have been performed by a
prior holder of such Mortgage Loan.
(g) Compliance. Each Seller has observed or performed in all material
respects all of its covenants and other agreements, and satisfied every
condition, contained in the Agreement and the other Program Agreements to
be observed, performed and satisfied by it. [If a covenant or other
agreement or condition has not been
complied with by a Seller, such Seller shall describe such lack of compliance
and provide the date of any related waiver thereof.]
(h) Regulatory Action. Neither Seller is currently under investigation
or, to best of the related Seller's knowledge, no investigation by any federal,
state or local government agency is threatened. Neither Seller has been the
subject of any government investigation which has resulted in the voluntary or
involuntary suspension of a license, a cease and desist order, or such other
action as could adversely impact the related Seller's business. [If so, the
related Seller shall describe the situation in reasonable detail and describe
the action that such Seller has taken or proposes to take in connection
therewith.]
(i) No Default. No Default or Event of Default has occurred or is
continuing. [If any Default or Event of Default has occurred and is continuing,
the related Seller shall describe the same in reasonable detail and describe the
action such Seller has taken or proposes to take with respect thereto, and if
such Default or Event of Default has been expressly waived by Buyer in writing,
such Seller shall describe the Default or Event of Default and provide the date
of the related waiver.]
(j) Indebtedness. All Indebtedness (other than Indebtedness evidenced
by the Repurchase Agreement) of First NLC existing on the date hereof is listed
on Schedule 2 hereto.
(k) Purchased Mortgage Loans. Attached hereto as Schedule 3 is a true
and correct list of all Mortgage Loans purchased by Buyer and held by Custodian
pending repurchase.
(l) Originations. Attached hereto as Schedule 4 is a true and correct
summary of all Mortgage Loans originated by Buyer during the calendar quarter
ending on [DATE].
IN WITNESS WHEREOF, I have set my hand this day of
------------- -----------,
.
-----------------
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
SCHEDULE 1 TO OFFICER'S COMPLIANCE CERTIFICATE
CALCULATIONS OF FINANCIAL COVENANTS
As of the quarter ended [Date]
--------------------------------------------------------------------------------
I. Adjusted Tangible Net Worth
--------------------------------------------------------------------------------
1. Net Worth (book) $
--------------------------------------------------------------------------------
Plus:
--------------------------------------------------------------------------------
2. Subordinated Debt (maturity > CSFB line maturity) $
--------------------------------------------------------------------------------
3. 1% of outstanding servicing portfolio balance $
--------------------------------------------------------------------------------
I.(a) Total of items 1-3 $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Less:
--------------------------------------------------------------------------------
4. Capitalized servicing balance $
--------------------------------------------------------------------------------
5. Goodwill $
--------------------------------------------------------------------------------
6. Receivables or advances due from shareholders, $
affiliates, employees or related parties
--------------------------------------------------------------------------------
7. Trademarks $
--------------------------------------------------------------------------------
8. Capitalized organizational expenses $
--------------------------------------------------------------------------------
9. Copyrights $
--------------------------------------------------------------------------------
10. Tradenames $
--------------------------------------------------------------------------------
11. Restricted Cash $
--------------------------------------------------------------------------------
12. Deferred Charges $
--------------------------------------------------------------------------------
13. Prepaid assets $
--------------------------------------------------------------------------------
14. Investments in related entities, partnerships $
--------------------------------------------------------------------------------
15. Any other intangible assets $
--------------------------------------------------------------------------------
I.(b) Total of items 4-15 $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
I.(c) Actual Adjusted Tangible Net Worth (a minus b) $
--------------------------------------------------------------------------------
Adjusted Tangible Net Worth Covenant $
--------------------------------------------------------------------------------
Compliance? Yes/No
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
II. Leverage Ratio
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Debt divided by Adjusted Tangible Net Worth - Actual xx.x
--------------------------------------------------------------------------------
Leverage Covenant xx.x
--------------------------------------------------------------------------------
Compliance? Yes/No
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEDULE 2 TO OFFICER'S COMPLIANCE CERTIFICATE
INDEBTEDNESS as of
-----------------------
--------------------------------------------------------------------------------
OUTSTANDING
LENDER TOTAL COMMITMENT INDEBTEDNESS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEDULE 3 TO OFFICER'S COMPLIANCE CERTIFICATE
PURCHASED MORTGAGE LOANS
SCHEDULE 4 TO OFFICER'S COMPLIANCE CERTIFICATE
OVERALL MORTGAGE LOAN ORIGINATIONS
--------------------------------------------------------------------------------
TOTAL NUMBER OF AGGREGATE PRINCIPAL
MORTGAGE LOANS BALANCE OF MORTGAGE
MORTGAGE LOAN TYPE ORIGINATED LOANS ORIGINATED
--------------------------------------------------------------------------------
Alt-A Mortgage Loans
--------------------------------------------------------------------------------
Conforming Mortgage Loans
--------------------------------------------------------------------------------
Jumbo Mortgage Loans
--------------------------------------------------------------------------------
Second Lien Mortgage Loans
--------------------------------------------------------------------------------
Sub-Prime Mortgage Loans
--------------------------------------------------------------------------------
EXECUTION VERSION
AMENDMENT NO. 8
TO MASTER REPURCHASE AGREEMENT
Amendment No. 8, dated as of March 1, 2004 (this "Amendment"), between
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC, INC. and
FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002, Amendment No. 2, dated as of September 3, 2002,
Amendment No. 3, dated as of December 19, 2002, Amendment No. 4, dated as of
March 31, 2003, Amendment No. 5, dated as of May 28, 2003, Amendment No. 6,
dated as of July 28, 2003, and Amendment No. 7, dated as of January 2, 2004 (the
"Existing Repurchase Agreement"; as amended by this Amendment, the "Repurchase
Agreement"). Capitalized terms used but not otherwise defined herein shall have
the meanings given to them in the Existing Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be
amended to reflect certain agreed upon revisions to the terms of the Existing
Repurchase Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement
is hereby amended by deleting the definition of "Maximum Aggregate Purchase
Price" in its entirety and replacing it with the following language:
"Maximum Aggregate Purchase Price" means ONE HUNDRED MILLION DOLLARS
($100,000,000).
SECTION 2. Covenants. Section 14 of the Existing Repurchase Agreement
is hereby amended by deleting subclause (a) in its entirety and replacing it
with the following:
"Adjusted Tangible Net Worth. First NLC shall maintain an Adjusted
Tangible Net Worth of at least $11 million."
SECTION 3. Exhibits. Exhibit D to the Existing Repurchase Agreement is
hereby amended by deleting it in its entirety and replacing it with Exhibit A to
this Amendment.
SECTION 4. Conditions Precedent. This Amendment shall become effective
on March 1, 2004 (the "Amendment Effective Date"), subject to the satisfaction
of the following conditions precedent:
4.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller; and
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 5. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 6. Limited Effect. Except as expressly amended and modified
by this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 7. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be
an original and all of which taken together shall constitute one and the same
instrument.
SECTION 8. Superseding Amendment. This Amendment shall supersede
Section 1 of Amendment No. 7 to the Existing Repurchase Agreement, dated as of
January 4, 2004, from and including the Amendment Effective Date.
SECTION 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ XXXXX XXXXX
------------------------------------
Name: XXXXX XXXXX
Title: VICE PRESIDENT
Seller: NLC, INC.,
as Seller
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: PRESIDENT COO
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: PRESIDENT COO
EXHIBIT A TO AMENDMENT NO. 8
EXHIBIT D
OFFICER'S COMPLIANCE CERTIFICATE
I, , do hereby certify that I am duly
--------------------------
elected, qualified and authorized officer of First NLC Financial Services, LLC
and NLC, Inc. ("Sellers"). This Certificate is delivered to you in connection
with Section 17b of the Master Repurchase Agreement dated as of December 20,
2001, among Sellers and Credit Suisse First Boston Mortgage Capital LLC (the
"Agreement"). I hereby certify that, as of the date of the financial statements
attached hereto and as of the date hereof, each Seller is and has been in
compliance with all the terms of the Agreement and, without limiting the
generality of the foregoing, I certify that:
(a) Adjusted Tangible Net Worth. For each quarter commencing
after December 31, 2000, First NLC has maintained an Adjusted Tangible
Net Worth greater than $11 million. A detailed summary of the
calculation of First NLC's actual Adjusted Tangible Net Worth is
provided in Schedule 1 hereto.
(b) Indebtedness to Adjusted Tangible Net Worth Ratio. For each
quarter commencing after December 31, 2000, First NLC's ratio of
consolidated Indebtedness to consolidated Adjusted Tangible Net Worth
has not exceeded 20:1.
(c) Maintenance of Profitability. First NLC has not permitted,
for any Test Period, Net Income for such Test Period, before income
taxes for such Test Period and distributions made during such Test
Period, to be less than $1.00.
(d) Insurance. Each Seller or is Affiliates, has maintained, for
such Seller and its Subsidiaries, 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 or an aggregate amount of at least
$ . The actual amount of such coverage is $ .
-------------- -------------
(e) Financial Statements. The financial statements attached
hereto are accurate and complete, accurately reflect the financial
condition of First NLC, and do no omit any material fact as of the
date(s) there of.
(f) Documentation. Each Seller has performed the documentation
procedures required by its operational guidelines with respect to
endorsements and assignments, including the recordation of
assignments, or has verified that such documentation procedures have
been performed by a prior holder of such Mortgage Loan.
(g) Compliance. Each Seller has observed or performed in all
material respects all of its covenants and other agreements, and
satisfied every condition, contained in the Agreement and the other
Program Agreements to be observed, performed and satisfied by it. [If
a covenant or other agreement or condition has not been
complied with by a Seller, such Seller shall describe such lack
of compliance and provide the date of any related waiver thereof.]
(h) Regulatory Action. Neither Seller is currently under
investigation or, to best of the related Seller's knowledge, no
investigation by any federal, state or local government agency is
threatened. Neither Seller has been the subject of any government
investigation which has resulted in the voluntary or involuntary
suspension of a license, a cease and desist order, or such other
action as could adversely impact the related Seller's business. [If
so, the related Seller shall describe the situation in reasonable
detail and describe the action that such Seller has taken or proposes
to take in connection therewith.]
(i) No Default. No Default or Event of Default has occurred or is
continuing. [If any Default or Event of Default has occurred and is
continuing, the related Seller shall describe the same in reasonable
detail and describe the action such Seller has taken or proposes to
take with respect thereto, and if such Default or Event of Default has
been expressly waived by Buyer in writing, such Seller shall describe
the Default or Event of Default and provide the date of the related
waiver.]
(j) Indebtedness. All Indebtedness (other than Indebtedness
evidenced by the Repurchase Agreement) of First NLC existing on the
date hereof is listed on Schedule 2 hereto.
(k) Purchased Mortgage Loans. Attached hereto as Schedule 3 is a
true and correct list of all Mortgage Loans purchased by Buyer and
held by Custodian pending repurchase.
(l) Originations. Attached hereto as Schedule 4 is a true and
correct summary of all Mortgage Loans originated by Buyer during the
calendar quarter ending on [DATE].
IN WITNESS WHEREOF, I have set my hand this day of ,
------- ---------
.
---------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
SCHEDULE 1 TO OFFICER'S COMPLIANCE CERTIFICATE
CALCULATIONS OF FINANCIAL COVENANTS
As of the quarter ended [Date]
--------------------------------------------------------------------------------
I. Adjusted Tangible Net Worth
--------------------------------------------------------------------------------
1. Net Worth (book) $
--------------------------------------------------------------------------------
Plus:
--------------------------------------------------------------------------------
2. Subordinated Debt (maturity > CSFB line maturity) $
--------------------------------------------------------------------------------
3. 1% of outstanding servicing portfolio balance $
--------------------------------------------------------------------------------
I.(a) Total of items 1-3 $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Less:
--------------------------------------------------------------------------------
4. Capitalized servicing balance $
--------------------------------------------------------------------------------
5. Goodwill $
--------------------------------------------------------------------------------
6. Receivables or advances due from shareholders,
affiliates, employees or related parties $
--------------------------------------------------------------------------------
7. Trademarks $
--------------------------------------------------------------------------------
8. Capitalized organizational expenses $
--------------------------------------------------------------------------------
9. Copyrights $
--------------------------------------------------------------------------------
10. Tradenames $
--------------------------------------------------------------------------------
11. Restricted Cash $
--------------------------------------------------------------------------------
12. Deferred Charges $
--------------------------------------------------------------------------------
13. Prepaid assets $
--------------------------------------------------------------------------------
14. Investments in related entities, partnerships $
--------------------------------------------------------------------------------
15. Any other intangible assets $
--------------------------------------------------------------------------------
I.(b) Total of items 4-15 $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
I.(c) Actual Adjusted Tangible Net Worth (a minus b) $
--------------------------------------------------------------------------------
Adjusted Tangible Net Worth Covenant $
--------------------------------------------------------------------------------
Compliance? Yes/No
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
II. Leverage Ratio
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Debt divided by Adjusted Tangible Net Worth - Actual XX.X
--------------------------------------------------------------------------------
Leverage Covenant xx.x
--------------------------------------------------------------------------------
Compliance? Yes/No
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEDULE 2 TO OFFICER'S COMPLIANCE CERTIFICATE
INDEBTEDNESS as of
------------------------
--------------------------------------------------------------------------------
OUTSTANDING
LENDER TOTAL COMMITMENT INDEBTEDNESS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEDULE 3 TO OFFICER'S COMPLIANCE CERTIFICATE
PURCHASED MORTGAGE LOANS
SCHEDULE 4 TO OFFICER'S COMPLIANCE CERTIFICATE
OVERALL MORTGAGE LOAN ORIGINATIONS
--------------------------------------------------------------------------------
TOTAL NUMBER OF AGGREGATE PRINCIPAL
MORTGAGE LOANS BALANCE OF MORTGAGE
MORTGAGE LOAN TYPE ORIGINATED LOANS ORIGINATED
--------------------------------------------------------------------------------
Alt-A Mortgage Loans
--------------------------------------------------------------------------------
Conforming Mortgage Loans
--------------------------------------------------------------------------------
Jumbo Mortgage Loans
--------------------------------------------------------------------------------
Second Lien Mortgage Loans
--------------------------------------------------------------------------------
Sub-Prime Mortgage Loans
--------------------------------------------------------------------------------
AMENDMENT NO. 7
TO MASTER REPURCHASE AGREEMENT
Amendment No. 7, dated as of January 2, 2004 (this "Amendment"),
between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC,
INC. and FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002, Amendment No. 2, dated as of September 3, 2002,
Amendment No. 3, dated as of December 19, 2002, Amendment No. 4, dated as of
March 31, 2003, Amendment No. 5, dated as of May 28, 2003 and Amendment No. 6,
dated as of July 28, 2003 (the "Existing Repurchase Agreement"; as amended by
this Amendment, the "Repurchase Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings given to them in the Existing
Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Temporary Amendments. For purposes of this Amendment, this
Section 1 will be effective only during the Increased Maximum Aggregate Purchase
Price Period (as defined below).
1.1 Definitions.
(a) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by adding the following definition in its proper
alphabetical order, which amendment shall be effective solely during the
Increased Maximum Aggregate Purchase Price Period:
"Increased Aggregate Purchase Price" means TWENTY FIVE MILLION DOLLARS
($25,000,000).
"Increased Maximum Aggregate Purchase Price Period" shall mean the
period beginning on January 2, 2004 through and including March 5, 2004.
"Increased Purchase Price Mortgage Loan" means a Mortgage Loan which
is purchased with the proceeds of the Increased Aggregate Purchase Price. Any
Mortgage Loans subject to a Transaction will first be attributed to the Standard
Aggregate Purchase Price prior to any Mortgage Loans being attributed to the
Increased Aggregate Purchase Price. To the extent
that funds are no longer available under the Standard Aggregate Purchase Price,
any further Mortgage Loans subject to a Transaction will be considered Increased
Purchase Price Mortgage Loans. For purposes of this Agreement, Mortgage Loans
will be allocated first to the Standard Aggregate Purchase Price and then the
Increased Aggregate Purchase Price based on the date on which such Mortgage Loan
becomes subject to this Agreement, commencing from the earliest date to the most
recent date.
"Liquidity Reserve Amount" means the funds maintained by the Sellers
in the account set forth in Section 9 hereof solely for purposes of maintaining
the Liquidity Reserve Minimum pursuant to Section 3 hereof.
"Liquidity Reserve Minimum" means, as of any date of determination,
the product of (a) 3.0% and (b) the positive difference, if any, of (A) the
aggregate Purchase Price for all Purchased Mortgage Loans subject to then
outstanding Transactions under this Agreement, less (B) $75,000,000.
"Standard Aggregate Purchase Price" means SEVENTY FIVE MILLION DOLLARS
($75,000,000).
(b) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by deleting the definition of "Maximum Aggregate
Purchase Price" in its entirety and replacing it with the following
language, which amendment shall be effective solely during the Increased
Maximum Aggregate Purchase Price Period:
"Maximum Aggregate Purchase Price" means ONE HUNDRED MILLION DOLLARS
($100,000,000).
(c) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by deleting the definition of "Purchase Price" in its
entirety and replacing it with the following language, which amendment
shall be effective solely during the Increased Maximum Aggregate Purchase
Price Period:
"Purchase Price" means the price at which each Mortgage Loan is
transferred by a Seller to Buyer, which shall equal:
(a) on the Purchase Date, in the case of Purchased Mortgage Loans
other than One Hundred and Twenty Day Aged Mortgage Loans, One Hundred and
Fifty Day Aged Mortgage Loans, Repurchased Mortgage Loans or Increased
Purchase Price Mortgage Loans, the lesser of either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, the product of (1) the outstanding principal
amount thereof as set forth in the Mortgage Loan Schedule and
Exception Report multiplied by (2) the applicable Purchase Price
Percentage for such Mortgage Loan or (y) in the case of CSFBMC
Mortgage Loans, [*] as set forth in the Mortgage Loan Schedule and
Exception Report, and
2
(B) the product of (1) the Market Value of such Purchased
Mortgage Loan multiplied by (2) the applicable Purchase Price
Percentage for such Mortgage Loan; or
(b) on the Purchase Date, in the case of Purchased Mortgage Loans
which are One Hundred and Twenty Day Aged Mortgage Loans other than
Repurchased Mortgage Loans, the lesser of either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, [*]% of the outstanding principal amount
thereof as set forth in the Mortgage Loan Schedule and Exception
Report or (y) in the case of CSFBMC Mortgage Loans, [*] as set forth
in the Mortgage Loan Schedule and Exception Report, and
(B) the product of (1) the Market Value of such Purchase Mortgage
Loan multiplied by (2) the applicable Purchase Price Percentage for
such Mortgage Loan; or
(c) on the Purchase Date, in the case of Purchased Mortgage Loans
which are One Hundred and Fifty Day Aged Mortgage Loans other than
Repurchased Mortgage Loans, the lesser of either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, [*]% of the outstanding principal amount
thereof as set forth in the Mortgage Loan Schedule and Exception
Report or (y) in the case of CSFBMC Mortgage Loans, [*] as set forth
in the Mortgage Loan Schedule and Exception Report, and
(B) the product of (1) the Market Value of such Purchase Mortgage
Loan multiplied by (2) the applicable Purchase Price Percentage for
such Mortgage Loan;
(d) on the Purchase Date, in the case of Purchased Mortgage Loans
which are Repurchased Mortgage Loans, the lesser of (1) [*]% of the value
reflected in the most recent BPO, (2) [*]% of the outstanding principal
balance thereof as set forth in the related Mortgage Loan Schedule
multiplied by the applicable Purchase Price Percentage or (3) [*]% of the
Market Value of such Mortgage Loan; and
(e) on the Purchase Date, in the case of Purchased Mortgage Loans
which are Increased Purchase Price Mortgage Loans (other than One Hundred
and Twenty Day Aged Mortgage Loans, One Hundred and Fifty Day Aged Mortgage
Loans, Repurchased Mortgage Loans or Second Lien Mortgage Loans), the
lesser of either: (x) the product of (1) the Market Value of such Purchased
Mortgage Loan multiplied by (2) the applicable Purchase Price Percentage
for such Increased Purchase Price Mortgage Loan or (y) the product of (1)
the applicable Purchase Price Percentage of such Increased Purchase Price
Mortgage Loan multiplied by (2) the outstanding principal amount thereof as
set forth on the related Mortgage Loan Schedule;
3
(f) after the Purchase Date, except where Buyer and a Seller agree
otherwise, the amount determined under the preceding clauses (a), (b), (c),
(d) or (e) decreased by the amount of any cash transferred by a Seller to
Buyer pursuant to Section 4(c) hereof or applied to reduce the Sellers'
obligations under clause (ii) of Section 4(b) hereof.
(d) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by deleting the definition of "Purchase Price
Percentage" in its entirety and replacing it with the following language,
which amendment shall be effective solely during the Increased Maximum
Aggregate Purchase Price Period:
"Purchase Price Percentage" means, with respect to each Mortgage Loan,
the following percentage, as applicable:
(a) [*]% with respect to Purchased Mortgage Loans that are One Hundred
and Fifty Day Aged Mortgage Loans;
(b) [*]% with respect to Purchased Mortgage Loans that are One Hundred
and Twenty Day Aged Mortgage Loans;
(c) [*]% with respect to Purchased Mortgage Loans that are Second Lien
Mortgage Loans (other than Aged Loans);
(d) [*]% with respect to Purchased Mortgage Loans that are Sub-Prime
Mortgage Loans (other than Aged Loans and Second Lien Mortgage Loans);
(e) [*]% with respect to Purchased Mortgage Loans that are Alt A
Mortgage Loans (other than Aged Loans and Second Lien Mortgage Loans);
(f) [*]% with respect to Purchased Mortgage Loans that are Conforming
Mortgage Loans (other than Aged Loans and Second Lien Mortgage Loans);
(g) [*]% with respect to Purchased Mortgage Loans that are Increased
Purchase Price Mortgage Loans (other than Aged Loans and Second Lien
Mortgage Loans); and
(h) with respect to Purchased Mortgage Loans that are Exception
Mortgage Loans, a percentage to be determined by Buyer in its sole
discretion.
1.2 Program; Initiation of Transactions. Section 3(e) of the Existing
Repurchase Agreement is hereby temporarily amended by adding the following
language after the first sentence thereof, which amendment shall be effective
solely during the Increased Maximum Aggregate Purchase Price Period:
"Notwithstanding the foregoing, for each Mortgage Loan subject to a
Transaction, Buyer shall be entitled to subtract from the actual proceeds
remitted to Sellers, and is hereby instructed and authorized to deposit into the
account set forth in Section 9 hereof an amount equal to the excess if any, of
(i) the Liquidity Reserve Minimum, taking into account the Transaction to be
entered into, over (ii) the Liquidity Reserve Amount (the "Incremental
4
Liquidity Reserve Amount"); provided that, by written notice by the Sellers to
the Buyer, the Sellers may elect to apply any Incremental Liquidity Reserve
Amount deposited pursuant to this Section against the Purchase Price deemed to
be paid by Buyer to Sellers hereunder.
The Sellers shall at all times maintain an amount equal to or greater
than the Liquidity Reserve Minimum in the account set forth in Section 9 hereof.
In the event that, at any time, the Liquidity Reserve Amount is less than the
Liquidity Reserve Minimum, Sellers shall remit funds to the account set forth in
Section 9 hereof within one Business Day such that the Liquidity Reserve Amount
is greater or equal to the Liquidity Reserve Minimum. Without limiting the
Buyer's rights under this Agreement, in the event that Sellers fail to pay any
amount due to the Buyer hereunder, the Buyer may, in its sole discretion,
withdraw funds on deposit in the account set forth in Section 9 hereof in order
to pay itself such amounts then due."
SECTION 2. Permanent Amendment; Definitions.
(a) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting the definition of "Adjusted Tangible Net Worth" in its entirety
and replacing it with the following language:
"Adjusted Tangible Net Worth" means, for any Person, such Person's Net
Worth plus Subordinated Debt (provided that Subordinated Debt shall not be taken
into account to the extent that it would cause Adjusted Tangible Net Worth to be
comprised of greater than 25% Subordinated Debt), minus all intangible assets,
including capitalized servicing rights, goodwill, patents, trade names,
trademarks, copyrights, franchises, any organizational expenses, deferred
expenses, prepaid expenses, prepaid assets, 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.
(b) Section 2 of the Existing Repurchase Agreement is hereby amended
by inserting after the first sentence of the definition of "Exception
Mortgage Loan" the following language:
"Buyer's approval of a Mortgage Loan as an Exception Mortgage Loan
shall expire on the earlier of (a) the date set forth by the Buyer in the
written notice that such Mortgage Loan is approved as an Exception Mortgage Loan
(an "Exception Notice") or (b) the occurrence of any additional event, other
than that set forth in the Exception Notice, which would cause the Mortgage Loan
to become ineligible for purchase hereunder."
(c) Section 2 of the Existing Repurchase Agreement is hereby amended
by adding the following clause (xiv) at the end of the definition of
"Market Value":
"(xiv) such Purchased Mortgage Loan is no longer acceptable for
purchase by Buyer (or an Affiliate thereof) under any of the flow purchase
or conduit programs for which Seller then has been approved due to a
Requirement of Law relating to consumer credit laws or otherwise."
5
SECTION 3. Conditions Precedent. This Amendment shall become effective
on January 2, 2004 (the "Amendment Effective Date"), subject to the satisfaction
of the following conditions precedent:
3.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller; and
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 4. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 5. Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 6. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
Seller: NLC, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name:
Title:
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name:
Title:
EXECUTION VERSION
AMENDMENT NO. 6
TO MASTER REPURCHASE AGREEMENT
Amendment No. 6, dated as of July 28, 2003 (this "Amendment"), between
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC, INC.
and FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002, Amendment No. 2, dated as of September 3, 2002,
Amendment No. 3, dated as of December 19, 2002, Amendment No. 4, dated as of
March 31, 2003 and Amendment No. 5, dated as of May 28, 2003 (the "Existing
Repurchase Agreement"; as amended by this Amendment, the "Repurchase
Agreement"). Capitalized terms used but not otherwise defined herein shall have
the meanings given to them in the Existing Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement
is hereby amended as follows:
(a) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting the definition of "Adjusted Tangible Net Worth" in its entirety and
replacing it with the following language:
""Adjusted Tangible Net Worth" means, for any Person, such Person's
Net Worth plus 1% of the outstanding servicing portfolio balance of such Person
plus Subordinated Debt (provided that Subordinated Debt shall not be taken into
account to the extent that it would cause Adjusted Tangible Net Worth to be
comprised of greater than 25% Subordinated Debt), minus all intangible assets,
including capitalized servicing rights, goodwill, patents, tradenames,
trademarks, copyrights, franchises, any organizational expenses, deferred
expenses, prepaid expenses, prepaid assets, 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."
(b) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting the definition of "Fairbanks" in its entirety.
1
(c) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting the definition of "High Cost Mortgage Loan" in its entirety and
replacing it with the following language:
""High Cost Mortgage Loan" means 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 imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees)."
(d) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting clauses (ix) and (xi) of the definition of "Market Value" in their
entirety and replacing them with the following language:
"(ix) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price of all One
Hundred and Twenty Day Aged Mortgage Loans exceeds $5.0 million;"
"(xi) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price of all
Second Lien Mortgage Loans that are Purchased Mortgage Loans exceeds $7.5
million; or"
(e) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting the definition of "Maximum Aggregate Purchase Price" in its entirety
and replacing it with the following language:
""Maximum Aggregate Purchase Price" means SEVENTY FIVE MILLION DOLLARS
($75,000,000)."
(f) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting the definition of "Servicer" in its entirety and replacing it
with the following language:
""Servicer" means either First NLC or any other servicer approved by
Buyer in its sole discretion."
(g) Section 2 of the Existing Repurchase Agreement is hereby amended
by deleting the definition of "Termination Date" in its entirety and
replacing it with the following language:
""Termination Date" means the earlier of July 27, 2004 and (b) the
date of the occurrence and continuance of an Event of Default."
SECTION 2. Covenants. Section 14 of the Existing Repurchase Agreement
is hereby amended by deleting subclause (a) in its entirety and replacing it
with the following:
2
"Adjusted Tangible Net Worth. First NLC shall maintain an Adjusted
Tangible Net Worth of at least $10 million."
SECTION 3. Margin Deficit. Section 6 of the Existing Repurchase
Agreement is hereby amended by adding the following subsection (c) thereto:
"c. In the event that a Margin Deficit exists with respect to any
Purchased Mortgage Loan, Buyer may retain any funds received by it to which the
Seller would otherwise be entitled hereunder, which funds (i) shall be held by
Buyer against the related Margin Deficit and (ii) may be applied by Buyer
against any Purchased Mortgage Loan for which the related Margin Deficit
remains otherwise unsatisfied. Notwithstanding the foregoing, the Buyer retains
the right, in its sole discretion, to make a Margin Call in accordance with the
provisions of this Section 6."
SECTION 4. Representations and Warranties. Section 13(a) of the
Existing Repurchase Agreement is hereby amended by adding the following
subclauses (25) and (26) at the end thereof:
"(25) No Reliance. Seller has made its own independent decisions to
enter into the Program Agreements 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. Seller is not 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.
(26) Plan Assets. Seller is not 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 (S)2510.3-101 in the Seller's hands."
SECTION 5. Section 14 of the Existing Repurchase Agreement is hereby
amended by adding the following clause (cc) at the end thereof:
"(cc) Plan Assets. Seller shall not be an employee benefit plan as
defined in Section 3 of Title I of ERISA, or a plan described in Section
4975(e)(l) of the Code and the Seller shall not use "plan assets" within the
meaning of 29 CFR (S)2510.3-101 to engage in this Repurchase Agreement or any
Transaction hereunder."
SECTION 6. Section 15(g) of the Existing Master Repurchase Agreement
is hereby amended by deleting it in its entirety and replacing it with the
following:
"(g) Breach of Financial Representation or Covenant or Obligation. A
breach by any Seller of any of the representations, warranties or covenants or
obligations set forth in Sections l3(a)(l), 13(a)(7), 13(a)(12), 13(a)(19),
13(a)(23), 14a, 00x, 00x, 00x, 00x, 00x, 00x, 00xx or 14cc of this Agreement."
SECTION 7. Section 32 of the Existing Repurchase Agreement is hereby
amended by adding the following sentence at the end thereof:
3
"Notwithstanding the foregoing or anything to the contrary contained
herein or in any other Program Agreement, the parties hereto may disclose to any
and all Persons, without limitation of any kind, the federal income tax
treatment of the Transactions, any fact relevant to understanding the federal
tax treatment of the Transactions, and all materials of any kind (including
opinions or other tax analyses) relating to such federal income tax treatment;
provided no Seller may disclose the name of or identifying information with
respect to Buyer or Agent or any pricing terms (including, without limitation,
the Pricing Rate, Purchase Price Percentage and Purchase Price) or other
nonpublic business or financial information (including any sublimits and
financial covenants) that is unrelated to the purported or claimed federal
income tax treatment of the Transactions and is not relevant to understanding
the purported or claimed federal income tax treatment of the Transactions,
without the prior written consent of the Buyer."
SECTION 8. Schedules. Representation and Warranty (yy) in Schedule 1
of the Existing Repurchase Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:
"(yy) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans are classified as High Cost Mortgage Loans."
SECTION 9. Exhibits. Exhibit D to the Existing Repurchase Agreement is
hereby amended by deleting it in its entirety and replacing it with Exhibit A to
this Amendment.
SECTION 10. Conditions Precedent. This Amendment shall become
effective on July 28, 2003 (the "Amendment Effective Date"), subject to the
satisfaction of the following conditions precedent:
10.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller; and
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 11. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 12. Limited Effect. Except as expressly amended and modified
by this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
4
SECTION 13. Counterparts. This Amendment may be executed by each of
the parties hereto on any number of separate counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
instrument.
SECTION 14. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
5
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ Illegible
------------------------------------
Name:
Title: Managing Director
Seller: NLC, INC.,
as Seller
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: CEO
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: CEO
EXHIBIT A TO AMENDMENT NO. 6
EXHIBIT D
OFFICER'S COMPLIANCE CERTIFICATE
I, , do hereby certify that I am duly
-----------------------------
elected, qualified and authorized officer of First NLC Financial Services, LLC
and NLC, Inc. ("Sellers"). This Certificate is delivered to you in connection
with Section 17b of the Master Repurchase Agreement dated as of December 20,
2001, among Sellers and Credit Suisse First Boston Mortgage Capital LLC (the
"Agreement"). I hereby certify that, as of the date of the financial statements
attached hereto and as of the date hereof, each Seller is and has been in
compliance with all the terms of the Agreement and, without limiting the
generality of the foregoing, I certify that:
(a) Adjusted Tangible Net Worth. For each quarter commencing after
December 31, 2000, First NLC has maintained an Adjusted Tangible Net Worth
greater than $10 million. A detailed summary of the calculation of First
NLC's actual Adjusted Tangible Net Worth is provided in Schedule 1 hereto.
(b) Indebtedness to Adjusted Tangible Net Worth Ratio. For each
quarter commencing after December 31, 2000, First NLC's ratio of
consolidated Indebtedness to consolidated Adjusted Tangible Net Worth has
not exceeded 20:1.
(c) Maintenance of Profitability. First NLC has not permitted, for any
Test Period, Net Income for such Test Period, before income taxes for such
Test Period and distributions made during such Test Period, to be less than
$1.00.
(d) Insurance. Each Seller or its Affiliates, has maintained, for such
Seller and its Subsidiaries, 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 or an aggregate amount of at least $ . The actual
------------
amount of such coverage is $ .
-------------
(e) Financial Statements. The financial statements attached hereto are
accurate and complete, accurately reflect the financial condition of First
NLC, and do not omit any material fact as of the date(s) thereof.
(f) Documentation. Each Seller has performed the documentation
procedures required by its operational guidelines with respect to
endorsements and assignments, including the recordation of assignments, or
has verified that such documentation procedures have been performed by a
prior holder of such Mortgage Loan.
(g) Compliance. Each Seller has observed or performed in all material
respects all of its covenants and other agreements, and satisfied every
condition, contained in the Agreement and the other Program Agreements to
be observed, performed and satisfied by it. [If a covenant or other
agreement or condition has not been
Ex. A-l
complied with by a Seller, such Seller shall describe such lack of
compliance and provide the date of any related waiver thereof.]
(h) Regulatory Action. Neither Seller is currently under investigation
or, to best of the related Seller's knowledge, no investigation by any
federal, state or local government agency is threatened. Neither Seller has
been the subject of any government investigation which has resulted in the
voluntary or involuntary suspension of a license, a cease and desist
order, or such other action as could adversely impact the related Seller's
business. [If so, the related Seller shall describe the situation in
reasonable detail and describe the action that such Seller has taken or
proposes to take in connection therewith.]
(i) No Default. No Default or Event of Default has occurred or is
continuing. [If any Default or Event of Default has occurred and is
continuing, the related Seller shall describe the same in reasonable detail
and describe the action such Seller has taken or proposes to take with
respect thereto, and if such Default or Event of Default has been expressly
waived by Buyer in writing, such Seller shall describe the Default or Event
of Default and provide the date of the related waiver.]
(j) Indebtedness. All Indebtedness (other than Indebtedness evidenced
by the Repurchase Agreement) of First NLC existing on the date hereof is
listed on Schedule 2 hereto.
(k) Purchased Mortgage Loans. Attached hereto as Schedule 3 is a true
and correct list of all Mortgage Loans purchased by Buyer and held by
Custodian pending repurchase.
(l) Originations. Attached hereto as Schedule 4 is a true and correct
summary of all Mortgage Loans originated by Buyer during the calendar
quarter ending on [DATE].
Ex. A-2
IN WITNESS WHEREOF, I have set my hand this day of
--------
, .
----------- ------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Ex. A-3
SCHEDULE 1 TO OFFICER'S COMPLIANCE CERTIFICATE
CALCULATIONS OF FINANCIAL COVENANTS
As of the quarter ended [Date]
--------------------------------------------------------------------------------
I. Adjusted Tangible Net Worth
--------------------------------------------------------------------------------
1. Net Worth (book) $
--------------------------------------------------------------------------------
Plus:
--------------------------------------------------------------------------------
2. Subordinated Debt (maturity > CSFB line maturity) $
--------------------------------------------------------------------------------
3. 1% of outstanding servicing portfolio balance $
--------------------------------------------------------------------------------
I.(a) Total of items 1-3 $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Less:
--------------------------------------------------------------------------------
4. Capitalized servicing balance $
--------------------------------------------------------------------------------
5. Goodwill $
--------------------------------------------------------------------------------
6. Receivables or advances due from shareholders,
affiliates, employees or related parties $
--------------------------------------------------------------------------------
7. Trademarks $
--------------------------------------------------------------------------------
8. Capitalized organizational expenses $
--------------------------------------------------------------------------------
9. Copyrights $
--------------------------------------------------------------------------------
10. Tradenames $
--------------------------------------------------------------------------------
11. Restricted Cash $
--------------------------------------------------------------------------------
12. Deferred Charges $
--------------------------------------------------------------------------------
13. Prepaid assets $
--------------------------------------------------------------------------------
14. Investments in related entities, partnerships $
--------------------------------------------------------------------------------
15. Any other intangible assets $
--------------------------------------------------------------------------------
I.(b) Total of items 4-15 $
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
I.(c) Actual Adjusted Tangible Net Worth (a minus b) $
--------------------------------------------------------------------------------
Adjusted Tangible Net Worth Covenant $
--------------------------------------------------------------------------------
Compliance? Yes/No
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
II. Leverage Ratio
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Debt divided by Adjusted Tangible Net Worth - Actual xx.x
--------------------------------------------------------------------------------
Leverage Covenant xx.x
--------------------------------------------------------------------------------
Compliance? Yes/No
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ex. A-4
SCHEDULE 2 TO OFFICER'S COMPLIANCE CERTIFICATE
INDEBTEDNESS as of
------------------------
--------------------------------------------------------------------------------
OUTSTANDING
LENDER TOTAL COMMITMENT INDEBTEDNESS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ex. A-5
SCHEDULE 3 TO OFFICER'S COMPLIANCE CERTIFICATE
PURCHASED MORTGAGE LOANS
Ex. A-6
SCHEDULE 4 TO OFFICER'S COMPLIANCE CERTIFICATE
OVERALL MORTGAGE LOAN ORIGINATIONS
--------------------------------------------------------------------------------
TOTAL NUMBER OF AGGREGATE PRINCIPAL
MORTGAGE LOANS BALANCE OF MORTGAGE
MORTGAGE LOAN TYPE ORIGINATED LOANS ORIGINATED
--------------------------------------------------------------------------------
Alt-A Mortgage Loans
--------------------------------------------------------------------------------
Conforming Mortgage Loans
--------------------------------------------------------------------------------
Jumbo Mortgage Loans
--------------------------------------------------------------------------------
Second Lien Mortgage Loans
--------------------------------------------------------------------------------
Sub-Prime Mortgage Loans
--------------------------------------------------------------------------------
Ex. A-7
EXECUTION VERSION
AMENDMENT NO. 5
TO MASTER REPURCHASE AGREEMENT
Amendment No. 5, dated as of May 28, 2003 (this "Amendment"), between
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC, INC. and
FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002, Amendment No. 2, dated as of September 3, 2002,
Amendment No. 3, dated as of December 19, 2002 and Amendment No. 4, dated as of
March 31, 2003 (the "Existing Repurchase Agreement"; as amended by this
Amendment, the "Repurchase Agreement"). Capitalized terms used but not otherwise
defined herein shall have the meanings given to them in the Existing Repurchase
Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Increased Maximum Aggregate Purchase Price Period. For
purposes of this Amendment, this Section 1 will be effective only during the
Increased Maximum Aggregate Purchase Price Period.
(a) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by adding the following defined terms, which amendment shall
be effective solely during the Increased Maximum Aggregate Purchase Price Period
(as defined below):
"Increased Maximum Aggregate Purchase Price Period" shall mean the
period beginning on May 28, 2003 through and including June 5, 2003."
(b) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by deleting the definition of "Maximum Aggregate
Purchase Price" in its entirety and replacing it with the following
language, which amendment shall be effective solely during the Increased
Maximum Aggregate Purchase Price Period:
"Maximum Aggregate Purchase Price" means $60,000,000 (SIXTY MILLION
DOLLARS).
SECTION 2. Conditions Precedent. This Amendment shall become effective
on May 28, 2003 (the "Amendment Effective Date"), subject to the satisfaction of
the following conditions precedent:
1
2.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller; and
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 3. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 4. Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 5. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
2
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ Illegible
------------------------------------
Name:
Title:
Seller: NLC, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name:
Title:
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name:
Title:
1
EXECUTION VERSION
AMENDMENT NO. 4
TO MASTER REPURCHASE AGREEMENT
Amendment No. 4, dated as of March 31, 2003 (this "Amendment"),
between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer'") and NLC,
INC. and FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002, Amendment No. 2, dated as of September 3, 2002 and
Amendment No. 3, dated as of December 19, 2002 (the "Existing Repurchase
Agreement"; as amended by this Amendment, the "Repurchase Agreement").
Capitalized terms used but not otherwise defined herein shall have the meanings
given to them in the Existing Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement
is hereby amended by deleting the definition of "Pricing Rate" and replacing it
with the following:
"Pricing Rate" means LIBOR plus:
(a) [*]% with respect to Transactions the subject of which are
Conforming Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans, Wet-Ink Mortgage Loans or Repurchased Mortgage Loans);
(b) [*]% with respect to Transactions the subject of which are
Sub-Prime Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans, Wet-Ink Mortgage Loans or Repurchased Mortgage Loans);
(c) [*]% with respect to Transactions the subject of which are
Alt A Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans, Wet-Ink Mortgage Loans or Repurchased Mortgage Loans);
(d) [*]% with respect to Transactions the subject of which are
Second Lien Mortgage Loans (other than Aged Loans, Wet-Ink Mortgage
Loans or Repurchased Mortgage Loans); and
(e) [*]% with respect to Transactions the subject of which are
Wet-Ink Mortgage Loans;
1
(f) [*]% with respect to Transactions the subject of which are
Aged Loans (other than Repurchased Mortgage Loans);
(g) [*]% with respect to Transactions the subject of which are
Repurchased Mortgage Loans; and
(h) the rate determined in the sole discretion of Buyer with
respect to Transactions the subject of which are Exception Mortgage
Loans.
The Pricing Rate shall change in accordance with LIBOR, as provided in
Section 5(a); provided, that in the event the daily average aggregate Purchase
Price of all Purchased Mortgage Loans subject to Transactions hereunder exceeds
the Pricing Rate Reduction Threshold in a calendar month, the Pricing Rate for
all Transactions that exceed the Pricing Rate Reduction Threshold shall be
reduced by [*]% for such calendar month, which reduction shall be applied to the
weighted average Pricing Rate and shall be reflected in the Price Differential
due on the next succeeding Price Differential Payment Date.
SECTION 2. Conditions Precedent. This Amendment shall become effective
on March 31, 2003 (the "Amendment Effective Date"), subject to the satisfaction
of the following conditions precedent:
2.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance.
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller; and
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 3. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 4. Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 5. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
2
STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
3
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ Illegible
------------------------------------
Name: Illegible
Title: Managing Director
Seller: NLC, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
4
EXECUTION VERSION
AMENDMENT NO. 3
TO MASTER REPURCHASE AGREEMENT
Amendment No. 3, dated as of December 19, 2002 (this "Amendment"),
between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC,
INC. and FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002 and Amendment No. 2, dated as of September 3, 2002
(the "Existing Repurchase Agreement"; as amended by this Amendment, the
"Repurchase Agreement"). Capitalized terms used but not otherwise defined herein
shall have the meanings given to them in the Existing Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement
is hereby amended as follows:
(a) By inserting the following language at the beginning thereof:
"All capitalized terms used herein but not defined shall have the
meanings set forth in the Custodial Agreement."
(b) By deleting the definition of "Alt A Mortgage Loan" in its
entirety and replacing it with the following:
"Alt A Mortgage Loan" means a first lien Mortgage Loan originated in
accordance with the criteria established by Buyer for Alt A Mortgage Loans, and
which has a FICO score of at least 600.
(c) By deleting the definition of "High Cost Mortgage Loan" in its
entirety and replacing it with the following:
"High Cost Mortgage Loan" means any Mortgage Loan classified as (a)
"high cost" loans under the Home Ownership and Equity Protection Act of 1994, as
amended or (b) "high cost," "threshold," "covered" or "predatory" loans under
any other applicable state, federal or local law.
1
(d) By deleting the definition of "Market Value" in its entirety and
replacing it with the following:
"Market Value" means, with respect to any Purchased Mortgage Loan as
of any date of determination, the whole-loan servicing released fair market
value of such Purchased Mortgage Loan on such date as determined by Buyer (or an
Affiliate thereof) in its sole discretion. Without limiting the generality of
the foregoing, each Seller acknowledges that (a) in the event that a Purchased
Mortgage Loan is not subject to a Take-out Commitment, Buyer may deem the Market
Value for such Mortgage Loan to be no greater than par and (b) the Market Value
of a Purchased Mortgage Loan may be reduced to zero by Buyer if:
(i) a breach of a representation, warranty or covenant made by
either Seller in this Agreement with respect to such Purchased
Mortgage Loan has occurred and is continuing;
(ii) such Purchased Mortgage Loan (other than a Repurchased
Mortgage Loan) is a Non-Performing Mortgage Loan;
(iii) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement (other than
to a Takeout Investor pursuant to a Bailee Letter) for a period in
excess of ten (10) calendar days;
(iv) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement to a
Take-out Investor pursuant to a Bailee Letter for a period in excess
of 45 calendar days;
(v) such Purchased Mortgage Loan has been subject to a
Transaction hereunder for a period of greater than (a) 90 days for all
Mortgage Loans other than Aged Loans or (b) 150 days with respect to
each Aged Loan;
(vi) such Purchased Mortgage Loan is a Repurchased Mortgage Loan
which has been subject to a Transaction hereunder for a period of
greater than 180 days;
(vii) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for
which the Mortgage File has not been delivered to the Custodian on or
prior to the seventh Business Day after the related Purchase Date;
(viii) when the Purchase Price for such Purchased Mortgage Loan
is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all Wet-Ink Mortgage Loans that are Purchased Mortgage Loans
exceeds 35% of the Maximum Aggregate Purchase Price;
(ix) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all One Hundred and Twenty Day Aged Mortgage Loans exceeds $3.5
million;
2
(x) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all One Hundred and Fifty Day Aged Mortgage Loans exceeds $1.3
million;
(xi) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Second Lien Mortgage Loans that are Purchased Mortgage Loans
exceeds $5.0 million; or
(xii) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Repurchased Mortgage Loans that are Purchased Mortgage Loans
exceeds $2.5 million; or
(xiii) such Purchased Mortgage Loan is a Repurchased Mortgage
Loan for which the Mortgaged Property has been foreclosed upon or has
been converted to REO Property.
(e) By deleting the definition of "Post Default Rate" in its entirety
and replacing it with the following:
"Post Default Rate" means an annual rate of interest equal to the
greater of (a) the Pricing Rate plus 3% or (b) the Mortgage Interest Rate.
(f) By deleting the definition of "Pricing Rate Reduction Threshold"
and replacing it with the following:
"Pricing Rate Reduction Threshold" means 50% of the Maximum Aggregate
Purchase Price.
(g) By deleting the definition of "Repurchased Mortgage Loans" and
replacing it with the following:
"Repurchased Mortgage Loan" means a Mortgage Loan (a) which is
repurchased by a Seller from DLJ Mortgage Capital, Inc. as a result of a breach
of representations and warranties under the agreed upon terms in which the
claimed breach is not a result of fraud or material misrepresentation of fact by
any party to the Mortgage Loan or consumer credit law violation, (b) where the
claimed breach is expressly identified to Buyer in writing and (c) which is
subject to a Transaction hereunder for no more than 180 days. In no event will a
Repurchased Mortgage Loan be subject to a Transaction hereunder as a
"Repurchased Mortgage Loan" if (i) there is a breach of representation and
warranty in respect of such Repurchased Mortgage Loan other than the breach
identified in writing to the Buyer pursuant to subclause (b) of this definition
or (ii) the related Mortgaged Property has been foreclosed upon or has been
converted to REO Property.
(h) By deleting the definition of "Servicer" in its entirety and
replacing it with the following:
3
"Servicer" means either First NLC or Fairbanks, or any other servicer
approved by Buyer in its sole discretion.
(i) By deleting the definition of "Termination Date" and replacing it
with the following:
"Termination Date" means the earlier of July 31, 2003 and (b) the date
of the occurrence and continuance of an Event of Default.
(j) By inserting the following definitions in their proper
alphabetical order:
"E&O Insurance" means insurance coverage with respect to employee
errors, omissions, 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 acceptable to Xxxxxx Xxx
and Xxxxxxx Mac.
"Fairbanks" means Fairbanks Capital Corp., a corporation organized and
existing under the laws of the State of Utah, or any successor in interest
thereto.
SECTION 2. Remedies Upon Default. Section 16(d) of the Existing Master
Repurchase Agreement is hereby amended by adding the phrase "and liquidate all
Repurchase Assets" at the end of the third sentence thereof, and by adding the
following language at the end thereof:
"Buyer shall also be entitled, in its sole discretion to elect, in
lieu of selling all or a portion of such Purchased Mortgage Loans, to give
Seller 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 Prices and any other amounts owing by the Seller
hereunder."
SECTION 3. Reports. Section 17(a) of the Existing Master Repurchase
Agreement is hereby amended by adding the following subclauses (8) and (9) at
the end thereof:
"(8) as soon as available, and in any event within thirty (30) days of
receipt, copies of relevant portions of all final written Agency, FHA, VA,
Governmental Authority and investor audits, examinations, evaluations,
monitoring reviews and reports of its operations (including those prepared on a
contract basis) which provide for or relate to (i) material corrective action
required, (ii) material sanctions proposed, imposed or required, including
without limitation notices of defaults, notices of termination of approved
status, notices of imposition of supervisory agreements or interim servicing
agreements, and notices of probation, suspension, or non-renewal, or (iii)
"report cards," "grades" or other classifications of the quality of Sellers'
operations."
"(9) as soon as reasonably possible, notice of any material change in
the existing Indebtedness of either Seller, including without limitation, any
default, renewal, non-renewal, termination, increase in available amount or
decrease in available amount related thereto."
4
SECTION 4. Authorizations. The Existing Master Repurchase Agreement is
hereby amended by adding the following Section 37:
"Authorizations. Any of the persons whose signatures and titles appear
on Schedule 2 are authorized, acting singly for either Seller or the Buyer, as
the case may be, under this Agreement."
SECTION 5. Schedule 1: Representations and Warranties. The Existing
Master Repurchase Agreement is hereby amended by adding the following paragraph
prior to paragraph (a) of Schedule 1 to the Existing Master Repurchase
Agreement:
"With respect to each Purchased Mortgage Loan, each Seller jointly and
severally represents and warrants to Buyer that each of the following
representations and warranties are true and correct, except with respect to any
Repurchased Mortgage Loan in which the claimed breach of the representation or
warranty is expressly identified to Buyer in writing pursuant to clause (b) of
the definition of Repurchased Mortgage Loan."
SECTION 6. Schedule 2: Authorized Representatives. The Existing Master
Repurchase Agreement is hereby amended by adding Schedule 1 of this Amendment as
Schedule 2 to the Existing Master Repurchase Agreement.
SECTION 7. Conditions Precedent. This Amendment shall become effective
on December 19, 2002 (the "Amendment Effective Date"), subject to the
satisfaction of the following conditions precedent:
7.1 Delivered Documents. On the Amendment Effective Date, the
Buyer shall have received the following documents, each of which shall be
satisfactory to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller;
(b) evidence that the Seller has added the Buyer as loss payee under
the Sellers' E&O Insurance policies; and
(c) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 8. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 9. Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
5
SECTION 10. Counterparts. This Amendment may be executed by each of
the parties hereto on any number of separate counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
instrument.
SECTION 11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ Illegible
------------------------------------
Name:
Title: Managing Director
Seller: NLC, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name:
Title:
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name:
Title:
Schedule 1-1
SCHEDULE 1 TO AMENDMENT NO. 3
SCHEDULE 2
AUTHORIZED REPRESENTATIVES
SELLER NOTICES
Address:
Name:
Telephone:
Facsimile:
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized,
acting singly, to act for Seller under this Agreement:
Name Title Signature
------------------- -------------- -----------------------
XXXXXXX X. XXXXXXXX PRESIDENT /s/ XXXXXXX X. XXXXXXXX
-----------------------
XXXX XXXXXXXX CHAIRMAN & CEO /s/ XXXX XXXXXXXX
-----------------------
Schedule 1-1
EXECUTION VERSION
AMENDMENT NO. 2
TO MASTER REPURCHASE AGREEMENT
Amendment No. 2, dated as of September 3, 2002 (this "Amendment"),
between CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC,
INC. and FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001, as amended by Amendment No.
1, dated as of May 2, 2002 (the "Existing Repurchase Agreement"; as amended by
this Amendment, the "Repurchase Agreement"). Capitalized terms used but not
otherwise defined herein shall have the meanings given to them in the Existing
Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions. Section 2 of the Existing Repurchase Agreement
is hereby amended as follows:
(a) The definition of "Aged Loan" is hereby deleted in its entirety
and replaced with the following:
"Aged Loan" means a One Hundred Twenty Day Aged Mortgage Loan other
than a Repurchased Mortgage Loan or a One Hundred Fifty Day Aged Mortgage Loan
other than a Repurchased Mortgage Loan, as applicable.
(b) The definition of "Exception Mortgage Loan" is hereby amended by
adding the following language at the end of the first sentence thereof:
(c) "; provided, however, that the Sellers shall pay to Buyer a fee of
$[*] with respect to any such approval of an Exception Mortgage Loan other than
a Wet-Ink Mortgage Loan and $[*] with respect to any such approval of an
Exception Mortgage Loan which is a Wet-Ink Mortgage Loan provided, that upon 30
day's notice to the Sellers, Buyer may change such Exception Mortgage Loan
approval fee."
(d) The definition of "Maximum Aggregate Purchase Price" is hereby
deleted in its entirety and replaced with the following:
""Maximum Aggregate Purchase Price" means FIFTY MILLION DOLLARS
($50,000,000)."
1
(e) The definition of "Market Value" is hereby amended by deleting it
in its entirety and replacing it with the following:
"Market Value" means, with respect to any Purchased Mortgage Loan as
of any date of determination, the whole-loan servicing released fair market
value of such Purchased Mortgage Loan on such date as determined by Buyer (or an
Affiliate thereof) in its sole discretion. Without limiting the generality of
the foregoing, each Seller acknowledges that (a) in the event that a Purchased
Mortgage Loan is not subject to a Take-out Commitment, Buyer may deem the Market
Value for such Mortgage Loan to be no greater than par and (b) the Market Value
of a Purchased Mortgage Loan may be reduced to zero by Buyer if:
(i) a breach of a representation, warranty or covenant made by
either Seller in this Agreement with respect to such Purchased
Mortgage Loan has occurred and is continuing;
(ii) such Purchased Mortgage Loan is a Non-Performing Mortgage
Loan;
(iii) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement (other than
to a Takeout Investor pursuant to a Bailee Letter) for a period in
excess of ten (10) calendar days;
(iv) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement to a
Take-out Investor pursuant to a Bailee Letter for a period in excess
of 45 calendar days;
(v) such Purchased Mortgage Loan has been subject to a
Transaction hereunder for a period of greater than (a) 90 days for all
Mortgage Loans other than Aged Loans or (b) 150 days with respect to
each Aged Loan;
(vi) such Purchased Mortgage Loan is a Repurchased Mortgage Loan
which has been subject to a Transaction hereunder for a period of
greater than 180 days;
(vii) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for
which the Mortgage File has not been delivered to the Custodian on or
prior to the seventh Business Day after the related Purchase Date;
(viii) when the Purchase Price for such Purchased Mortgage Loan
is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all Wet-Ink Mortgage Loans that are Purchased Mortgage Loans
exceeds 35% of the Maximum Aggregate Purchase Price;
(ix) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all One Hundred and Twenty Day Aged Mortgage Loans exceeds $3.5
million;
2
(x) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all One Hundred and Fifty Day Aged Mortgage Loans exceeds $1.3
million;
(xi) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Second Lien Mortgage Loans that are Purchased Mortgage Loans
exceeds $5.0 million; or
(xii) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Repurchased Mortgage Loans that are Purchased Mortgage Loans
exceeds $2.5 million."
(f) The definition of "Mortgage Loan" is hereby amended by inserting
the phrase "Repurchased Mortgage Loan," after "Sub-Prime Mortgage Loan," in the
first line thereof.
(g) By deleting the definition of "Pricing Rate" in its entirety and
replacing it with the following:
"Pricing Rate" means LIBOR plus:
(a) [*]% with respect to Transactions the subject of which are
Conforming Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans, Wet-Ink Mortgage Loans or Repurchased Mortgage Loans);
(b) [*]% with respect to Transactions the subject of which are
Sub-Prime Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans, Wet-Ink Mortgage Loans or Repurchased Mortgage Loans);
(c) [*]% with respect to Transactions the subject of which are
Alt A Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans, Wet-Ink Mortgage Loans or Repurchased Mortgage Loans);
(d) [*]% with respect to Transactions the subject of which are
Second Lien Mortgage Loans (other than Aged Loans, Wet-Ink Mortgage
Loans or Repurchased Mortgage Loans); and
(e) [*]% with respect to Transactions the subject of which are
Wet-Ink Mortgage Loans;
(f) [*]% with respect to Transactions the subject of which are
Aged Loans (other than Repurchased Mortgage Loans);
(g) [*]% with respect to Transactions the subject of which are
Repurchased Mortgage Loans; and
3
(h) the rate determined in the sole discretion of Buyer with
respect to Transactions the subject of which are Exception Mortgage
Loans.
The Pricing Rate shall change in accordance with LIBOR, as provided in
Section 5(a); provided, that in the event the daily average aggregate Purchase
Price of all Purchased Mortgage Loans subject to Transactions hereunder exceeds
the Pricing Rate Reduction Threshold in a calendar month, the Pricing Rate for
all Transactions that exceed the Pricing Rate Reduction Threshold shall be
reduced by [*]% for such calendar month, which reduction shall be applied to
the weighted average Pricing Rate and shall be reflected in the Price
Differential due on the next succeeding Price Differential Payment Date.
(h) The definition of "Purchase Price" is hereby amended by deleting
it in its entirety and replacing it with the following:
"Purchase Price" means the price at which each Mortgage Loan is
transferred by a Seller to Buyer, which shall equal:
(a) on the Purchase Date, in the case of Purchased Mortgage Loans
other than One Hundred and Twenty Day Aged Mortgage Loans, One Hundred
and Fifty Day Aged Mortgage Loans or Repurchased Mortgage Loans, the
lesser of either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, the product of (1) the outstanding principal
amount thereof as set forth in the Mortgage Loan Schedule and
Exception Report multiplied by (2) the applicable Purchase Price
Percentage for such Mortgage Loan or (y) in the case of CSFBMC
Mortgage Loans, [*] as set forth in the Mortgage Loan Schedule and
Exception Report, and
(B) the product of (1) the Market Value of such Purchased
Mortgage Loan multiplied by (2) the applicable Purchase Price
Percentage for such Mortgage Loan; or
(b) on the Purchase Date, in the case of Purchased Mortgage Loans
which are One Hundred and Twenty Day Aged Mortgage Loans other than
Repurchased Mortgage Loans, the lesser of either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, [*]% of the outstanding principal amount
thereof as set forth in the Mortgage Loan Schedule and Exception
Report or (y) in the case of CSFBMC Mortgage Loans, [*] as set forth
in the Mortgage Loan Schedule and Exception Report, and
(B) the product of (1) the Market Value of such Purchase Mortgage
Loan multiplied by (2) the applicable Purchase Price Percentage for
such Mortgage Loan; or
4
(c) on the Purchase Date, in the case of Purchased Mortgage Loans
which are One Hundred and Fifty Day Aged Mortgage Loans other than
Repurchased Mortgage Loans, the lesser of either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, [*]% of the outstanding principal amount
thereof as set forth in the Mortgage Loan Schedule and Exception
Report or (y) in the case of CSFBMC Mortgage Loans, [*] as set forth
in the Mortgage Loan Schedule and Exception Report, and
(B) the product of (1) the Market Value of such Purchase Mortgage
Loan multiplied by (2) the applicable Purchase Price Percentage for
such Mortgage Loan; and
(d) On the Purchase Date, in the case of Purchased Mortgage Loans
which are Repurchased Mortgage Loans, the lesser of (1) [*]% of the
value reflected in the most recent BPO, (2) [*]% of the outstanding
principal balance thereof as set forth in the related Mortgage Loan
Schedule multiplied by the applicable Purchase Price Percentage or (3)
[*]% of the Market Value of such Mortgage Loan; and
(e) after the Purchase Date, except where Buyer and a Seller
agree otherwise, the amount determined under the preceding clauses
(a), (b), (c) or (d) decreased by the amount of any cash transferred
by a Seller to Buyer pursuant to Section 4(c) hereof or applied to
reduce the Sellers' obligations under clause (ii) of Section 4(b)
hereof.
(i) By inserting the following definitions in their proper
alphabetical order:
"BPO" means an opinion of the fair market value of a Mortgaged
Property given by a licensed real estate agent or broker which generally
includes three comparable sales and three comparable listings.
"Pricing Rate Reduction Threshold" means $25,000,000.
"Repurchased Mortgage Loan" means a Mortgage Loan (a) which is
repurchased by a Seller from DLJ Mortgage Capital, Inc. as a result of a breach
of representations and warranties under the agreed upon terms in which the
claimed breach is not a result of fraud or material misrepresentation of fact by
any party to the Mortgage Loan or consumer credit law violation, (b) where the
claimed breach is expressly identified to Buyer in writing and (c) which is
subject to a Transaction hereunder for no more than 180 days. In no event will a
Repurchased Mortgage Loan be subject to a Transaction hereunder as a
"Repurchased Mortgage Loan" if there is a breach of representation and warranty
in respect of such Repurchased Mortgage Loan other than the breach identified in
writing to the Buyer pursuant to subclause (b) of this definition.
5
SECTION 2. Program; Initiation of Transactions. Section 3 of the
Existing Master Repurchase Agreement is hereby amended by inserting the
following language at the end of subclause (b):
SECTION 3. "In the event the Mortgage Loan Schedule provided by a
Seller contains erroneous computer data, is not formatted properly or the
computer fields are otherwise improperly aligned, Buyer shall provide written or
electronic notice to such Seller describing such error and Seller may either (i)
give Buyer written or electronic authority to correct the computer data,
reformat such Mortgage Loan Schedule or properly align the computer fields or
(ii) correct the computer data, reformat the Mortgage Loan Schedule or properly
align the computer fields itself and resubmit the Mortgage Loan Schedule as
required herein. In the event that a Seller gives Buyer authority to correct the
computer data, reformat the Mortgage Loan Schedule or properly align the
computer fields, such Seller shall pay $10 per change and any other direct
expenses incurred by Buyer; provided, that upon 30 day's notice to the Sellers,
Buyer may change such computer correction fee. The Sellers shall hold Buyer
harmless for such correction, reformatting or realigning, as applicable, except
as otherwise expressly provided herein."
SECTION 4. Covenants. Section 14 of the Existing Repurchase Agreement
is hereby amended as follows:
(a) By deleting subclause (a) in its entirety and replacing it with
the following:
"Adjusted Tangible Net Worth. First NLC shall maintain an Adjusted
Tangible Net Worth of at least $7.5 million."
(b) By deleting subclause (w) in its entirety and replacing it with
the following:
"Indebtedness. Sellers shall not incur any additional material
Indebtedness in excess of $100,000 in the aggregate (other than (i) the Existing
Indebtedness in amounts not to exceed the amounts specified on Exhibit J hereto,
(ii) usual and customary accounts payable for a mortgage company and (iii)
equipment and office leases related to the business of the Sellers) without the
prior written consent of Buyer."
SECTION 5. Conditions Precedent. This Amendment shall become effective
on September 3, 2002 (the "Amendment Effective Date"), subject to the
satisfaction of the following conditions precedent:
5.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller;
6
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 6. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 7. Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 8. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
SECTION 9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
7
EXECUTION VERSION
AMENDMENT NO. 1
TO MASTER REPURCHASE AGREEMENT
Amendment No. 1, dated as of May 2, 2002 (this "Amendment"), between
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the "Buyer") and NLC, INC. and
FIRST NLC FINANCIAL SERVICES, LLC (collectively, the "Sellers").
RECITALS
The Buyer and the Sellers are parties to that certain Master
Repurchase Agreement, dated as of December 20, 2001 (the "Existing Repurchase
Agreement"; as amended by this Amendment, the "Repurchase Agreement").
Capitalized terms used but not otherwise defined herein shall have the meanings
given to them in the Existing Repurchase Agreement.
The Buyer and the Sellers have agreed, subject to the terms and
conditions of this Amendment, that the Existing Repurchase Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Repurchase
Agreement.
Accordingly, the Buyer and the Sellers hereby agree, in consideration
of the mutual premises and mutual obligations set forth herein, that the
Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Definitions.
(a) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by adding the following defined term, which amendment shall
be effective solely during the Increased Maximum Aggregate Purchase Price Period
(as defined below):
""Increased Maximum Aggregate Purchase Price Period" shall mean the
period beginning on the date hereof through and including June 30,
2002."
(b) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by deleting the definition of "Maximum Aggregate Purchase
Price" in its entirety and replacing it with the following language, which
amendment shall be effective solely during the Increased Maximum Aggregate
Purchase Price Period:
""Maximum Aggregate Purchase Price" means THIRTY FIVE MILLION DOLLARS
($35,000,000)."
(c) Section 2 of the Existing Repurchase Agreement is hereby
temporarily amended by deleting the definition of "Market Value" in its entirety
and replacing it with the following language, which amendment shall be effective
solely during the Increased Maximum Aggregate Purchase Price Period:
"Market Value" means, with respect to any Purchased Mortgage Loan as
of any date of determination, the whole-loan servicing released fair market
value of such Purchased Mortgage Loan on such date as determined by Buyer (or an
Affiliate thereof) in its sole
1
discretion. Without limiting the generality of the foregoing, each Seller
acknowledges that (a) in the event that a Purchased Mortgage Loan is not subject
to a Take-out Commitment, Buyer may deem the Market Value for such Mortgage Loan
to be no greater than par and (b) the Market Value of a Purchased Mortgage Loan
may be reduced to zero by Buyer if:
(i) a breach of a representation, warranty or covenant made by
either Seller in this Agreement with respect to such Purchased
Mortgage Loan has occurred and is continuing;
(ii) such Purchased Mortgage Loan is a Non-Performing Mortgage
Loan;
(iii) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement (other than
to a Takeout Investor pursuant to a Bailee Letter) for a period in
excess of ten (10) calendar days;
(iv) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement to a
Take-out Investor pursuant to a Bailee Letter for a period in excess
of 45 calendar days;
(v) such Purchased Mortgage Loan has been held by the Custodian
for the benefit of Buyer (in its capacity as Buyer hereunder or as a
secured lender) for a period of greater than (a) 90 days for all
Mortgage Loans other than Aged Loans or (b) 150 days with respect to
each Aged Loan;
(vi) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for
which the Mortgage File has not been delivered to the Custodian on or
prior to the seventh Business Day after the related Purchase Date;
(vii) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Wet-Ink Mortgage Loans that are Purchased Mortgage Loans
exceeds $12.25 million;
(viii) when the Purchase Price for such Purchased Mortgage Loan
is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all One Hundred and Twenty Day Aged Mortgage Loans exceeds
$3.5 million;
(ix) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all One Hundred and Fifty Day Aged Mortgage Loans exceeds $1.3
million;
(x) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Second Lien Mortgage Loans that are Purchased Mortgage Loans
exceeds $3.5 million."
2
SECTION 2. Conditions Precedent. This Amendment shall become effective
on May 2, 2002 (the "Amendment Effective Date"), subject to the satisfaction of
the following conditions precedent:
2.1 Delivered Documents. On the Amendment Effective Date, the Buyer
shall have received the following documents, each of which shall be satisfactory
to the Buyer in form and substance:
(a) this Amendment, executed and delivered by a duly authorized
officer of the Buyer and each Seller;
(b) such other documents as the Buyer or counsel to the Buyer may
reasonably request.
SECTION 3. Representations and Warranties. The Sellers hereby
represent and warrant to the Buyer that they are in compliance with all the
terms and provisions set forth in the Repurchase Agreement on their part to be
observed or performed, and that no Event of Default has occurred or is
continuing, and hereby confirm and reaffirm the representations and warranties
contained in Section 13 of the Repurchase Agreement.
SECTION 4. Limited Effect. Except as expressly amended and modified by
this Amendment, the Existing Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
SECTION 5. Counterparts. This Amendment may be executed by each of the
parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument.
SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.
[SIGNATURE PAGE FOLLOWS]
3
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
Buyer: CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC,
as Buyer
By: /s/ Illegible
------------------------------------
Name:
Title:
Seller: NLC, INC.,
as Seller
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: EXECUTIVE VICE PRESIDENT
Seller: FIRST NLC FINANCIAL SERVICES, LLC,
as Seller
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------------
Name: XXXXXXX X. XXXXXXXX
Title: EXECUTIVE VICE PRESIDENT
1
================================================================================
EXECUTION VERSION
MASTER REPURCHASE AGREEMENT
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as buyer ("Buyer") and
FIRST NLC FINANCIAL SERVICES, LLC, as seller ("Seller") and
NLC, Inc., as seller ("Seller" and together with
First NLC Financial Services, LLC, "Sellers")
Dated December 20, 2001
================================================================================
TABLE OF CONTENTS
Page
----
1. Applicability............................................................1
2. Definitions..............................................................1
3. Program; Initiation of Transactions.....................................18
4. Repurchase..............................................................19
5. Price Differential......................................................20
6. Margin Maintenance......................................................20
7. Income Payments.........................................................21
8. Security Interest.......................................................22
9. Payment and Transfer....................................................22
10. Conditions Precedent....................................................23
11. Program; Costs..........................................................25
12. Servicing...............................................................26
13. Representations and Warranties..........................................27
14. Covenants...............................................................36
15. Events of Default.......................................................39
16. Remedies Upon Default...................................................38
17. Reports.................................................................40
18. Repurchase Transactions.................................................42
19. Single Agreement........................................................42
20. Notices and Other Communications........................................43
21. Entire Agreement; Severability..........................................44
22. Non assignability.......................................................44
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23. Set-off.................................................................45
24. Binding Effect; Governing Law; Jurisdiction.............................45
25. No Waivers, Etc.........................................................45
26. Intent..................................................................46
27. Disclosure Relating to Certain Federal Protections......................46
28. Power of Attorney.......................................................47
29. Buyer May Act Through Affiliates........................................47
30. Indemnification; Obligations............................................47
31. Counterparts............................................................48
32. Confidentiality.........................................................48
33. Recording of Communications.............................................48
34. Non-Utilization Fee.....................................................48
35. Periodic Due Diligence Review...........................................48
36. Joint and Several Obligations...........................................49
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SCHEDULES
Schedule 1 - Representations and Warranties with Respect to Purchased Mortgage
Loans
ANNEXES
Annex I - Non-Utilization Fee Formula
EXHIBITS
Exhibit A - Form of Transaction Request
Exhibit B - Form of Purchase Confirmation
Exhibit C - Form of Mortgage Loan Schedule and Exception Report
Exhibit D - Form of Officer's Compliance Certificate
Exhibit E - Form of Opinion of Sellers' counsel
Exhibit F - Underwriting Guidelines
Exhibit G - Authorized Signatories of Sellers
Exhibit H - Corporate Resolutions of Sellers
Exhibit I - Sellers' Tax Identification Number
Exhibit J - Existing Indebtedness
Exhibit K - Wet-Ink Procedures
Exhibit L - Escrow Instruction Letter
Exhibit M - Custodial and Bank Fee Schedule
Exhibit N - Form of Servicer Notice
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1. Applicability
From time to time the parties hereto may enter into transactions in
which Sellers agree to transfer to Buyer Mortgage Loans (as hereinafter defined)
against the transfer of funds by Buyer, with a simultaneous agreement by Buyer
to transfer to Sellers such Mortgage Loans at a date certain or on demand,
against the transfer of funds by Sellers. Each such transaction shall be
referred to herein as a "Transaction" and, unless otherwise agreed in writing,
shall be governed by this Agreement, including any supplemental terms or
conditions contained in any annexes identified herein, as applicable hereunder.
2. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
"Acceptable State" means any state acceptable pursuant to Sellers'
Underwriting Guidelines.
"Accepted Servicing Practices" means, 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.
"Act of Insolvency" means, with respect to any Person or its
Affiliates, (i) the filing of a petition, commencing, or authorizing the
commencement of any case or proceeding, or the voluntary joining of any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law relating to the protection of creditors, or suffering
any such petition or proceeding to be commenced by another which is consented
to, not timely contested or results in entry of an order for relief; (ii) the
seeking of the appointment of a receiver, trustee, custodian or similar official
for such party or an Affiliate or any substantial part of the property of
either; (iii) the appointment of a receiver, conservator, or manager for such
party or an Affiliate by any governmental agency or authority having the
jurisdiction to do so; (iv) the making or offering by such party or an Affiliate
of a composition with its creditors or a general assignment for the benefit of
creditors; (v) the admission by such party or an Affiliate of such party of its
inability to pay its debts or discharge its obligations as they become due or
mature; or (vi) that any governmental authority or agency or any person, agency
or entity acting or purporting to act under governmental authority shall have
taken any action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the property of such party or of any
of its Affiliates, or shall have taken any action to displace the management of
such party or of any of its Affiliates or to curtail its authority in the
conduct of the business of such party or of any of its Affiliates.
"Adjusted Tangible Net Worth" means, for any Person, such Person's Net
Worth plus 1% of the outstanding servicing portfolio balance of such Person plus
Subordinated Debt (provided that Subordinated Debt shall not be taken into
account to the extent that it would be cause greater than 25% of Adjusted
Tangible Net Worth to be comprised of Subordinated Debt),
minus intangible assets (as reflected on such Person's balance sheet in
accordance with GAAP) such as capitalized servicing rights, goodwill and
trademarks, minus notes receivable from shareholders or affiliates.
"Affiliate" means, with respect to any Person, any "affiliate" of such
Person, as such term is defined in the Bankruptcy Code.
"Aged Loan" means a One Hundred Twenty Day Aged Mortgage Loan or a One
Hundred Fifty Day Aged Mortgage Loan.
"Agency" means Xxxxxxx Mac, Xxxxxx Xxx or GNMA, as applicable.
"Agency Security" means a mortgage-backed security issued by an
Agency.
"Agent" means Credit Suisse First Boston Mortgage Capital LLC or any
affiliate or successor thereto.
"Agreement" means this Master Repurchase Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
"Alt A Mortgage Loan" means a Mortgage Loan originated in accordance
with the criteria established by Buyer for Alt-A Mortgage Loans, as determined
by Buyer in its sole discretion.
"Appraised Value" means 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 Tape" means a remittance report on a monthly basis or requested
by Buyer pursuant to Section 17d hereof containing servicing information,
including, without limitation, those fields reasonably requested by Buyer from
time to time, on a loan-by-loan basis and in the aggregate, with respect to the
Purchased Mortgage Loans serviced by First NLC or any Servicer for the month (or
any portion thereof) prior to the Reporting Date.
"Assignment of Mortgage" means an assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to Buyer.
"Bailee Letter" has the meaning assigned to such term in the Custodial
Agreement.
"Bankruptcy Code" means the United States Bankruptcy Code of 1978, as
amended from time to time.
"Bid" has the meaning set forth in Section 4(c) hereof.
"Bid Fee" has the meaning set forth in Section 4(c) hereof.
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"Business Day" means any day other than (A) a Saturday or Sunday and
(B) a public or bank holiday in New York City.
"Buyer" means Credit Suisse First Boston Mortgage Capital LLC, and any
successor hereunder.
"Buyer's Margin Amount" means with respect to any Transaction as of
any date of determination, an amount equal to the product of (A) Buyer's Margin
Percentage and (B) the Purchase Price for such Transaction.
"Buyer's Margin Percentage" means, with respect to any Transaction as
of any date, a percentage equal to the percentage obtained by dividing the (A)
Market Value of the Purchased Mortgage Loans on the Purchase Date for such
Transaction by (B) the Purchase Price on the Purchase Date for such Transaction;
provided, that, with respect to any Mortgage Loan which was not an Exception
Mortgage Loan or Aged Loan on the related Purchase Date and which, as of the
date of determination, is an Exception Mortgage Loan or Aged Loan, Buyer's
Margin Percentage as of such date of determination shall be equal to the
percentage obtained by dividing (A) the Market Value of such Mortgage Loan on
the related Purchase Date by (B) the amount the Purchase Price would have been
on the Purchase Date if such Mortgage Loan had been categorized as the type of
Mortgage Loan (e.g., Exception Mortgage Loan, Aged Loan, etc.) that it is
categorized on the date of determination.
"Calmco" means Vesta Servicing L.P., or any successor in interest
thereto.
"Capital Lease Obligations" means, 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 Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"Change in Control" means:
(A) any transaction or event as a result of which Xxxx Xxxxxxxx,
Xxxxxxx Xxxxxxxx and Sun Mortgage Partners, L.P., cease to own, in the
aggregate, beneficially or of record, at least 51% of the stock of or
membership interest in the Sellers;
(B) the sale, transfer, or other disposition of all or substantially
all of either Seller's assets (excluding any such action taken in
connection with any securitization transaction); or
(C) the consummation of a merger or consolidation of either Seller
with or into another entity or any other corporate reorganization, if more
than 50% of the combined voting power of the continuing or surviving
entity's stock or equity interest outstanding immediately after such
merger, consolidation or such other reorganization is owned by persons who
were not stockholders or members of such Seller immediately prior to such
merger, consolidation or other reorganization.
-3-
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" means one or more accounts established by the
Servicer into which all collections and proceeds on or in respect of the
Mortgage Loans shall be deposited by Servicer.
"Committed Mortgage Loan" means a Mortgage Loan which is the subject
of a Take-out Commitment with a Take-out Investor.
"Conforming Mortgage Loan" means a Mortgage Loan originated in
accordance with the criteria of an Agency for purchase of Mortgage Loans,
including, without limitation, conventional Mortgage Loans, FHA Loans and VA
Loans, as determined by Buyer in its sole discretion.
"Custodial Agreement" means the custodial agreement dated as of the
date hereof, among Sellers, Buyer and Custodian as the same may be amended from
time to time.
"Custodian" means LaSalle Bank, National Association or such other
party specified by Buyer and agreed to by Sellers, which approval shall not be
unreasonably withheld.
"CSFBMC Mortgage Loan" means any Committed Mortgage Loan which is the
subject of a Take-out Commitment with Buyer or any Affiliate of Buyer as
Take-out Investor.
"Default" means an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Due Date" means the day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
"Effective Date" means the date upon which the conditions precedent
set forth in Section 10 shall have been satisfied.
"Electronic Tracking Agreement" means an Electronic Tracking Agreement
among Buyer, Sellers, MERS and MERSCORP, Inc., to the extent applicable.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which any Seller is a member and (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 any
Seller is a member.
-4-
"Escrow Instruction Letter" means the Escrow Instruction Letter from
the related Seller to the Settlement Agent, in the form of Exhibit L hereto, as
the same may be modified, supplemented and in effect from time to time.
"Escrow Payments" means, 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.
"Event of Default" has the meaning specified in Section 15 hereof.
"Event of Termination" means with respect to either Seller (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 with 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 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.
"Exception Mortgage Loan" means any Mortgage Loan which is otherwise
ineligible for purchase hereunder, or which otherwise becomes ineligible for
purchase hereunder and which is approved by Buyer in its sole discretion. The
Pricing Rate, Market Value, Purchase Price and Buyer's Margin Percentage with
respect to Exception Mortgage Loans shall be set in the sole discretion of
Buyer. Buyer may at any time, and in its sole discretion, no longer consider a
Mortgage Loan an Exception Mortgage Loan, in which case such Mortgage Loan shall
have a Market Value of zero.
"Existing Indebtedness" has the meaning specified in Section 13(a)(24)
hereof.
"Xxxxxx Xxx" means Xxxxxx Mae, the government sponsored enterprise
formerly known as the Federal National Mortgage Association.
-5-
"FHA" means 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" means 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" means a Mortgage Loan which is the subject of an FHA
Mortgage Insurance Contract.
"FHA Mortgage Insurance" means, mortgage insurance authorized under
the National Housing Act, as amended from time to time, and provided by the FHA.
"FHA Mortgage Insurance Contract" means the contractual obligation of
the FHA respecting the insurance of a Mortgage Loan.
"FHA Regulations" means 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.
"First NLC" means First NLC Financial Services, LLC or its permitted
successors and assigns.
"Foreclosed Loan" means a Mortgage Loan, the property securing which
has been foreclosed upon by a Seller.
"Xxxxxxx Mac" means the Federal Home Loan Mortgage Corporation.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America and applied on a consistent basis.
"GNMA" means the Government National Mortgage Association and any
successor thereto.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions over any Seller or
Buyer, as applicable.
"Gross Margin" means, with respect to each adjustable rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note.
"Guarantee" means, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the
-6-
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 (i) endorsements for collection or deposit in the ordinary
course of business, or (ii) obligations to make servicing advances for
delinquent taxes and insurance or other obligations in respect of a Mortgaged
Property, to the extent required by Buyer. 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.
"High Cost Mortgage Loans" means any Mortgage Loans classified as (a)
"high cost" loans under the Home Ownership and Equity Protection Act of 1994, as
amended or (b) "high cost," "threshold," or "predatory" loans under any other
applicable state, federal or local law.
"Income" means with respect to any Purchased Mortgage Loan at any time
until repurchased by a Seller, any principal received thereon or in respect
thereof and all interest, dividends or other distributions thereon.
"Indebtedness" means, for 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.
"Index" means, with respect to any adjustable rate Mortgage Loan, the
index identified on the Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the applicable Mortgage Interest
Rate.
"Interest Rate Adjustment Date" means the date on which an adjustment
to the Mortgage Interest Rate with respect to each Mortgage Loan becomes
effective.
-7-
"Interest Rate Protection Agreement" means, with respect to any or all
of the 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
Take-out 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
an Affiliate of Buyer or such other party acceptable to Buyer in its sole
discretion, which agreement is acceptable to Buyer in its sole discretion.
"Jumbo Mortgage Loan" means an A quality Mortgage Loan which is not
eligible for sale to an Agency.
"LIBOR" means for each day, the rate of interest (calculated on a per
annum basis) equal to the overnight 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 XX0 0x" on Bloomberg) on such date of
determination, and if such rate shall not be so quoted, the rate per annum at
which Buyer is offered Dollar deposits at or about 11:00 a.m., (New York City
time), on such day, by prime banks in the interbank eurodollar market where the
eurodollar and foreign currency exchange operations in respect of its loans are
then being conducted for delivery on such day for an overnight period, and in an
amount comparable to the amount of the Purchase Price of Transactions to be
outstanding on such day.
"Lien" means any mortgage, lien, pledge, charge, security interest or
similar encumbrance.
"Margin Call" has the meaning specified in Section 6(a) hereof.
"Margin Deadline" has the meaning specified in Section 6(b) hereof.
"Margin Deficit" has the meaning specified in Section 6(a) hereof.
"Market Value" means, with respect to any Purchased Mortgage Loan as
of any date of determination, the whole-loan servicing released fair market
value of such Purchased Mortgage Loan on such date as determined by Buyer (or an
Affiliate thereof) in its sole discretion. Without limiting the generality of
the foregoing, each Seller acknowledges that (a) in the event that a Purchased
Mortgage Loan is not subject to a Take-out Commitment, Buyer may deem the Market
Value for such Mortgage Loan to be no greater than par and (b) the Market Value
of a Purchased Mortgage Loan may be reduced to zero by Buyer if:
(i) a breach of a representation, warranty or covenant made by
either Seller in this Agreement with respect to such Purchased
Mortgage Loan has occurred and is continuing;
(ii) such Purchased Mortgage Loan is a Non-Performing Mortgage
Loan;
(iii) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement (other than
to a Take-
-8-
out Investor pursuant to a Bailee Letter) for a period in excess of
ten (10) calendar days;
(iv) such Purchased Mortgage Loan has been released from the
possession of the Custodian under the Custodial Agreement to a
Take-out Investor pursuant to a Bailee Letter for a period in excess
of 45 calendar days;
(v) such Purchased Mortgage Loan has been held by the Custodian
for the benefit of Buyer (in its capacity as Buyer hereunder or as a
secured lender) for a period of greater than (a) 90 days for all
Mortgage Loans other than Aged Loans or (b) 150 days with respect to
each Aged Loan;
(vi) such Purchased Mortgage Loan is a Wet-Ink Mortgage Loan for
which the Mortgage File has not been delivered to the Custodian on or
prior to the seventh Business Day after the related Purchase Date;
(vii) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Wet-Ink Mortgage Loans that are Purchased Mortgage Loans
exceeds $7 million;
(viii) when the Purchase Price for such Purchased Mortgage Loan
is added to other Purchased Mortgage Loans, the aggregate Purchase
Price of all One Hundred and Twenty Day Aged Mortgage Loans exceeds $2
million;
(ix) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all One Hundred and Fifty Day Aged Mortgage Loans exceeds $750,000;
(x) when the Purchase Price for such Purchased Mortgage Loan is
added to other Purchased Mortgage Loans, the aggregate Purchase Price
of all Second Lien Mortgage Loans that are Purchased Mortgage Loans
exceeds $2 million.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of any Seller, any Affiliate that is a
party to any Program Agreement taken as a whole; (b) a material impairment of
the ability of any Seller, or any Affiliate that is a party to any Program
Agreement to perform under any Program Agreement and to avoid any Event of
Default; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability of any Program Agreement against any Seller, or any
Affiliate that is a party to any Program Agreement.
"Maximum Aggregate Purchase Price" means TWENTY MILLION DOLLARS
($20,000,000).
"MERS" means Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
-9-
"MERS System" means the system of recording transfers of mortgages
electronically maintained by MERS.
"Monthly Payment" means the scheduled monthly payment of principal and
interest on a Mortgage Loan.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successors
thereto.
"Mortgage" means 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
lien on real property and other property and rights incidental thereto.
"Mortgage File" means, with respect to a Mortgage Loan, the documents
and instruments relating to such Mortgage Loan and set forth in Exhibit F to the
Custodial Agreement.
"Mortgage Interest Rate" means the rate of interest borne on a
Mortgage Loan from time to time in accordance with the terms of the related
Mortgage Note.
"Mortgage Interest Rate Cap" means, with respect to an adjustable rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
"Mortgage Loan" means any Sub-Prime Mortgage Loan, Exception Mortgage
Loan, Jumbo Mortgage Loan, Alt A Mortgage Loan, Second Lien Mortgage Loan or
Conforming Mortgage Loan which is a closed-end, fixed or floating-rate, first or
second lien, one-to-four-family residential mortgage or home equity loan
evidenced by a promissory note and secured by a mortgage, which satisfies the
requirements set forth in the Underwriting Guidelines and Section 13(b) hereof;
provided, however, that, except as expressly approved in writing by Buyer,
Mortgage Loans shall not include any "high-LTV" loans (ie., a mortgage loan
having a loan-to-value ratio in excess of 100% or in excess of such lower
percentage set forth in the Underwriting Guidelines or with respect to Second
Lien Mortgage Loans, a combined loan-to value ratio, in excess of the lower of
(i) the percentage specified in the Underwriting Guidelines or (ii) 100%) or any
High Cost Mortgage Loans and; provided, further, that the origination date with
respect to such Mortgage Loan is no earlier than thirty (30) days prior to the
related Purchase Date.
"Mortgage Loan Schedule" means with respect to any Transaction as of
any date, a mortgage loan schedule in the form of either (a) Exhibit C attached
hereto or (b) a computer tape or other electronic medium generated by either
Seller, and delivered to Buyer and Custodian, which provides information
(including, without limitation, the information set forth on Exhibit C attached
hereto) relating to the Purchased Mortgage Loans in a format acceptable to
Buyer.
"Mortgage Loan Schedule and Exception Report" has the meaning assigned
to such term in the Custodial Agreement.
-10-
"Mortgage Note" means the promissory note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
"Mortgaged Property" means the real property securing repayment of the
debt evidenced by a Mortgage Note.
"Mortgagor" means the obligor or obligors on a Mortgage Note,
including any person who has assumed or guaranteed the obligations of the
obligor thereunder.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to be
made by a Seller or any ERISA Affiliate and that is covered by Title IV of
ERISA.
"Net Income" means, for any period and any Person, the net income of
such Person for such period as determined in accordance with GAAP.
"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).
"1934 Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Non-Performing Mortgage Loan" means (i) any Mortgage Loan for which
any payment of principal or interest is more than twenty-nine (29) days past
due, (ii) any Mortgage Loan with respect to which the related mortgagor is in
bankruptcy or (iii) any Mortgage Loan with respect to which the related
mortgaged property is in foreclosure.
"Notice Date" has the meaning given to it in Section 3(b) hereof.
"Obligations" means (a) all of Sellers' indebtedness, obligations to
pay the Repurchase Price on the Repurchase Date, the Price Differential on each
Price Differential Payment Date, and other obligations and liabilities, to
Buyer, its Affiliates or Custodian arising under, or in connection with, the
Program Agreements, whether now existing or hereafter arising; (b) any and all
sums paid by Buyer or on behalf of Buyer in order to preserve any Purchased
Mortgage Loan or its interest therein; (c) in the event of any proceeding for
the collection or enforcement of any of Sellers' indebtedness, obligations or
liabilities referred to in clause (a), the reasonable expenses of retaking,
holding, collecting, preparing for sale, selling or otherwise disposing of or
realizing on any Purchased Mortgage Loan, or of any exercise by Buyer of its
rights under the Program Agreements, including, without limitation, attorneys'
fees and disbursements and court costs; and (d) all of the Sellers' indemnity
obligations to Buyer or Custodian or both pursuant to the Program Agreements.
"One Hundred and Fifty Day Aged Mortgage Loan" means a Mortgage Loan
subject to a Transaction hereunder and for which the Purchase Date is greater
than 120 days, but no more that 150 days, prior to the date of determination.
-11-
"One Hundred and Twenty Day Aged Mortgage Loan" means a Mortgage Loan
subject to a Transaction hereunder and for which the Purchase Date is greater
than 90 days, but no more than 120 days, prior to the date of determination.
"PBCG" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, unlimited liability company, joint
stock company, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.
"Plan" means an employee benefit or other plan established or
maintained by any Seller or any ERISA Affiliate and covered by Title IV of
ERISA, other than a Multiemployer Plan.
"Post Default Rate" means an annual rate of interest equal to the
Pricing Rate plus 3%.
"Price Differential" means with respect to any Transaction as of any
date of determination, an amount equal to the product of (A) the Pricing Rate
for such Transaction and (B) the Purchase Price for such Transaction, calculated
daily on the basis of a 360-day year for the actual number of days during the
period commencing on (and including) the Purchase Date for such Transaction and
ending on (but excluding) the Repurchase Date.
"Price Differential Payment Date" means, with respect to a Purchased
Mortgage Loan, the 5th day of the month following the related Purchase Date and
each succeeding 5th day of the month thereafter; provided, that, with respect to
such Purchased Mortgage Loan, the final Price Differential Payment Date shall be
the related Repurchase Date; and provided, further, that if any such day is not
a Business Day, the Price Differential Payment Date shall be the next succeeding
Business Day.
"Pricing Rate" means LIBOR plus:
(a) [*]% with respect to Transactions the subject of which are
Conforming Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans and Wet-Ink Mortgage Loans);
(b) [*]% with respect to Transactions the subject of which are
Sub-Prime Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans and Wet-Ink Mortgage Loans);
(c) [*]% with respect to Transactions the subject of which are
Alt A Mortgage Loans (other than Aged Loans, Second Lien Mortgage
Loans and Wet-Ink Mortgage Loans);
(d) [*]% with respect to Transactions the subject of which are
Second Lien Mortgage Loans (other than Aged Loans and Wet-Ink Mortgage
Loans); and
-12-
(e) [*]% with respect to Transactions the subject of which are
Wet-Ink Mortgage Loans;
(f) [*]% with respect to Transactions the subject of which are
Aged Loans;
(g) the rate determined in the sole discretion of Buyer with
respect to Transactions the subject of which are Exception Mortgage
Loans.
The Pricing Rate shall change in accordance with LIBOR, as provided in
Section 5(a).
"Program Agreements" means, collectively, the Servicing Agreement, the
Servicer Notice, the Custodial Agreement, this Agreement, the Electronic
Tracking Agreement, if entered into, and with respect to each Exception Mortgage
Loan, a Purchase Confirmation.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Purchase Confirmation" means a confirmation of a Transaction, in the
form attached as Exhibit B hereto.
"Purchase Date" means the date on which Purchased Mortgage Loans are
to be transferred by a Seller to Buyer.
"Purchase Price" means the price at which each Mortgage Loan is
transferred by a Seller to Buyer, which shall equal:
(a) on the Purchase Date, in the case of Purchased Mortgage Loans
other than One Hundred and Twenty Day Aged Mortgage Loans or One Hundred
and Fifty Day Aged Mortgage Loans, the lesser of either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, the product of (1) the outstanding principal
amount thereof as set forth in the Mortgage Loan Schedule and
Exception Report multiplied by (2) the applicable Purchase Price
Percentage for such Mortgage Loan or (y) in the case of CSFBMC
Mortgage Loans, the [*] as set forth in the Mortgage Loan Schedule and
Exception Report, and
(B) the product of (1) the Market Value of such Purchased
Mortgage Loan multiplied by (2) the applicable Purchase Price
Percentage for such Mortgage Loan; or
(b) on the Purchase Date, in the case of Purchased Mortgage Loans
which are One Hundred and Twenty Day Aged Mortgage Loans, the lesser of
either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, [*]% of the outstanding principal amount
thereof as set forth in
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the Mortgage Loan Schedule and Exception Report or (y) in the case of
CSFBMC Mortgage Loans, [*] as set forth in the Mortgage Loan Schedule
and Exception Report, and
(B) the product of (1) the Market Value of such Purchase Mortgage
Loan multiplied by (2) the applicable Purchase Price Percentage for
such Mortgage Loan; or
(c) on the Purchase Date, in the case of Purchased Mortgage Loans
which are One Hundred and Fifty Day Aged Mortgage Loans, the lesser of
either:
(A) (x) with respect to Purchased Mortgage Loans other than
CSFBMC Mortgage Loans, [*]% of the outstanding principal amount
thereof as set forth in the Mortgage Loan Schedule and Exception
Report or (y) in the case of CSFBMC Mortgage Loans, [*] as set forth
in the Mortgage Loan Schedule and Exception Report, and
(B) the product of (1) the Market Value of such Purchase Mortgage
Loan multiplied by (2) the applicable Purchase Price Percentage for
such Mortgage Loan; and
(d) after the Purchase Date, except where Buyer and a Seller agree
otherwise, the amount determined under the preceding clauses (a), (b) or
(c) decreased by the amount of any cash transferred by a Seller to Buyer
pursuant to Section 4(c) hereof or applied to reduce the Sellers'
obligations under clause (ii) of Section 4(b) hereof.
"Purchase Price Percentage" means, with respect to each Mortgage Loan,
the following percentage, as applicable:
(a) [*]% with respect to Purchased Mortgage Loans that are One Hundred
and Fifty Day Aged Mortgage Loans;
(b) [*]% with respect to Purchased Mortgage Loans that are One Hundred
and Twenty Day Aged Mortgage Loans;
(c) [*]% with respect to Purchased Mortgage Loans that are Second Lien
Mortgage Loans (other than Aged Loans);
(d) [*]% with respect to Purchased Mortgage Loans that are Sub-Prime
Mortgage Loans (other than Aged Loans and Second Lien Mortgage Loans);
(e) [*]% with respect to Purchased Mortgage Loans that are Alt A
Mortgage Loans (other than Aged Loans and Second Lien Mortgage Loans);
(f) [*]% with respect to Purchased Mortgage Loans that are Conforming
Mortgage Loans (other than Aged Loans and Second Lien Mortgage Loans);
-14-
(g) with respect to Purchased Mortgage Loans that are Exception
Mortgage Loans, a percentage to be determined by Buyer in its sole
discretion;
"Purchased Mortgage Loans" means the collective reference to Mortgage
Loans together with the Repurchase Assets related to such Mortgage Loans
transferred by a Seller to Buyer in a Transaction hereunder, listed on the
related Mortgage Loan Schedule attached to the related Transaction Request,
which such Mortgage Loans the Custodian has been instructed to hold pursuant to
the Custodial Agreement.
"Qualified Insurer" means 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.
"Qualified Originator" means an originator of Mortgage Loans which is
acceptable under the Underwriting Guidelines.
"Records" means all instruments, agreements and other books, records,
and reports and data generated by other media for the storage of information
maintained by a 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.
"REO Property" means real property acquired by a Seller, including a
Mortgaged Property acquired through foreclosure of a Mortgage Loan or by deed in
lieu of such foreclosure.
"Reporting Date" means the 5th day of each month or, if such day is
not a Business Day, the next succeeding Business Day.
"Repurchase Assets" has the meaning assigned thereto in Section 8
hereof.
"Repurchase Date" means the earlier of (i) the Termination Date, (ii)
the date set forth in the applicable Purchase Confirmation, (iii) the date
determined by application of Section 16 hereof or (iv) the date the related
Mortgage Loan is sold pursuant to a Take-out Commitment.
"Repurchase Price" means the price at which Purchased Mortgage Loans
are to be transferred from Buyer to a Seller upon termination of a Transaction,
which will be determined in each case (including Transactions terminable upon
demand) as the sum of the Purchase Price and the accrued but unpaid Price
Differential as of the date of such determination.
"Request for Certification" means a notice sent to the Custodian
reflecting the sale of one or more Purchased Mortgage Loans to Buyer hereunder.
"Requirement of Law" means, with respect to any Person, any law,
treaty, rule or regulation or determination of an arbitrator, a court or other
governmental authority, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
-15-
"Responsible Officer" means shall mean, as to any Person, the chief
executive officer or, with respect to financial matters, the chief financial
officer of such Person.
"S&P" means Standard & Poor's Ratings Services, or any successor
thereto.
"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Second Lien Mortgage Loan" means a second lien Mortgage Loan which
meets the Underwriting Guidelines and is eligible for sale to Buyer.
"Sellers" means each of First NLC and NLC, Inc. and their successors
and permitted assigns.
"Servicer" means either Calmco or First NLC, or any other servicer
approved by Buyer in its sole discretion.
"Servicer Notice" means any notice acknowledged by the Servicer
substantially in the form of Exhibit N hereto.
"Servicing Agreement" means any servicing agreement entered into among
the Sellers, Buyer and a Servicer as the same may be amended from time to time.
"Settlement Agent" means, with respect to any Transaction the subject
of which is a Wet-Ink Mortgage Loan, the entity approved by Buyer, in its sole
good-faith discretion, which may be a title company, escrow company or attorney
in accordance with local law and practice in the jurisdiction where the related
Wet-Ink Mortgage Loan is being originated. A Settlement Agent is deemed approved
unless Buyer notifies Sellers otherwise at any time electronically or in
writing.
"SIPA" means the Securities Investor Protection Act of 1970, as
amended from time to time.
"Subordinated Debt" means, for any Person, Indebtedness of such Person
which is (i) unsecured, (ii) no part of the principal of such Indebtedness is
required to be paid (whether by way of mandatory sinking fund, mandatory
redemption, mandatory prepayment or otherwise) prior to the date which is one
year following the Termination Date and (iii) the payment of the principal of
and interest on such Indebtedness and other obligations of such Person in
respect of such Indebtedness are subordinated to the prior payment in full of
the principal of and interest (including post-petition obligations) on the
Transactions and all other obligations and liabilities of each Seller to Buyer
hereunder on terms and conditions approved in writing by Buyer and all other
terms and conditions of which are satisfactory in form and substance to Buyer.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason
-16-
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.
"Sub-Prime Mortgage Loan" means a Mortgage Loan which originated in
accordance with the criteria established by Buyer for sub-prime mortgage loans,
as determined by Buyer in its sole discretion.
"Take-out Commitment" means a commitment of a Seller to either (a)
sell one or more Mortgage Loans to a Take-out Investor or (b) (i) swap one or
more Mortgage Loans with a Take-out Investor that is an Agency for an Agency
Security, and (ii) sell the related Agency Security to a Take-out Investor, and
in each case, the corresponding Take-out Investor's commitment back to such
Seller to effectuate any of the foregoing, as applicable. With respect to any
Take-out Commitment with an Agency, the applicable agency documents list Buyer
as sole subscriber.
"Take-out Investor" means (i) an Agency or (ii) other institution
which has made a Take-out Commitment and has been approved by Buyer.
"Termination Date" means the earlier of (a) December 19, 2002, and (b)
the date of the occurrence and continuance of an Event of Default.
"Test Period" means any period of three (3) consecutive calendar
months.
"Transaction" has the meaning set forth in Section 1 hereof.
"Transaction Request" means a request from a Seller to Buyer, in the
form attached as Exhibit A hereto, to enter into a Transaction.
"Trust Receipt and Certification" means, with respect to any
Transaction as of any date, a receipt and certification in the form attached as
an exhibit to the Custodial Agreement.
"Underwriting Guidelines" means the standards, procedures and
guidelines of Sellers for underwriting and acquiring Mortgage Loans, which are
set forth in the written policies and procedures of Sellers, copies of which are
attached hereto as Exhibit F and such other guidelines as are identified and
approved in writing by Buyer.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York or the Uniform Commercial
Code as in effect in the applicable jurisdiction.
"VA" means 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" means a lender which is approved by the VA to act
as a lender in connection with the origination of VA Loans.
-17-
"VA Loan" means 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" means 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.
"Violation Deadline" has the meaning assigned thereto in Section 4(c)
hereof.
"Wet-Ink Documents" means, with respect to any Wet-Ink Mortgage Loan,
the documents set forth in Exhibit K hereto.
"Wet-Ink Mortgage Loan" means a Mortgage Loan which Sellers are
selling to Buyer simultaneously with the origination thereof.
3. Program; Initiation of Transactions
a. From time to time, in the sole discretion of Buyer, Buyer will
purchase from the Sellers certain Mortgage Loans that have been either
originated by either Seller or purchased by either Seller from other
originators. This Agreement is not a commitment by Buyer to enter into
Transactions with the Sellers but rather sets forth the procedures to be used in
connection with periodic requests for Buyer to enter into Transactions with the
Sellers. Each Seller hereby acknowledges that Buyer is under no obligation to
agree to enter into, or to enter into, any Transaction pursuant to this
Agreement. All Purchased Mortgage Loans shall exceed or meet the Underwriting
Guidelines, and shall be serviced by Servicer. The aggregate Purchase Price of
Purchased Mortgage Loans subject to outstanding Transactions shall not exceed
the Maximum Aggregate Purchase Price.
b. With respect to each Transaction involving Mortgage Loans which are
not Wet-Ink Mortgage Loans, Sellers shall give Buyer and Custodian at least 1
Business Day's prior notice of any proposed Purchase Date (the date on which
such notice is given, the "Notice Date"); provided, that if a Seller is
delivering 25 or fewer Mortgage Loans, which are not Wet-Ink Mortgage Loans, on
a Purchase Date, the notice shall be delivered on or before 10:30 a.m. (New York
City time) on the Purchase Date. With respect to Wet-Ink Mortgage Loans, such
Seller shall deliver notice of any proposed purchase on or before 3:30 p.m. (New
York City time) on the Purchase Date. On the Notice Date, such Seller shall (i)
request that Buyer enter into a Transaction by furnishing to Buyer a Transaction
Request, (ii) deliver to Buyer and Custodian a Mortgage Loan Schedule and (iii)
deliver to Custodian a Request for Certification and each Mortgage File or
Wet-Ink Documents for each Wet-Ink Mortgage Loan in accordance with Section
10(b)(3) and otherwise comply with the procedures set forth in Exhibit K hereto.
Following receipt of such request, Buyer may enter into such requested
Transaction or may notify such Seller of its intention not to enter into such
Transaction.
c. With respect to each Exception Mortgage Loan, upon receipt of the
Transaction Request, Buyer shall, consistent with this Agreement, specify the
terms for such proposed Transaction, including the Purchase Price, the Pricing
Rate, the Market Value and the
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Repurchase Date in respect of such Transaction. The terms thereof shall be set
forth in the Purchase Confirmation to be delivered to the Sellers on or prior to
the Purchase Date.
d. With respect to each Exception Mortgage Loan, the Purchase
Confirmation, together with this Agreement, shall constitute conclusive evidence
of the terms agreed between Buyer and the Sellers with respect to the
Transaction to which the Purchase Confirmation relates, and the Sellers'
acceptance of the related proceeds shall constitute the Sellers' agreement to
the terms of such Purchase Confirmation. It is the intention of the parties
that, with respect to each Exception Mortgage Loan, each Purchase Confirmation
shall not be separate from this Agreement but shall be made a part of this
Agreement. In the event of any conflict between this Agreement and, with respect
to each Exception Mortgage Loan, a Purchase Confirmation, the terms of the
Purchase Confirmation shall control with respect to the related Transaction.
e. Upon the satisfaction of the applicable conditions precedent set
forth in Section 10 hereof, all of the Sellers' interest in the Repurchase
Assets shall pass to Buyer on the Purchase Date, against the transfer of the
Purchase Price to the Sellers. Upon transfer of the Mortgage Loans to Buyer as
set forth in this Section and until termination of any related Transactions as
set forth in Sections 4 or 16 of this Agreement, ownership of each Mortgage
Loan, including each document in the related Mortgage File and Records, is
vested in Buyer; provided that, prior to the recordation by the Custodian as
provided for in the Custodial Agreement record title in the name of the related
Seller to each Mortgage shall be retained by the related Seller in trust, for
the benefit of Buyer, for the sole purpose of facilitating the servicing and the
supervision of the servicing of the Mortgage Loans.
f. With respect to each Wet-Ink Mortgage Loan, by no later than 12:00
noon, (New York City time) on the seventh Business Day following the applicable
Purchase Date, the related Seller shall cause the related Settlement Agent to
deliver to the Custodian the remaining documents in the Mortgage File.
4. Repurchase
a. The Sellers shall repurchase the related Purchased Mortgage Loans
from Buyer on each related Repurchase Date. Such obligation to repurchase exists
without regard to any prior or intervening liquidation or foreclosure with
respect to any Purchased Mortgage Loan (but liquidation or foreclosure proceeds
received by Buyer shall be applied to reduce the Repurchase Price for such
Purchased Mortgage Loan on each Price Differential Payment Date except as
otherwise provided herein). The Sellers are obligated to repurchase and take
physical possession of the Purchased Mortgage Loans from Buyer or its designee
(including the Custodian) at the Sellers' expense on the related Repurchase
Date.
b. Provided that no Default shall have occurred and is continuing, and
Buyer has received the related Repurchase Price upon repurchase of the Purchased
Mortgage Loans, Buyer agrees to release its ownership interest hereunder in the
Purchased Mortgage Loans (including, the Repurchase Assets related thereto) at
the request of the Sellers. With respect to payments in full by the related
Mortgagor of a Purchased Mortgage Loan, the Sellers agree to (i) provide Buyer
with a copy of a report from the related Servicer indicating that such Purchased
Mortgage Loan has been paid in full, (ii) remit to Buyer, within two Business
Days, the Repurchase Price
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with respect to such Purchased Mortgage Loans and (iii) provide Buyer a notice
specifying each Purchased Mortgage Loan that has been prepaid in full. Buyer
agrees to release its ownership interest in Purchased Mortgage Loans which have
been prepaid in full after receipt of evidence of compliance with clauses (i)
through (iii) of the immediately preceding sentence.
c. In the event that at any time any Purchased Mortgage Loan violates
the applicable sublimit set forth in the definition of Market Value, Buyer may,
in its sole discretion, redesignate such Mortgage Loan as an Exception Mortgage
Loan. If Buyer does not redesignate such Mortgage Loan as an Exception Mortgage
Loan, and if neither Seller notifies Buyer within five (5) Business Days
following notice or knowledge of such violation that either Seller does not want
to receive a bid for such Mortgage Loan as described below, Buyer or an
Affiliate of Buyer may offer to terminate the applicable Seller's right and
obligation to repurchase such Mortgage Loan by paying the related Seller a price
to be set by Buyer in its sole discretion (a "Bid"). Such Seller, within five
(5) Business Days of receipt of Buyer's bid (the "Violation Deadline") may, in
its sole discretion, either (i) accept Buyer's bid, terminating Sellers' right
to repurchase such Mortgage Loan under this Agreement or (ii) immediately
repurchase the Mortgage Loan at the Repurchase Price in accordance with this
Section 4. The Sellers shall pay Buyer a bid fee equal to $250 (the "Bid Fee")
with respect to each Mortgage Loan on which Buyer or its Affiliate makes a Bid,
regardless of whether the Bid is accepted and such Bid Fee shall be due and
payable to Buyer on or before the Violation Deadline. Any amount paid by Buyer
or its Affiliate to terminate the Sellers' right to repurchase a Purchased
Mortgage Loan if a Bid is accepted pursuant to this Section shall be applied by
Buyer toward the outstanding Repurchase Price for the applicable Transaction.
5. Price Differential.
a. On each Business Day that a Transaction is outstanding, the Pricing
Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price
Differential shall be settled in cash on each related Price Differential Payment
Date. Two Business Days prior to the Price Differential Payment Date, Buyer
shall give the Sellers written or electronic notice of the amount of the Price
Differential due on such Price Differential Payment Date. On the Price
Differential Payment Date, the Sellers shall pay to Buyer the Price Differential
for such Price Differential Payment Date (along with any other amounts to be
paid pursuant to Sections 7, 33 and 34 hereof), by wire transfer in immediately
available funds.
b. If Sellers fail to pay all or part of the Price Differential by
3:00 p.m. (New York City time) on the related Price Differential Payment Date,
with respect to any Purchased Mortgage Loan, the Sellers shall be obligated to
pay to Buyer (in addition to, and together with, the amount of such Price
Differential) interest on the unpaid Repurchase Price at a rate per annum equal
to the Post Default Rate until the Price Differential is received in full by
Buyer.
6. Margin Maintenance
a. If at any time the Market Value of any Purchased Mortgage Loan
subject to a Transaction is less than Buyer's Margin Amount for such Transaction
(a "Margin Deficit"), then Buyer may by notice to any Seller require the Sellers
to transfer to Buyer cash in an amount at least equal to the Margin Deficit
(such requirement, a "Margin Call").
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b. Notice delivered pursuant to Section 6(a) may be given by any
written means. Any notice given before 10:00 a.m. (New York City time) on a
Business Day shall be met, and the related Margin Call satisfied, no later than
5:00 p.m. (New York City time) on such Business Day; notice given after 10:00
a.m. (New York City time) on a Business Day shall be met, and the related Margin
Call satisfied, no later than 5:00 p.m. (New York City time) on the following
Business Day; provided, however, that in the event that the aggregate Purchase
Price of Transactions outstanding on the date a Margin Call is made equals no
more than 50% of the Maximum Aggregate Purchase Price, the Sellers shall have
three (3) Business Days to satisfy the related Margin Call (the foregoing time
requirements for satisfaction of a Margin Call are referred to as the "Margin
Deadlines"). The failure of Buyer, on any one or more occasions, to exercise its
rights hereunder, shall not change or alter the terms and conditions to which
this Agreement is subject or limit the right of Buyer to do so at a later date.
The Sellers and Buyer each agree that a failure or delay by Buyer to exercise
its rights hereunder shall not limit or waive Buyer's rights under this
Agreement or otherwise existing by law or in any way create additional rights
for the Sellers.
7. Income Payments
a. If Income is paid in respect of any Purchased Mortgage Loan during
the term of a Transaction, such Income shall be the property of Buyer.
Notwithstanding the foregoing, and provided no Event of Default has occurred and
is continuing, Buyer agrees that if a third-party Servicer is in place for any
Purchased Mortgage Loans, such Servicer shall deposit such Income to the
Collection Account. First NLC shall deposit all Income received in its capacity
as Servicer of any Purchased Mortgage Loans to the Collection Account in
accordance with Section 12(c) hereof.
b. Provided no Event of Default has occurred and is continuing, on
each Price Differential Payment Date, Sellers shall remit to Buyer an amount
equal to the Price Differential out of the interest portion of the Income paid
in respect to the Purchased Mortgage Loans for the preceding month in accordance
with Section 5 of this Agreement. Upon termination of any Transaction, to the
extent that there is any excess Income after repayment of all amounts to be
transferred to Buyer by Sellers, Buyer, in its sole option, may apply the excess
income to reduce the Repurchase Price due upon termination of any other
outstanding Transactions.
c. In the event that an Event of Default has occurred and is
continuing, notwithstanding any provision set forth herein, Sellers shall remit
to Buyer all Income received with respect to each Purchased Mortgage Loan on the
related Price Differential Payment Date or on such other date or dates as Buyer
notifies Sellers in writing.
d. Notwithstanding any provision to the contrary in this Section 7,
within two (2) Business Days of receipt by any Seller of any prepayment of
principal in full, with respect to a Purchased Mortgage Loan, the Sellers shall
remit such amount to Buyer and Buyer shall immediately apply any such amount
received by Buyer to reduce the amount of the Repurchase Price due upon
termination of the related Transaction.
e. Notwithstanding anything to the contrary set forth herein, upon
notice by Buyer to either Seller, the Sellers shall remit to Buyer all
collections received by Servicer of the
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Sellers on the Purchased Mortgage Loans in accordance with Buyer's directions no
later than the day on which aggregate collections of principal and interest
(excluding principal prepayments) on the Purchased Mortgaged Loans reaches an
amount to be indicated by Buyer in its sole discretion. Any amounts so remitted
shall be applied to reduce the Repurchase Price.
8. Security Interest
Although the parties intend that all Transactions hereunder be sales
and purchases and not loans, in the event any such Transactions are deemed to be
loans, 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 related servicing rights, the Program Agreements (to
the extent such Program Agreements and such Seller's right thereunder relate to
the Purchased Mortgage Loans), any related Take-out Commitments, Property, all
insurance policies and insurance proceeds relating to any Mortgage Loan or the
related Mortgaged Property, including, but not limited to, any payments or
proceeds under any related primary insurance, hazard insurance and FHA Mortgage
Insurance Contracts and VA Loan Guarantee Agreements (if any), Income, the
Collection Account, Interest Rate Protection Agreements, accounts (including any
interest of such Seller in escrow accounts) and any other contract rights,
accounts, payments, rights to payment (including payments of interest or finance
charges) general intangibles and other assets relating to the Purchased Mortgage
Loans (including, without limitation, any other accounts) or any interest in the
Purchased Mortgage Loans, the servicing of the Purchased Mortgage Loans, and any
proceeds (including the related securitization proceeds) and distributions with
respect to any of the foregoing and any other property, rights, title or
interests as are specified on a Transaction Request and/or Trust Receipt and
Certification, in all instances, whether now owned or hereafter acquired, now
existing or hereafter created (collectively, the "Repurchase Assets"). Sellers
agree to execute, deliver and/or file such documents and perform such acts as
may be reasonably necessary to fully perfect Buyer's security interest created
hereby. Furthermore, the Sellers hereby authorize the Buyer to file financing
statements relating to the Repurchase Assets without the signature of the
Sellers, 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.
9. Payment and Transfer
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 Buyer at the
following account maintained by Buyer: Account No. 3048-8879, for the account of
CSFB BUYER/FIRST NLC SELLER- Inbound Account, Citibank, ABA No. or such
------
other account as Buyer shall specify to Sellers in writing. Sellers acknowledge
that they have no rights of withdrawal from the foregoing account. All Purchased
Mortgage Loans transferred by one party hereto to the other party shall be in
the case of a purchase by Buyer in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment in blank and
such other documentation as Buyer may reasonably request. All Purchased Mortgage
Loans shall be evidenced by a Trust Receipt and Certification.
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10. Conditions Precedent
a. Initial Transaction. As conditions precedent to the initial
Transaction, Buyer shall have received on or before the day of such initial
Transaction the following, in form and substance satisfactory to Buyer and duly
executed as applicable, by the Sellers and each other party thereto:
(1) Program Agreements. The Program Agreements (including a Custodial
Agreement in a form acceptable to Buyer) duly executed and delivered by the
parties thereto and being in full force and effect, free of any
modification, breach or waiver.
(2) 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 limitation, duly executed and filed Uniform
Commercial Code financing statements on Form UCC-1.
(3) Organizational Documents. A certified copy of each Seller's
organizational documents, charter, bylaws and authorizing resolutions
approving the Program Agreements and transactions thereunder (either
specifically or by general resolution) and all documents evidencing other
necessary corporate action or governmental approvals as may be required in
connection with the Program Agreements.
(4) Good Standing Certificate. A certified copy of a good standing
certificate of each Seller, dated as of no earlier than the date 10
Business Days prior to the Purchase Date with respect to the initial
Transaction hereunder.
(5) Incumbency Certificate. An incumbency certificate of the secretary
of each Seller, certifying the names, true signatures and titles of the
representatives duly authorized to request transactions hereunder and to
execute the Program Agreements.
(6) Opinion of Counsel. An opinion of each Seller's counsel, in form
and substance substantially as set forth in Exhibit E attached hereto.
(7) Underwriting Guidelines. The true and correct copies of the
Underwriting Guidelines certified by an officer of each Seller.
(8) Fees. Payment of any fees due to Buyer hereunder.
b. All Transactions. The obligation of Buyer to enter into each
Transaction pursuant to this Agreement is subject to the following conditions
precedent:
(1) Due Diligence Review. Without limiting the generality of Section
36 hereof, Buyer shall have completed, to its satisfaction, its due
diligence review of the related Mortgage Loans and the Sellers.
(2) Required Documents.
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(a) With respect to each Purchased Mortgage Loan which is not a
Wet-Ink Mortgage Loan, the Mortgage File has been delivered to the
Custodian (i) with respect to any purchase of 25 or fewer Mortgage
Loans on a single Purchase Date, on or prior to 3:30 p.m. (New York
City time) on the Purchase Date, and (ii) with respect to any purchase
of 26 or more Mortgage Loans on a single Purchase Date, at least 24
hours prior to the Purchase Date;
(b) With respect to each Wet-Ink Mortgage Loan, the Wet-Ink
Documents have been delivered to Buyer or Custodian, as the case may
be, by 3:30 p.m. (New York City time) on the Purchase Date.
(3) Transaction Documents. Buyer or its designee shall have received
on or before the day of such Transaction (unless otherwise specified in
this Agreement) the following, in form and substance satisfactory to Buyer
and (if applicable) duly executed:
(a) A Transaction Request delivered pursuant to Section 3(c)
hereof and a Purchase Confirmation.
(b) The Request for Certification and the related Mortgage Loan
Schedule and Exception Report, and the Trust Receipt.
(c) Such certificates, opinions of counsel or other documents as
Buyer may reasonably request.
(4) No Default. No Default or Event of Default shall have occurred and
be continuing;
(5) Requirements of Law. Buyer shall not have determined that the
introduction of or a change in any Requirement of Law or in the
interpretation or administration of any Requirement of Law applicable to
Buyer has made it unlawful, and no Governmental Authority shall have
asserted that it is unlawful, for Buyer to enter into Transactions with a
Pricing Rate based on LIBOR.
(6) Representations and Warranties. Both immediately prior to the
related Transaction and also after giving effect thereto and to the
intended use thereof, the representations and warranties made by the
Sellers in each Program Agreement 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).
(7) 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 and being in full force and effect, free of any
modification, breach or waiver.
(8) Material Adverse Change. None of the following shall have occurred
and/or be continuing:
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(a) Credit Suisse First Boston, New York Branch's corporate bond
rating as calculated by S&P or Xxxxx'x has been lowered or downgraded
to a rating below investment grade by S&P or Xxxxx'x;
(b) an event or events shall have occurred in the good faith
determination of Buyer resulting in the effective absence of a "repo
market" or comparable "lending market" for financing debt obligations
secured by mortgage loans or securities or an event or events shall
have occurred resulting in Buyer not being able to finance Purchased
Assets 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
(c) an event or events shall have occurred resulting in the
effective absence of a "securities market" for securities backed by
mortgage loans or an event or events shall have occurred resulting in
Buyer not being able to sell securities backed by mortgage loans at
prices which would have been reasonable prior to such event or events;
or
(d) there shall have occurred a material adverse change in the
financial condition of Buyer which affects (or can reasonably be
expected to affect) materially and adversely the ability of Buyer to
fund its obligations under this Agreement.
11. Program; Costs
a. The Sellers shall reimburse Buyer for any of Buyer's reasonable
out-of-pocket costs, including due diligence review costs and reasonable
attorney's fees, incurred by Buyer in determining the acceptability to Buyer of
any Mortgage Loans. The Sellers shall also pay, or reimburse Buyer if Buyer
shall pay, any termination fee, which may be due any servicer. The Sellers shall
pay the fees and expenses of Buyer's counsel in connection with the Program
Agreements. Legal fees for any subsequent amendments to this Agreement or
related documents shall be borne by the Sellers. The Sellers shall pay ongoing
custodial and bank fees and expenses as set forth on Exhibit M hereto, and any
other ongoing fees and expenses under any other Program Document.
b. If Buyer determines that, due to the introduction of, any change
in, or the compliance by Buyer with (i) any eurocurrency reserve requirement or
(ii) the interpretation of any law, regulation or any guideline or request from
any central bank or other Governmental Authority (whether or not having the
force of law), there shall be an increase in the cost to Buyer in engaging in
the present or any future Transactions, then the Sellers agree to pay to Buyer,
from time to time, upon demand by Buyer (with a copy to Custodian) the actual
cost of additional amounts as specified by Buyer to compensate Buyer for such
increased costs.
c. With respect to any Transaction, Buyer may conclusively rely upon,
and shall incur no liability to the Sellers in acting upon, any request or other
communication that Buyer reasonably believes to have been given or made by a
person authorized to enter into a Transaction on The Sellers' behalf, whether or
not such person is listed on the certificate
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delivered pursuant to Section 10(a)(5) hereof. In each such case, the Sellers
hereby waives the right to dispute Buyer's record of the terms of the Purchase
Confirmation, request or other communication.
d. Notwithstanding the assignment of the Program Agreements with
respect to each Purchased Mortgage Loan to Buyer, each Seller agrees and
covenants with Buyer to enforce diligently the Sellers' rights and remedies set
forth in the Program Agreements.
e. Any payments made by the Sellers to Buyer shall be free and clear
of, and without deduction or withholding for, any taxes; provided, however, that
if such payer shall be required by law to deduct or withhold any taxes from any
sums payable to Buyer, then such payer shall (A) make such deductions or
withholdings and pay such amounts to the relevant authority in accordance with
applicable law, (B) pay to Buyer the sum that would have been payable had such
deduction or withholding not been made, and (C) at the time Price Differential
is paid, pay to Buyer all additional amounts as specified by Buyer to preserve
the after-tax yield Buyer would have received if such tax had not been imposed.
12. Servicing
a. The Sellers, on Buyer's behalf, shall contract with Servicer to, or
if First NLC is the Servicer, First NLC shall, service the Mortgage Loans
consistent with the degree of skill and care that each 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
Mortgage Loans or any payment thereunder. Buyer may terminate the servicing of
any Mortgage Loan with the then-existing servicer in accordance with Section
12(e) hereof.
b. The Sellers shall cause the Servicer, or if First NLC is the
Servicer, shall cause First NLC to hold or cause to be held all escrow funds
collected by Servicer 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. The Sellers shall cause the Servicer to deposit all collections
received by Servicer on the Purchased Mortgage Loans in the Collection Account
no later than the 5th Business Day following receipt; provided, however, that
any amounts required to be remitted to Buyer shall be deposited in the
Collection Account on or prior to the day on which such remittance is to occur.
d. Upon Buyer's request, 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 the occurrence and continuance 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.
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e. Upon the occurrence and continuance of an 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 under the Servicing Agreement without payment of any penalty or
termination fee. The Sellers and the Servicer 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, the
Sellers or any entity responsible to the Sellers for managing or servicing any
such Purchased Mortgage Loan has failed to perform fully the Sellers'
obligations under the Program Agreements or any of the obligations of such
entities with respect to the Purchased Mortgage Loans, the Sellers shall
promptly notify Buyer.
13. Representations and Warranties
a. Each Seller represents and warrants to Buyer as of the date hereof
and as of each Purchase Date for any Transaction that:
(1) Sellers Existence. First NLC has been duly organized and is
validly existing as a limited liability company in good standing under the
laws of the State of Florida. NLC, Inc. has been duly organized and is
validly existing as a corporation in good standing under the laws of the
State of Tennessee.
(2) Licenses. Such Seller is duly licensed or is otherwise qualified
in each jurisdiction in which it transacts business for the business which
it conducts and is not in default of any applicable federal, state or local
laws, rules and regulations unless, in either instance, the failure to take
such action is not reasonably likely (either individually or in the
aggregate) to cause a Material Adverse Effect (hereinbefore defined) and is
not in default of such state's applicable laws, rules and regulations. Such
Seller has the requisite power and authority and legal right to originate
and purchase Mortgage Loans (as applicable) and to own, sell and xxxxx x
xxxx on all of its right, title and interest in and to the Mortgage Loans,
and to execute and deliver, engage in the transactions contemplated by, and
perform and observe the terms and conditions of, this Agreement, each
Program Agreement and any Transaction Request or, if applicable, Purchase
Confirmation. Such Seller is an FHA Approved Mortgagee and VA Approved
Lender.
(3) Power. Such Seller has all requisite corporate or other power, and
has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business 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.
(4) Due Authorization. Such Seller has all necessary corporate or
other power, authority and legal right to execute, deliver and perform its
obligations under each of the Program Agreements, as applicable. This
Agreement, such any Transaction Request, Purchase Confirmation and the
Program Agreements have been (or, in the case of Program Agreements and any
Transaction Request, Purchase Confirmation not yet
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executed, will be) duly authorized, executed and delivered by such Seller,
all requisite action having been taken, and each is valid, binding and
enforceable against such Seller in accordance with its terms except as such
enforcement may be affected by bankruptcy, by other insolvency laws, or by
general principles of equity.
(5) Financial Statements. The Sellers have heretofore furnished to
Buyer a copy of (a) their combined balance sheet and the balance sheets of
its consolidated Subsidiaries for the fiscal year of the Sellers ended
December 31, 2000 and the related consolidated statements of income and
retained earnings and of cash flows for the Sellers and their 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 Xxxxx Xxxxxxxx, LLP and (b) their combined balance sheets and
the balance sheets of their consolidated Subsidiaries for the quarterly
fiscal periods of the combined Sellers ended March 31, 2001, June 30, 2001
and September 30, 2001 and the related consolidated statements of income
and retained earnings and of cash flows for the Sellers and their
consolidated Subsidiaries for such quarterly fiscal periods, 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 combined financial condition of the Sellers and
their consolidated Subsidiaries taken as a whole and the 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, 2000 there has
been no material adverse change in the business, operations or financial
condition of the Sellers from that set forth in said financial statements
nor is either Seller aware of any state of facts which (without notice or
the lapse of time) would or could result in any such material adverse
change. Each Seller has, on the date of the statements delivered pursuant
to this Section (the "Statement Date") no 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 either
Seller except as heretofore disclosed to Buyer in writing.
(6) Event of Default. There exists no Event of Default under Section
15(b) hereof, which default gives rise to a right to accelerate
indebtedness as referenced in Section 15(b) hereof, under any mortgage,
borrowing agreement or other instrument or agreement pertaining to
indebtedness for borrowed money or to the repurchase of mortgage loans or
securities.
(7) Solvency. Each Seller is solvent and will not be rendered
insolvent by any Transaction and, after giving effect to such Transaction,
will not be left with an unreasonably small amount of capital with which to
engage in its business. Neither Seller intends to incur, nor believes that
it has incurred, debts beyond its ability to pay such debts as they mature
and is not contemplating the commencement of insolvency, bankruptcy,
liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of such
entity or any of its assets. The amount of consideration being received by
the Sellers upon the sale of the Purchased Mortgage Loans to Buyer
constitutes reasonably equivalent value and fair
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consideration for such Purchased Mortgage Loans. The Sellers are not
transferring any Purchased Mortgage Loans with any intent to hinder, delay
or defraud any of its creditors.
(8) No Conflicts. The execution, delivery and performance by each
Seller of this Agreement, any Transaction Request or Purchase Confirmation
hereunder and the Program Agreements do not conflict with any term or
provision of the certificate of incorporation or by-laws of such Seller or
any law, rule, regulation, order, judgment, writ, injunction or decree
applicable to such Seller of any court, regulatory body, administrative
agency or governmental body having jurisdiction over such Seller, which
conflict would have a Material Adverse Effect and will not result in any
violation of any such mortgage, instrument, agreement or repurchase
agreement.
(9) True and Complete Disclosure. All information, reports, exhibits,
schedules, financial statements or certificates of the Sellers, any
Affiliate thereof or any of their officers furnished or to be furnished to
Buyer in connection with the initial or any ongoing due diligence of the
Sellers or any Affiliate or officer thereof, negotiation, preparation, or
delivery of the Program Agreements are true and complete and do not omit to
disclose any material facts necessary to make the statements herein or
therein, in light of the circumstances in which they are made, not
misleading. All financial statements have been prepared in accordance with
GAAP.
(10) Approvals. No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or
court is required under applicable law in connection with the execution,
delivery and performance by the Sellers of this Agreement, any Transaction
Request, Purchase Confirmation and the Program Agreements.
(11) Litigation. There is no action, proceeding or investigation
pending with respect to which either Seller has received service of process
or, to the best of the Sellers' knowledge threatened against it before any
court, administrative agency or other tribunal (A) asserting the invalidity
of this Agreement, any Transaction, Transaction Request, Purchase
Confirmation or any Program Agreement, (B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement, any
Transaction Request, Purchase Confirmation or any Program Agreement, (C)
makes a claim individually in an amount greater than $1 million or in an
aggregate amount greater than $3 million, (D) which requires filing with
the Securities and Exchange Commission in accordance with the 1934 Act or
any rules thereunder or (E) which might materially and adversely affect the
validity of the Mortgage Loans or the performance by it of its obligations
under, or the validity or enforceability of, this Agreement, any
Transaction Request, Purchase Confirmation or any Program Agreement.
(12) Material Adverse Change. There has been no material adverse
change in the business, operations, financial conditions, properties or
prospects of either Seller or their respective Affiliates since the date
set forth in the most recent financial statements supplied to Buyer.
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(13) Ownership. Upon payment of the Purchase Price and the filing of
the financing statement and delivery of the Mortgage Files to the Custodian
and the Custodian's receipt of the related Request for Certification, Buyer
shall become the sole owner of the Purchased Mortgage Loans and related
Repurchase Assets, free and clear of all liens and encumbrances.
(14) Underwriting Guidelines. The Underwriting Guidelines provided to
Buyer are the true and correct Underwriting Guidelines of the Sellers.
(15) Taxes. The Sellers and their Subsidiaries have filed all Federal
income tax returns and all other material tax returns that are required to
be filed by them and have paid all taxes due pursuant to such returns or
pursuant to any assessment received by any of them, 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 and their Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Sellers, adequate.
(16) Investment Company. Neither the Sellers nor any of their
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
(17) Chief Executive Office; Jurisdiction of Organization. During the
four months immediately preceding July 1, 2001 and on the Effective Date,
First NLC's chief executive office, is, and has been, located at 000 X.
Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxx Xxxxx, XX 00000. On the Effective
Date, First NLC's jurisdiction of organization is Florida. During the four
months immediately preceding July 1, 2001, and on the Effective Date, NLC,
Inc.'s chief executive office, is, and has been, located at 000 X.
Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxx Xxxxx, XX 00000. On the Effective
Date, NLC, Inc.'s jurisdiction of organization is Tennessee. The Sellers
shall provide Buyer with thirty days advance notice of any change in either
Seller's principal offices or places of business or jurisdiction. Neither
Seller has any trade name other than those listed on Schedule 13(a)(17).
During the preceding five years, neither Seller has been known by or done
business under any other name, corporate or fictitious, other than those
listed on Schedule 13(a)(17), and has filed or had filed against it any
bankruptcy receivership or similar petitions nor has made any assignments
for the benefit of creditors.
(18) Location of Books and Records. The location where each Seller
keeps its books and records, including all computer tapes and records
relating to the Purchased Mortgage Loans and the related Repurchase Assets
is its chief executive office.
(19) Adjusted Tangible Net Worth. On the Effective Date, First NLC's
Adjusted Tangible Net Worth is not less than $5 million.
(20) ERISA. Each Plan to which a Seller or its Subsidiaries make
direct contributions, and, to the knowledge of the Sellers, each other Plan
and each Multiemployer Plan, is in compliance in all material respects
with, and has been
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administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other Federal or State law.
(21) Adverse Selection. The Sellers have not selected the Purchased
Mortgage Loans in a manner so as to adversely affect Buyer's interests.
(22) Agreements. Neither Seller nor any Subsidiary of the Sellers is a
party to any agreement, instrument, or indenture or subject to any
restriction materially and adversely affecting its business, operations,
assets or financial condition, except as disclosed in the financial
statements described in Section 13(a)(5) hereof. Neither the Sellers nor
any Subsidiary thereof is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
any agreement, instrument, or indenture which default could have a material
adverse effect on the business, operations, properties, or financial
condition of the Sellers as a whole. No holder of any indebtedness of the
Sellers or of any of their Subsidiaries has given notice of any asserted
default thereunder.
(23) Other Indebtedness. All Indebtedness (other than Indebtedness
evidenced by this Agreement) of Sellers existing on the date hereof is
listed on Exhibit J hereto (the "Existing Indebtedness").
(24) Agency Approvals. With respect to each Agency Security and to the
extent necessary, each Seller is an FHA Approved Mortgagee and a VA
Approved Lender. Each Seller is also, 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 or either Seller having any reason
whatsoever to believe or suspect will occur prior to the issuance of the
Agency Security or the consummation of the Take-out Commitment, as the case
may be, including, without limitation, a change in insurance coverage which
would either make either 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. Should either Seller for any reason cease to
possess all such applicable approvals, or should notification to the
relevant Agency or to the Department of Housing and Urban Development, FHA
or VA be required, Sellers shall so notify Buyer immediately in writing.
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.
b. With respect to every Purchased Mortgage Loan, each Seller jointly
and severally represents and warrants to Buyer as of the applicable Purchase
Date for any Transaction and each date thereafter that each representation and
warranty set forth on Schedule 1 is true and correct.
c. The representations and warranties set forth in this Agreement
shall survive transfer of the Purchased Mortgage Loans to Buyer and shall
continue for so long as the Purchased Mortgage Loans are subject to this
Agreement. Upon discovery by either Seller,
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Servicer or Buyer of any breach of any of the representations or warranties set
forth in this Agreement, the party discovering such breach shall promptly give
notice of such discovery to the others. Buyer has the right to require, in its
unreviewable discretion, a Seller to repurchase within 1 Business Day after
receipt of notice from Buyer any Purchased Mortgage Loan (i) for which a breach
of one or more of the representations and warranties referenced in Section 13(b)
exists and which breach has a material adverse effect on the value of such
Mortgage Loan or the interests of Buyer or (ii) which is determined by Buyer, in
its good faith discretion, to be unacceptable for inclusion in a securitization;
provided, however, that in the event that the aggregate Purchase Price of
Transactions outstanding on the date such breach is discovered by a Seller or
either Seller receives notice from the Buyer equals no more than 50% of the
Maximum Aggregate Purchase Price, the Sellers shall have three (3) Business Days
to repurchase the related Purchased Mortgage Loan.
14. Covenants
Each Seller jointly and severally covenants with Buyer that, during the
term of this facility:
a. Adjusted Net Worth. For each quarter commencing after December 31,
2000, First NLC shall maintain an Adjusted Net Worth of at least $5 million.
b. Indebtedness to Adjusted Net Worth Ratio. For each quarter
commencing after December 31, 2000, First NLC's ratio of consolidated
Indebtedness to consolidated Adjusted Net Worth shall not exceed 20:1.
c. Litigation. The Sellers will promptly, and in any event within ten
(10) days after service of process on any of the following, give to Buyer notice
of all litigation, actions, suits, arbitrations, investigations (including,
without limitation, any of the foregoing which are threatened or pending) or
other legal or arbitrable proceedings affecting either Seller or any of its
Subsidiaries or affecting any of the Property of any of them before any
Governmental Authority that (i) questions or challenges the validity or
enforceability of any of the Program Agreements or any action to be taken in
connection with the transactions contemplated hereby, (ii) makes a claim
individually in an amount greater than $1 million or in an aggregate amount
greater than $3 million, (iii) which, individually or in the aggregate, if
adversely determined, could be reasonably likely to have a Material Adverse
Effect, or (iv) requires filing with the Office of the Comptroller of the
Currency in accordance its regulations.
d. Prohibition of Fundamental Changes. Neither Seller shall enter into
any transaction of merger or consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation, winding up or dissolution) or
sell all or substantially all of its assets; provided, that either Seller may
merge or consolidate with (a) any wholly owned subsidiary of either Seller, or
(b) any other Person if such Seller is the surviving corporation; and provided
further, that if after giving effect thereto, no Default would exist hereunder.
e. Maintenance of Profitability. First NLC shall not permit, for any
Test Period, its consolidated Net Income for such Test Period determined on a
monthly basis, before income taxes for such Test Period and distributions made
during such Test Period, to be less than $1.00.
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f. Servicer; Asset Tape. Upon the occurrence of any of the following
(a) the occurrence and continuation of an Event of Default, (b) upon any
Purchased Mortgage Loan becoming an Aged Loan, (c) the fifth Business Day of
each month, or (d) upon the request of Buyer, the Sellers shall cause Servicer
to provide to Buyer, electronically, in a format mutually acceptable to Buyer
and the Sellers, an Asset Tape by no later than the Reporting Date. The Sellers
shall not cause the 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 First NLC with the execution of this Agreement.
g. Insurance. The Sellers or their Affiliates, will continue to
maintain, for each Seller and its Subsidiaries, 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.
h. No Adverse Claims. Sellers warrant and will defend, and shall cause
any Servicer to defend, the right, title and interest of Buyer in and to all
Purchased Mortgage Loans and the related Repurchase Assets against all adverse
claims and demands.
i. Assignment. Except as permitted herein, neither Seller nor any
Servicer shall sell, assign, transfer or otherwise dispose of, or grant any
option with respect to, or pledge, hypothecate or grant a security interest in
or lien on or otherwise encumber (except pursuant to the Program Agreements),
any of the Purchased Mortgage Loans or any interest therein, provided that this
Section shall not prevent any transfer of Purchased Mortgage Loans in accordance
with the Program Agreements.
j. Security Interest. The Sellers shall do all things necessary to
preserve the Purchased Mortgage Loans and the related 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 Purchased
Mortgage Loans or the related Repurchase Assets to comply with all applicable
rules, regulations and other laws. The Sellers will not allow any default for
which any Seller is responsible to occur under any Purchased Mortgage Loans or
the related Repurchase Assets or any Program Agreement and the Sellers shall
fully perform or cause to be performed when due all of its obligations under any
Purchased Mortgage Loans or the related Repurchase Assets and any Program
Agreement.
k. Records.
(1) The Sellers shall collect and maintain or cause to be collected
and maintained all Records relating to the Purchased Mortgage Loans in
accordance with industry custom and practice for assets similar to the
Purchased Mortgage Loans, including those maintained pursuant to the
preceding subparagraph, and all such Records shall be in either Sellers' or
the Custodian's possession unless Buyer otherwise approves. Neither Seller
will allow any such papers, records or files that are an original or an
only copy to leave Custodian's possession, except for individual items
removed in connection with servicing a specific Mortgage Loan, in which
event the Sellers will obtain or cause to be obtained a receipt from a
financially responsible person for any such paper, record
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or file. Each Seller or the Servicer of the Purchased Mortgage Loans will
maintain all such Records not in the possession of Custodian in good and
complete condition in accordance with industry practices for assets similar
to the Purchased Mortgage Loans and preserve them against loss.
(2) For so long as Buyer has an interest in or lien on any Purchased
Mortgage Loan, the applicable Seller will hold or cause to be held all
related Records in trust for Buyer. The Sellers shall notify, or cause to
be notified, every other party holding any such Records of the interests
and liens in favor of Buyer granted hereby.
(3) Upon reasonable advance notice from Custodian or Buyer, the
applicable Seller shall (x) make any and all such Records available to
Custodian or Buyer to examine any such Records, either by their own
officers or employees, or by agents or contractors, or both, and make
copies of all or any portion thereof, and (y) permit Buyer or its
authorized agents to discuss the affairs, finances and accounts of such
Seller with its chief operating officer and chief financial officer and to
discuss the affairs, finances and accounts of such Seller with its
independent certified public accountants.
l. Books. Each Seller shall keep or cause to be kept in reasonable
detail books and records of account of its assets and business and shall clearly
reflect therein the transfer of Purchased Mortgage Loans to Buyer.
m. Approvals. The Sellers shall maintain all licenses, permits or
other approvals necessary for the Sellers to conduct their business and to
perform their obligations under the Program Agreements, and the Sellers shall
conduct their business strictly in accordance with applicable law.
n. Material Change in Business. Sellers shall not make any material
change in the nature of its business as carried on at the date hereof.
o. Underwriting Guidelines. Without the prior written consent of
Buyer, Sellers shall not amend or otherwise modify the Underwriting Guidelines.
Without limiting the foregoing, in the event that either 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.
p. Distributions. If an Event of Default has occurred and is
continuing, neither Seller shall pay any dividends with respect to any capital
stock or other equity interests in such entity, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of such Seller.
q. Applicable Law. Each Seller shall comply with the requirements of
all applicable laws, rules, regulations and orders of any Governmental
Authority.
r. Existence. Each Seller shall preserve and maintain its legal
existence and all of its material rights, privileges, licenses and franchises.
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s. Chief Executive Office; Jurisdiction of Organization. Neither
Seller shall move its chief executive office from the address referred to in
Section 13(a)(17) or change its jurisdiction of organization from the
jurisdiction referred to in Section 13(a)(17) unless it shall have provided
Buyer 30 days' prior written notice of such change.
t. Taxes. Each Seller shall pay and discharge all taxes, assessments
and governmental charges or levies imposed on it or on its income or profits or
on any of its property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and against which
adequate reserves are being maintained.
u. Transactions with Affiliates. Neither Seller will enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under the Program Agreements, (b) in
the ordinary course of such Seller's business and (c) upon fair and reasonable
terms no less favorable to such Seller than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate, or make a
payment that is not otherwise permitted by this Section to any Affiliate.
v. Guarantees. Neither 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 both Sellers do not exceed $2 million.
w. Indebtedness. Sellers shall not incur any additional material
Indebtedness in excess of $100,000 in the aggregate (other than (i) the Existing
Indebtedness in amounts not to exceed the amounts specified on Exhibit J hereto
and (ii) usual and customary accounts payable for a mortgage company) without
the prior written consent of Buyer.
x. Hedging. Each Seller has entered into Interest Rate Protection
Agreements with respect to the Conforming Mortgage Loans and Jumbo Mortgage
Loans, having terms with respect to protection against fluctuations in interest
rates acceptable to Buyer in its sole discretion.
y. True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of each Seller, any Affiliate
thereof or any of their officers furnished to Buyer hereunder and during Buyer's
diligence of such Seller are and will be true and complete and do not omit to
disclose any material facts necessary to make the statements herein or therein,
in light of the circumstances in which they are made, not misleading. All
required financial statements, information and reports delivered by each Seller
to Buyer pursuant to this Agreement shall be prepared in accordance with U.S.
GAAP, or, if applicable, to SEC filings, the appropriate SEC accounting
regulations.
z. Agency Approvals; Servicing. First NLC shall service all Purchased
Mortgage Loans which are Committed Mortgage Loans in accordance with the
applicable agency guide. Should either Seller, for any reason, cease to possess
all such applicable Agency Approvals, or should notification to the relevant
Agency or to the Department of Housing and Urban Development, FHA or VA be
required, such Seller shall so notify Buyer immediately in
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writing. Notwithstanding the preceding sentence, the Sellers shall take all
necessary action to maintain all of their applicable Agency Approvals at all
times during the term of this Agreement and each outstanding Transaction.
Sellers have 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.
aa. Take-out Payments. With respect to each Committed Mortgage Loan,
Sellers shall arrange that all payments under the related Take-out Commitment
shall be paid directly to Buyer at the account set forth in Section 9 hereof, or
to an account approved by Buyer in writing prior to such payment. With respect
to any Agency Take-out 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 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-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 Buyer has previously
approved the related Payee Number in writing in its sole discretion; with
respect to any Take-out Commitment with an Agency, the applicable agency
documents list Buyer as sole subscriber, unless otherwise agreed to in writing
by Buyer, in Buyer's sole discretion.
bb. No Pledge. Neither Seller shall pledge, transfer or convey any
security interest in the Collection Account to any Person without the express
written consent of Buyer.
15. Events of Default
Each of the following shall constitute an "Event of Default"
hereunder:
a. Payment Failure. Failure of any Seller to (i) make any payment of
Price Differential or Repurchase Price or any other sum which has become due, on
a Price Differential Payment Date or a Repurchase Date or otherwise, whether by
acceleration or otherwise, under the terms of this Agreement, any other
warehouse and security agreement or any other document evidencing or securing
indebtedness of Sellers to Buyer or to any affiliate of Buyer, or (ii) cure any
Margin Deficit when due pursuant to Section 6 hereof.
b. Cross Default, (i) Any Seller or any of such Seller's Affiliates,
individually or in the aggregate, shall be in default under (i) any Indebtedness
of Seller or of such Affiliate in an aggregate amount of more than $500,000
which default (1) involves the failure to pay a matured obligation, or (2)
permits the acceleration of the maturity of obligations by any other party to or
beneficiary with respect to such Indebtedness, or (ii) any other contract to
which any Seller or such Affiliate, individually or in the aggregate, is a party
in an aggregate amount of more than $500,000 which default (1) involves the
failure to pay a matured obligation, or (2) permits the acceleration of the
maturity of obligations by any other party to or beneficiary of such contract.
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c. Assignment. Assignment or attempted assignment by any Seller of
this Agreement or any rights hereunder without first obtaining the specific
written consent of Buyer, or the granting by any Seller of any security
interest, lien or other encumbrances on any Purchased Mortgage Loans to any
person other than Buyer.
d. Insolvency. An Act of Insolvency shall have occurred with respect
to any Seller, or any of its Affiliates.
e. Material Adverse Change. Any material adverse change in the
Property, business, financial condition or operations of any Seller or any of
their Affiliates 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 any Seller's ability
to perform its obligations under this Agreement or any other Program Agreement.
f. Breach of Financial Representation or Covenant or Obligation. A
breach by any Seller of any of the representations, warranties or covenants or
obligations set forth in Sections 13(a)(l), 13(a)(7), 13(a)(12), 13(a)(19),
13(a)(23), 00x, 00x, 00x, 00x, 00x, 00x, 14w or 14bb of this Agreement.
g. Breach of Non-Financial Representation or Covenant. A breach by any
Seller of any other material representation, warranty or covenant set forth in
this Agreement (and not otherwise specified in Section 15(f) above) breach is
not cured within five (5) Business Days(other than the representations and
warranties set forth in Schedule 1, which shall be considered solely for the
purpose of determining the Market Value and the obligation to repurchase such
Mortgage Loan unless (i) such Seller shall have made any such representations
and warranties with knowledge that they were materially false or misleading at
the time made, (ii) any such representations and warranties have been determined
by Buyer in its sole discretion to be materially false or misleading on a
regular basis, or (iii) Buyer, in its sole discretion, determines that such
breach of a material representation, warranty or covenant materially and
adversely affects (A) the condition (financial or otherwise) of any Seller, its
Subsidiaries or Affiliates; or (B) Buyer's determination to enter into this
Agreement or Transactions with any Seller, then such breach shall constitute an
immediate Event of Default and Sellers shall have no cure right hereunder);
provided, however, that in the sole discretion of Buyer, the Sellers shall have
up to ten (10) Business Days to cure such breach in the event that Buyer
determines that (a) such breach is capable of being cured in such time period,
(b) the related Seller is diligently working to cure such breach and is able to
provide evidence thereof to the Buyer and (c) the breach will not have Material
Adverse Effect on either Seller.
h. Change of Control. The occurrence of a Change in Control.
i. Failure to Transfer. Any Seller fails to transfer the Purchased
Mortgage Loans to Buyer on the applicable Purchase Date (provided Buyer has
tendered the related Purchase Price).
j. Judgment. A final judgment or judgments for the payment of money in
excess of $2.5 million in the aggregate shall be rendered against any Seller or
any of its Affiliates by one or more courts, administrative tribunals or other
bodies having jurisdiction and the same
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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.
k. Government Action. Any Governmental Authority or any person, agency
or entity acting or purporting to act under governmental authority shall have
taken any action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the Property of any Seller or any
Affiliate, or shall have taken any action to displace the management of any
Seller or any Affiliates or to curtail its authority in the conduct of the
business of any Seller or any Affiliate, or takes any action in the nature of
enforcement to remove, limit or restrict the approval of any Seller or Affiliate
as an issuer, buyer or a seller/servicer of Mortgage Loans or securities backed
thereby, and such action provided for in this subparagraph (1) shall not have
been discontinued or stayed within 30 days.
l. Inability to Perform. An officer of any Seller shall admit in
writing its inability to, or its intention not to, perform any of the Seller's
Obligations hereunder.
m. Security Interest. This Agreement shall for any reason cease to
create a valid, first priority security interest in any material portion of the
Purchased Mortgage Loans purported to be covered hereby.
n. Financial Statements. 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 such Seller as a
"going concern" or a reference of similar import.
An Event of Default shall be deemed to be continuing unless expressly
waived by Buyer in writing.
16. Remedies Upon Default
In the event that an Event of Default shall have occurred:
a. Buyer may, at its option (which option shall be deemed to have been
exercised immediately upon the occurrence of an Act of Insolvency), declare an
Event of Default to have occurred hereunder and, upon the exercise or deemed
exercise of such option, the Repurchase Date for each Transaction hereunder
shall, if it has not already occurred, be deemed immediately to occur (except
that, in the event that the Purchase Date for any Transaction has not yet
occurred as of the date of such exercise or deemed exercise, such Transaction
shall be deemed immediately canceled). Buyer shall (except upon the occurrence
of an Act of Insolvency of either Seller or any Affiliate) give written notice
to the Sellers of the exercise of such option as promptly as practicable.
b. If Buyer exercises or is deemed to have exercised the option
referred to in subparagraph (a) of this Section, (i) 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 subparagraph
(a) of this Section, shall thereupon become immediately due and payable, (ii)
all Income paid after such exercise or deemed exercise shall be retained by
Buyer and applied, in Buyer's sole discretion, to the aggregate unpaid
Repurchase
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Prices for all outstanding Transactions and any other amounts owing by a Seller
hereunder, and (iii) each Seller shall immediately deliver to Buyer the Mortgage
Files relating to any Purchased Mortgage Loans subject to such Transactions then
in such Seller's possession or control.
c. Buyer also shall have the right to obtain physical possession, and
to commence an action to obtain physical possession, of all Records and files of
the Sellers relating to the Purchased Mortgage Loans and all documents relating
to the Purchased Mortgage Loans (including, without limitation, any legal,
credit or servicing files with respect 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. To obtain physical possession of any Purchased
Mortgage Loans held by Custodian, Buyer shall present to Custodian a Trust
Receipt and Certification. Buyer shall be entitled to specific performance of
all agreements of the Sellers contained in this Agreement.
d. Buyer shall have the right to direct all servicers then servicing
any Purchased Mortgage Loans to remit all collections thereon to Buyer, and if
any such payments are received by any Seller, the Sellers shall not commingle
the amounts received with other funds of the Sellers and shall promptly pay them
over to Buyer. Buyer shall also have the right to terminate any one or all of
the servicers then servicing any Purchased Mortgage Loans with or without cause.
In addition, Buyer shall have the right to immediately sell the Purchased
Mortgage Loans. Such disposition of Purchased Mortgage Loans may be, at Buyer's
option, on either a servicing-released or a servicing-retained basis. Buyer
shall be entitled to place the Purchased Mortgage Loans in a pool for issuance
of mortgage-backed securities at the then-prevailing price for such securities
and to sell such securities for such prevailing price in the open market. Buyer
shall also be entitled to sell any or all of such Mortgage Loans individually
for the prevailing price. Buyer shall provide the Sellers with written notice of
any action it takes pursuant to this Section with regard to Purchased Mortgage
Loans.
e. Upon the happening of one or more Events of Default, Buyer may
apply any proceeds from the liquidation of the Purchased Mortgage Loans to the
Repurchase Prices hereunder and all other Obligations in the manner Buyer deems
appropriate in its sole discretion.
f. 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 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.
g. To the extent permitted by applicable law, the Sellers shall be
liable to Buyer for interest on any amounts owing by the Sellers hereunder, from
the date the Sellers become liable for such amounts hereunder until such amounts
are (i) paid in full by the Sellers or
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(ii) satisfied in full by the exercise of Buyer's rights hereunder. Interest on
any sum payable by the Sellers under this Section 16(g) shall be at a rate equal
to the Post-Default Rate.
h. Buyer shall have, in addition to its rights hereunder, any rights
otherwise available to it under any other agreement or applicable law.
i. Buyer may exercise one or more of the remedies available to Buyer
immediately upon the occurrence of an Event of Default and, except to the extent
provided in subsections (a) and (d) of this Section, at any time thereafter
without notice to the Sellers. All rights and remedies arising under this
Agreement as amended from time to time hereunder are cumulative and not
exclusive of any other rights or remedies which Buyer may have.
j. 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
Purchased Mortgage Loans, 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.
k. Buyer shall have the right to perform reasonable due diligence with
respect to Sellers and the Mortgage Loans, which review shall be at the expense
of Sellers.
17. Reports
a. Notices. The Sellers shall furnish to Buyer (x) promptly, copies of
any material and adverse notices (including, without limitation, notices of
defaults, breaches, potential defaults or potential breaches) and any material
financial information that is not otherwise required to be provided by the
Sellers hereunder which is given to the Sellers' lenders, (y) immediately,
notice of the occurrence of any Event of Default hereunder or default or breach
by the Sellers or Servicer of any obligation under any Program Agreement or any
material contract or agreement of the Sellers or Servicer or the occurrence of
any event or circumstance that such party reasonably expects has resulted in, or
will, with the passage of time, result in, a Material Adverse Effect or an Event
of Default or such a default or breach by such party and (z) the following:
(1) as soon as available and in any event within forty-five (45)
calendar days after the end of each quarter, the unaudited consolidated and
consolidating 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, accompanied by a
certificate of a Responsible Officer of Sellers, which certificate shall
state that said combined consolidated and consolidating financial
statements fairly present in all material respects the combined
consolidated and consolidating financial condition and results of
operations of Sellers in accordance with GAAP, consistently applied, as at
the end of, and for, such period (subject to normal year-end adjustments);
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(2) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of Sellers, the combined consolidated and
consolidating balance sheets of Sellers as at the end of such fiscal year
and the combined related consolidated and consolidating statements of
income and retained earnings and of cash flows for the Sellers for such
year, setting forth in each case in comparative form the figures for the
previous year, accompanied by an opinion thereon of independent certified
public accountants of recognized national standing, which opinion and the
scope of audit shall be acceptable to Buyer in its sole discretion, shall
have no "going concern" qualification and shall state that said
consolidated and consolidating financial statements fairly present the
consolidated and consolidating financial condition and results of
operations of Sellers as at the end of, and for, such fiscal year in
accordance with GAAP;
(3) such other prepared statements that Buyer may reasonably request;
(4) if applicable, copies of any 10-Ks, 10-Qs, registration statements
and other "corporate finance" SEC filings (other than 8-Ks) by either
Seller, within 5 Business Days of their filing with the SEC; provided,
that, the Sellers or any Affiliate will provide Buyer and Credit Suisse
First Boston Corporation with a copy of the annual 10-K filed with the SEC
by the Sellers or their affiliates, no later than 90 days after the end of
the year;
(5) from time to time such other information regarding the financial
condition, operations, or business of the Sellers as Buyer may reasonably
request;
(6) as soon as reasonably possible, and in any event within thirty
(30) days after a Responsible Officer of the Sellers has knowledge of the
occurrence of any Event of Termination, stating the particulars of such
Event of Termination in reasonable detail;
(7) As soon as reasonably possible, notice of any of the following
events:
(a) change in the insurance coverage required of any Seller,
Servicer or any other Person pursuant to any Program Agreement, with a
copy of evidence of same attached;
(b) any material dispute, litigation, investigation, proceeding
or suspension between any Seller or Servicer, on the one hand, and any
Governmental Authority or any Person;
(c) any material change in accounting policies or financial
reporting practices of any Seller or Servicer;
(d) with respect to any Purchased Mortgage Loan, immediately upon
receipt of notice or knowledge thereof, that the underlying Secured
Property has been damaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty, or otherwise
damaged so as to affect adversely the value of such Mortgaged Loan;
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(e) any material issues raised upon examination of any Seller or
any Seller's facilities by any Governmental Authority;
(f) promptly upon receipt of notice or knowledge of (i) any
default related to any Repurchase Asset, (ii) any lien or security
interest (other than security interests created hereby or by the other
Program Agreements) on, or claim asserted against, any of the
Purchased Mortgage Loans; and
(g) any other event, circumstance or condition that has resulted,
or has a possibility of resulting, in a Material Adverse Effect with
respect to any Seller or Servicer.
b. Officer's Certificates. The Sellers will furnish to Buyer, at the
time the Sellers furnish each set of financial statements pursuant to Section
17(a)(l) or (2) above, a certificate of a Responsible Officer of Sellers in the
form of Exhibit D hereto.
c. Mortgage Loan Reports. The Sellers will furnish to Buyer monthly
electronic Mortgage Loan performance data, including, without limitation,
delinquency reports (i.e., delinquency, foreclosure and net charge-off reports).
d. Asset Tape. The Sellers shall provide to Buyer, electronically, in
a format mutually acceptable to Buyer and the Sellers, an Asset Tape by no later
than the Reporting Date.
e. Other. The Sellers shall deliver to Buyer any other reports or
information reasonably requested by Buyer or as otherwise required pursuant to
this Agreement.
18. Repurchase Transactions
Buyer may, in its sole election, engage in repurchase transactions
with the Purchased Mortgage Loans or otherwise pledge, hypothecate, assign,
transfer or otherwise convey the Purchased Mortgage Loans with a counterparty of
Buyer's choice. Unless an Event of Default shall have occurred, no such
transaction shall relieve Buyer of its obligations to transfer Purchased
Mortgage Loans to the Sellers pursuant to Section 4 or 6 hereof, or of Buyer's
obligation to credit or pay Income to, or apply Income to the obligations of,
the Sellers pursuant to Section 7 hereof. In the event Buyer engages in a
repurchase transaction with any of the Purchased Mortgage Loans or otherwise
pledges or hypothecates any of the Purchased Mortgage Loans, Buyer shall have
the right to assign to Buyer's counterparty any of the applicable
representations or warranties herein and the remedies for breach thereof, as
they relate to the Purchased Mortgage Loans that are subject to such repurchase
transaction.
19. Single Agreement
Buyer and the Sellers acknowledge that, and have entered hereunto, and
will enter into each Transaction hereunder, in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, Buyer and each Seller agrees (i) to perform all of its obligations
in respect of each Transaction hereunder, and that a default in the performance
of any such obligations shall constitute a default by it in respect of all
Transactions
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hereunder, (ii) that each of them shall be entitled to set-off claims and apply
property held by them in respect of any Transaction against obligations owing to
them in respect of any other Transactions hereunder and (iii) that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.
20. Notices and Other Communications
Any and all notices (with the exception of Transaction Requests or
Purchase Confirmations, which shall be delivered via facsimile only),
statements, demands or other communications hereunder may be given by a party to
the other by mail, facsimile, messenger or otherwise to the address specified
below, or so sent to such party at any other place specified in a notice of
change of address hereafter received by the other. All notices, demands and
requests hereunder may be made orally, to be confirmed promptly in writing, or
by other communication as specified in the preceding sentence.
If to Sellers:
First NLC Financial Services, LLC
000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone Number: 000-000-0000
Fax Number: 000-000-0000
NLC, Inc.
000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Phone Number: 000-000-0000
Fax Number: 000-000-0000
If to Buyer:
For Transaction Requests and Purchase Confirmations:
Credit Suisse First Boston Mortgage Capital LLC
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Phone Number: 000-000-0000
Fax Number: 000-000-0000
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For all other Notices:
Credit Suisse First Boston Mortgage Capital LLC
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Xxxxx Xxxxxx
with a copy to:
Credit Suisse First Boston Mortgage Capital LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Legal Department
21. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the
parties containing general terms and conditions for repurchase transactions.
Each provision and agreement herein shall be treated as separate and independent
from any other provision or agreement herein and shall be enforceable
notwithstanding the unenforceability of any such other provision or agreement.
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.
22. Non assignability
The Program Agreements are not assignable by either Seller. Buyer may
from time to time assign all or a portion of its rights and obligations under
this Agreement and the Program Agreements upon five (5) days prior written
notice to the Sellers; 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 Program Agreement to the extent of the percentage or portion
set forth in the Assignment and Acceptance, and shall succeed to the applicable
rights and obligations of Buyer hereunder, and (b) Buyer shall, to the extent
that such rights and obligations have been so assigned by it to either (i) an
Affiliate of Buyer which assumes the obligations of Buyer or (ii) to another
Person approved by the Sellers (such approval not to be unreasonably withheld)
which assumes the obligations of Buyer, be released from its obligations
hereunder and under the Program Agreements. 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 either Seller.
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23. Set-off
In addition to any rights and remedies of Buyer provided by law, 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 Buyer or any branch or agency thereof to or for the credit or the
account of the Sellers. Buyer agrees promptly to notify the Sellers after any
such set-off and application made by Buyer; provided, that the failure to give
such notice shall not affect the validity of such set-off and application.
24. Binding Effect; Governing Law; Jurisdiction
a. This Agreement shall be binding and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. The
Sellers acknowledges that the obligations of Buyer hereunder or otherwise are
not the subject of any guaranty by, or recourse to, any direct or indirect
parent or other Affiliate of Buyer. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
b. EACH SELLER HEREBY WAIVES TRIAL BY JURY. EACH SELLER HEREBY
IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF
NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR
PROCEEDING. EACH SELLER HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE
TO, EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN XXX XXXXXX XX XXX XXXXX XX XXX
XXXX AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM
AGREEMENTS.
25. No Waivers, Etc.
No express or implied waiver of any Event of Default by either party
shall constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to exercise
any other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to give
a notice pursuant to Section 6(a), 16(a) or otherwise, will not constitute a
waiver of any right to do so at a later date.
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26. 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 Purchased 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 Purchased
Mortgage Loans delivered to it in connection with Transactions hereunder or to
exercise any other remedies pursuant to Section 16 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 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).
27. 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 SEC under Section 15 of the 1934 Act, the
Securities Investor Protection Corporation has taken the position that the
provisions of the SIPA do not protect the other party with respect to any
Transaction hereunder;
b. in the case of Transactions in which one of the parties is a
government securities broker or a government securities dealer registered with
the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to
the other party with respect to any Transaction hereunder; and
c. in the case of Transactions in which one of the parties is a
financial institution, funds held by the financial institution pursuant to a
Transaction hereunder are not a deposit and therefore are not insured by the
Federal Deposit Insurance Corporation or the National Credit Union Share
Insurance Fund, as applicable.
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28. Power of Attorney
Each Seller hereby authorizes Buyer to file such financing statement
or statements relating to the Purchased Mortgage Loans without such Seller's
signature thereon as Buyer, at its option, may deem appropriate. Each Seller
hereby appoints Buyer as such Seller's agent and attorney-in-fact to execute any
such financing statement or statements in such Seller's name and to perform all
other acts which Buyer deems appropriate to perfect and continue its ownership
interest in and/or the security interest granted hereby, if applicable, and to
protect, preserve and realize upon the Purchased Mortgage Loans, including, but
not limited to, the right to endorse notes, complete blanks in documents,
transfer servicing, and sign assignments on behalf of such Seller as its agent
and attorney-in-fact. This agency and power of attorney is coupled with an
interest and is irrevocable without Buyer's consent. Notwithstanding the
foregoing, the power of attorney hereby granted may be exercised only during the
occurrence and continuance of any Event of Default hereunder. The Sellers shall
pay the filing costs for any financing statement or statements prepared pursuant
to this Section 28.
29. Buyer May Act Through Affiliates
Buyer may, from time to time, designate one or more affiliates for the
purpose of performing any action hereunder.
30. Indemnification; Obligations
a. Each Seller agrees to hold Buyer and each of its respective
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") harmless from and indemnify each Indemnified Party (and
will reimburse each Indemnified Party as the same is incurred) against all
liabilities, losses, damages, judgments, costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) of any kind which may be
imposed on, incurred by, or asserted against any Indemnified Party relating to
or arising out of this Agreement, any Transaction Request, Purchase
Confirmation, any Program Agreement or any transaction contemplated hereby or
thereby resulting from anything other than the Indemnified Party's gross
negligence or willful misconduct. Each Seller also agrees to reimburse each
Indemnified Party for all reasonable expenses in connection with the enforcement
of this Agreement and the exercise of any right or remedy provided for herein,
any Transaction Request, Purchase Confirmation and any Program Agreement,
including, without limitation, the reasonable fees and disbursements of counsel.
Each Seller's agreements in this Section 30 shall survive the payment in full of
the Repurchase Price and the expiration or termination of this Agreement. Each
Seller hereby acknowledges that its obligations hereunder are recourse
obligations of such Seller are not limited to recoveries each Indemnified Party
may have with respect to the Purchased Mortgage Loans. Each Seller also agrees
not to assert any claim against Buyer or any of its Affiliates, or any of their
respective officers, directors, employees, attorneys and agents, on any theory
of liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to the facility established hereunder, the actual
or proposed use of the proceeds of the Transactions, this Agreement or any of
the transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT
TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT
NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
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b. Without limiting the provisions of Section 30(a) hereof, if the
Sellers fail to pay when due any costs, expenses or other amounts payable by it
under this Agreement, including, without limitation, fees and expenses of
counsel and indemnities, such amount may be paid on behalf of the Sellers by
Buyer, in its sole discretion.
31. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument.
32. Confidentiality
This Agreement and its terms, provisions, supplements and amendments,
and notices hereunder, are proprietary to Buyer and Agent and shall be held by
the Sellers in strict confidence and shall not be disclosed to any third party
without the written consent of Buyer except for (i) disclosure to the Sellers'
direct and indirect affiliates and Subsidiaries, attorneys or accountants, but
only to the extent such disclosure is necessary and such parties agree to hold
all information in strict confidence, or (ii) disclosure required by law, rule,
regulation or order of a court or other regulatory body.
33. Recording of Communications
Buyer and the Sellers have the right (but not the obligation) from
time to time to make or cause to be made tape recordings of communications
between its employees and those of the other party with respect to Transactions.
Buyer and the Sellers consent to the admissibility of such tape recordings in
any court, arbitration, or other proceedings. The parties agree that a duly
authenticated transcript of such a tape recording shall be deemed to be a
writing conclusively evidencing the parties' agreement.
34. Non-Utilization Fee
No later than 5th Business Day following the end of each calendar
month, the Sellers shall pay in immediately available funds to Buyer a
non-refundable fee calculated in accordance with the formula set forth in the
schedule attached hereto as Annex I. Such fee shall commence and accrue after
the 60th day following the Closing 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.
35. Periodic Due Diligence Review
Each Seller acknowledges that Buyer has the right to perform
continuing due diligence reviews with respect to the Mortgage Loans, for
purposes of verifying compliance with the representations, warranties and
specifications made hereunder, or otherwise, and each Seller agrees that upon
reasonable (but no less than one (1) Business Day's) prior notice unless an
Event of Default shall have occurred, in which case no notice is required, to
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,
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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 Assets Schedule 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 agrees 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 Sellers. Each Seller
further agrees 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
35 ("Due Diligence Costs").
36. Joint and Several Obligations.
Sellers and Buyer hereby acknowledge and agree that Sellers are each
jointly and severally liable to Buyer for all of their respective
representations, warranties and covenants hereunder.
[Signature Page Follows]
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Credit Suisse First Boston Mortgage Capital LLC
By: /s/ Illegible
-------------------------------------------
Title: PRESIDENT
Date: 11/29/01
First NLC Financial Services, LLC
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Exec. Vice Pres.
----------------------------------------
Date: 12/03/01
-----------------------------------------
NLC, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Exec. Vice Pres.
----------------------------------------
Date: 12/03/01
-----------------------------------------
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED
MORTGAGE LOANS
With respect to any representations and warranties made to the best of Sellers'
knowledge, in the event that it is discovered that the circumstances with
respect to the related Mortgage Loan are not accurately reflected in such
representation and warranty notwithstanding the knowledge or lack of knowledge
of the Sellers (other than the representations and warranties made in paragraphs
(e) and (ee)), then, notwithstanding that such representation and warranty is
made to the best of the Sellers' knowledge, such Mortgage Loan shall be assigned
a Market Value of zero.
(a) Payments Current. All payments required to be made up to the
Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent 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.
(b) No Outstanding Charges. All taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and payable.
Neither Seller nor the Qualified Originator from which Seller acquired the
Mortgage Loan has 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 proceeds of the Mortgage Loan, whichever is earlier, to the
day which precedes by one month the Due Date of the first installment of
principal and interest thereunder.
(c) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination; except by a written instrument which has been
recorded, if necessary to protect the interests of Buyer, and which has been
delivered to the Custodian and the terms of which are reflected in the Mortgage
Loan Schedule and Exception Report. The substance of any such waiver, alteration
or modification has been approved by the title insurer, to the extent required,
and its terms are reflected on the Mortgage Loan Schedule and Exception Report.
No Mortgagor in respect of the Mortgage Loan has been released, in whole or in
part, except in connection with an assumption agreement approved by the title
insurer, to the extent required by such policy, and which assumption agreement
is part of the Mortgage File delivered to the Custodian and the terms of which
are reflected in the Mortgage Loan Schedule and Exception Report.
Schedule 1-1
(d) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation,
the defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor in respect of the Mortgage Loan was a debtor
in any state or Federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated. Sellers have no knowledge nor has it received any
notice that any Mortgagor in respect of the Mortgage Loan is a debtor in any
state or federal bankruptcy or insolvency proceeding. The term "originated"
shall mean the original funding of a Mortgage Loan by the related Seller.
(e) 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 applicable 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) the outstanding principal balance of the Mortgage Loan and,
with respect to any Second Lien Mortgage Loan, the outstanding principal balance
of the prior mortgage loan, (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 the applicable 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
Sellers. 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 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.
Neither Seller has engaged in, and 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
Schedule 1-2
be received, retained or realized by any attorney, firm or other Person, and no
such unlawful items have been received, retained or realized by either Seller.
(f) Compliance with Applicable Laws. 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
applicable Seller 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.
(g) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, 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 release,
cancellation, subordination or rescission. Neither 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
either Seller waived any default resulting from any action or inaction by the
Mortgagor.
(h) Location and Type of Mortgaged Property. The Mortgaged Property is
located in an Acceptable State as identified in the Mortgage Loan Schedule and
Exception Report and consists of a single 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 low-rise or, to the extent
permitted by the Underwriting Guidelines, a high-rise, condominium project, or
an individual unit in a planned unit development or a de minimis planned unit
development; provided, however, that any condominium unit or planned unit
development shall conform to underwriting guidelines acceptable to Buyer in its
sole discretion and that no residence or dwelling is a mobile home. No portion
of the Mortgaged Property is used for commercial purposes; provided, that, the
Mortgaged Property may be a mixed use property if such Mortgaged Property
conforms to underwriting guidelines acceptable to Buyer in its sole discretion.
(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
Schedule 1-3
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;
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 first lien and first priority security interest on
the property described therein and 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.
(j) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
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. 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. Sellers have
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
representations set forth herein. To the best of Sellers' 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. There is no further requirement for
future advances under the Mortgage Loan, 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 were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.
(1) Ownership. The applicable Seller has full right to sell the
Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge,
Schedule 1-4
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 Agreement and following the sale of each Mortgage
Loan, 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
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 insuring the applicable Seller, its successors and assigns, as to the
first or second priority lien of the Mortgage, as applicable in 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 (1), (2) and (3) and, with respect to Second Lien Mortgage Loans, clause
(4) of paragraph (i) of this Part I of 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 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 applicable 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 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 applicable 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 either 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 has
occurred which, with the passage of time or with notice and the expiration of
any grace or cure period, would
Schedule 1-5
constitute a default, breach, violation or event of acceleration, and neither
Seller nor their predecessors have waived any default, breach, violation or
event of acceleration.
(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 the law could give rise to such liens) affecting the
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the Mortgage.
(q) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property. To the best of either Seller's knowledge, no improvement
located on or being part of the Mortgaged Property is in violation of any
applicable zoning and building law, ordinance or regulation.
(r) Origination; Payment Terms. The Mortgage Loan was originated by or
in conjunction with a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 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 funds were disbursed in connection
with the Mortgage Loan. 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 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 of the first
payment under the Mortgage Note is no more than 60 days from the date of the
Mortgage Note.
(s) 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.
(t) Occupancy of the Mortgaged Property. As of the Purchase Date 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
Schedule 1-6
certificates of occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities. Neither Seller has received
notification from any Governmental Authority that the Mortgaged Property is in
material non-compliance with such laws or regulations, is being used, operated
or occupied unlawfully or has failed to have or obtain such inspection, licenses
or certificates, as the case may be. Neither Seller has received notice of any
violation or failure to conform with any such law, ordinance, regulation,
standard, license or certificate. With respect to any Mortgage Loan originated
with an "owner-occupied" Mortgaged Property, the Mortgagor represented at the
time of origination of the Mortgage Loan that the Mortgagor would occupy the
Mortgaged Property as the Mortgagor's primary residence. The Mortgage Note and
Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae.
(u) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (i) above.
(v) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and 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 Custodian or
Buyer to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor.
(w) Transfer of Mortgage Loans. Except with respect to Mortgage Loans
intended for purchase by GNMA and for 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.
(x) Due-On-Sale. Except with respect to Mortgage Loans intended for
purchase by GNMA, 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 mortgagee thereunder.
(y) No Buydown Provisions; No Graduated Payments or Contingent
Interests. Except with respect to Agency Mortgage Loans, the Mortgage Loan does
not contain provisions pursuant to which Monthly Payments are paid or partially
paid with funds deposited in any separate account established by either Seller,
the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other
than the Mortgagor nor does it contain 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.
(z) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the Purchase Date have been 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 priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other
Schedule 1-7
title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan.
(aa) No Condemnation Proceeding. There is no condemnation proceeding
pending or, to the best of either Seller's knowledge, threatened, with respect
to the Mortgaged Property.
(bb) Collection Practices; Escrow Deposits; Interest Rate Adjustments.
The origination and collection practices used by the originator, each servicer
of the Mortgage Loan and the applicable Seller with respect to the Mortgage Loan
have been in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and proper.
With respect to escrow deposits and Escrow Payments, (other than with respect to
each Second Lien Mortgage Loan and for which the mortgagee under the first lien
is collecting Escrow Payments) all such payments are in the possession of, or
under the control of, the applicable Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. All Escrow Payments have been collected in full compliance with
state and federal law. An escrow of funds is not prohibited by applicable law
and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due either Seller have
been capitalized under the Mortgage or the Mortgage Note. 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, federal and local law has been properly paid and credited.
(cc) Conversion to Fixed Interest Rate. Except as expressly approved
in writing by Buyer, with respect to adjustable rate Mortgage Loans, the
Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
(dd) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable 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 either Seller or by any officer, director, or
employee of either Seller or any designee of thereof or any corporation in which
either Seller or any officer, director, or employee had a financial interest at
the time of placement of such insurance.
(ee) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified either Seller, and neither Seller has any knowledge, of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors' Civil
Relief Act of 1940.
(ff) Appraisal. The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage Loan application
by a qualified appraiser, duly appointed by the applicable Seller, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser
Schedule 1-8
both satisfy the requirements of Title XI of the Federal Institutions Reform,
Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated.
(gg) Disclosure Materials. 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 adjustable rate mortgage loans, and
the applicable Seller maintains such statement in the Mortgage File.
(hh) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property.
(ii) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Purchase Date (whether or not known to either Seller
on or prior to such date) which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any private mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of either Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay.
(jj) Capitalization of Interest. The Mortgage Note does not by its
terms provide for the capitalization or forbearance of interest.
(kk) 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 neither Seller has financed nor owns
directly or indirectly, any equity of any form in the Mortgaged Property or the
Mortgagor.
(11) 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 the applicable Seller or any Affiliate or
correspondent of such Seller, except in connection with a refinanced Mortgage
Loan; provided, however, that no such refinanced Mortgage Loan shall have been
originated pursuant to a streamlined mortgage loan refinancing program.
(mm) Origination Date. The origination date is no earlier than thirty
(30) days prior to the related Purchase Date.
Schedule 1-9
(nn) No Exception. The Custodian has not noted any material exceptions
on a Mortgage Loan Schedule and Exception Report with respect to the Mortgage
Loan which would materially adversely affect the Mortgage Loan or Buyer's
interest in the Mortgage Loan.
(oo) Mortgage Submitted for Recordation. The Mortgage either has been
or will promptly be submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located.
(pp) 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 applicable Seller and held in such Seller's name.
(qq) 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.
(rr) Other Encumbrances. To the best of each 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.
(ss) 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.
(tt) 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.
(uu) Underwriting Guidelines. Each Purchased Mortgage Loan has been
originated in accordance with the Underwriting Guidelines (including all
supplements or amendments thereto) previously provided to Buyer.
(vv) Aging. The Purchase Date for such Purchased Mortgage Loan has not
been more than 151 days prior to the date of determination.
(ww) Committed Mortgage Loans. Each Committed Mortgage Loan is covered
by a Take-out 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 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 Take-out Commitment is a legal, valid and binding
obligation of each Seller enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar
Schedule 1-10
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).
(xx) Primary Mortgage Guaranty Insurance. Each Mortgage Loan which is
required by the Underwriting Guidelines to have primary mortgage insurance is
insured as to payment defaults by a policy of primary mortgage guaranty
insurance in the amount required where applicable, and by an insurer approved,
by the applicable Take-out Investor, if applicable, and all provisions of such
primary mortgage guaranty insurance have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid. 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
applicable 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 applicable 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.
(yy) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans are classified as (a) "high cost" loans under the Home Ownership
and Equity Protection Act of 1994 or (b) "high cost," "threshold," or
"predatory" loans under any other applicable state, federal or local law.
(zz) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that
is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing
by the applicable Seller to hold the related Mortgage Loan Documents as agent
and bailee for Buyer or Buyer agent and to promptly forward such Mortgage Loan
Documents in accordance with the provisions of the Custodial Agreement and the
Escrow Instruction Letter.
(aaa) 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. 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.
Schedule 1-11
Annex I
Non-Utilization Fee Formula
The Non-Utilization Fee for each calendar month shall be an amount
equal to the product of (x) 0.25% per annum and (y) the excess of (I) 50% of the
Maximum Aggregate Purchase Price over (II) the average daily Purchase Price of
the Purchased Mortgage Loans during such calendar month.
In the event that the Buyer fails to enter into one or more
Transactions for any reason other than the failure of the Sellers to satisfy the
conditions precedent listed in Section 10 hereof (other than the occurrence
and/or continuance of any of the events in Section 10(b)(8) hereof) (such
Transaction, a "Declined Transaction"), the non-utilization fee will be
recalculated, for the period of time from and after the date of the request for
such Declined Transaction up to but not including the date, if any, on which
Buyer enters into a Transaction with the Sellers, based upon an amount equal to
the product of (x) 0.25% per annum and (y) the excess, if any, of (I) the
difference between (A) 50% of the Maximum Aggregate Purchase Price minus (B) the
amount of the Purchase Price requested for each such Declined Transaction over
(II) the average daily Purchase Price of the Purchased Mortgage Loans during
such calendar month. At such time that Buyer enters into a subsequent
Transaction with either Seller, the non-utilization fee will be calculated using
the formula set forth in the preceding paragraph.
In the event that Buyer has given Sellers notice of additional amounts
required to be paid by the Sellers pursuant to Section ll(b), and as a result
thereof, Sellers give Buyer irrevocable written notice that they will not
request to enter into any further Transactions under this Agreement and
repurchase all Mortgage Loans subject to Transactions hereunder, following the
last to occur of the events described in this sentence, the non-utilization fee
shall cease to accrue hereunder.
A-II-1
EXHIBIT A
FORM OF TRANSACTION REQUEST
[Date]
Credit Suisse First Boston Mortgage Capital LLC
[Address]
Attention:
----------------------
Re: Master Repurchase Agreement dated as of December 20, 2001
(the "Master Repurchase Agreement") by and among First NLC
Financial Services, LLC, NLC, Inc. and Credit Suisse First Boston Mortgage
Capital LLC
[Name] hereby requests that Credit Suisse First Boston Mortgage Capital LLC
("CSFBMCL") enter into a Transaction with respect to the Mortgage Loans listed
on the Mortgage Loan Schedule and Exception Report attached hereto on Attachment
1 and as set forth below, pursuant to the Master Repurchase Agreement.
TOTAL NUMBER OF MORTGAGE Mortgage Loans - (See Mortgage Loan
LOANS ----
Schedule and Exception Report)
ORIGINAL PRINCIPAL AMOUNT OF
MORTGAGE LOANS: $
CURRENT PRINCIPAL AMOUNT OF
MORTGAGE LOANS: $
PROPOSED PURCHASE PRICE: $
PURCHASE PRICE INCREASE: $
AGGREGATE PURCHASE PRICE: $
PROPOSED PURCHASE DATE:
The Master Repurchase Agreement is incorporated by reference into this
Transaction Request and is made a part hereof as if it were fully set forth
herein. (All capitalized terms used herein but not defined herein shall have the
meanings specified in the Master Repurchase Agreement.)
[Name]
By:
----------------------------------
Name:
Title:
[wire instructions]
A-1
EXHIBIT B
FORM OF PURCHASE CONFIRMATION
[Date]
First NLC Financial Services, LLC
000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
NLC, Inc.
000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx Xxxxx, XX 00000
Attention:
Credit Suisse First Boston Mortgage Capital LLC ("CSFBMCL") is pleased to
confirm your sale and our purchase of the Mortgage Loans described below and on
the attached Mortgage Loan Schedule and Exception Report pursuant to the Master
Repurchase Agreement dated as of December 20, 2001 (the "Master Repurchase
Agreement") by and among First NLC Financial Services, LLC, NLC, Inc. and Credit
Suisse First Boston Mortgage Capital LLC under the following terms and
conditions:
-----------------------------------------------------------------------------
Market Value: $
-----------------------------------------------------------------------------
Current Principal Amount of Mortgage Loans: $
-----------------------------------------------------------------------------
Aggregate Purchase Price: $
-----------------------------------------------------------------------------
Purchase Date:
-----------------------------------------------------------------------------
Repurchase Date:
-----------------------------------------------------------------------------
Pricing Rate:
-----------------------------------------------------------------------------
ADDITIONAL INFORMATION:
-----------------------------------------------------------------------------
Aggregate Purchase Price (date): $
-----------------------------------------------------------------------------
Less Previous Aggregate Purchase Price: $
-----------------------------------------------------------------------------
Less Price Differential due on (date): $
-----------------------------------------------------------------------------
Net funds due [CSFB]/[Name] on (date): $
-----------------------------------------------------------------------------
B-1
The Master Repurchase Agreement is incorporated by reference into this
Transaction Confirmation, is made a part hereof as if it were fully set forth
herein and is extended hereby until all amounts due in connection with this
Transaction are paid in full.
All capitalized terms used herein but not defined herein shall have the meanings
specified in the Master Repurchase Agreement.
CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC
By:
-----------------------------------
Name:
Title:
FIRST NLC FINANCIAL SERVICES, LLC
By:
------------------------------------
Name:
Title:
NLC, Inc.
By:
------------------------------------
Name:
Title:
B-2
EXHIBIT C
MORTGAGE LOAN SCHEDULE AND EXCEPTION REPORT
MORTGAGE LOAN CHARACTERISTICS
1. Seller's Mortgage Loan identifying number;
2. the Mortgagor's and Co-Mortgagor's name;
3. the street address of the Mortgaged Property including the city, state,
county, and the zip code;
4. a code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a townhouse or a unit in a
high-rise or low-rise condominium project;
5. a code indicating the type of Mortgage Loan (e.g. Alt-A Mortgage Loan,
Wet-Ink Mortgage Loan, etc.)
6. the number of units for all Mortgaged Properties;
7. a code indicating whether the loan is an adjustable rate, fixed rate or
balloon Mortgage Loan;
8. a code indicating whether the loan is a FHA, VA or conventional Mortgage
Loan;
9. a code indicating the lien status of the Mortgage Loan;
10. the loan-to-value ratio at origination;
11. the combined loan-to-value ratio at origination, if applicable;
12. the Mortgage Interest Rate at the time of origination;
13. the loan approval/commitment date;
14. the original principal amount of the Mortgage Loan;
15. the Mortgage Loan purpose type (purchase or refinancing);
16. the Mortgagor's and Co-Mortgagor's FICO score;
17. Mortgagor Social Security Number; and
18. co-Mortgagor Social Security Number.
C-1
EXHIBIT D
OFFICER'S COMPLIANCE CERTIFICATE
I, , do hereby certify that I am duly
----------------------------
elected, qualified and authorized officer of First NLC Financial Services, LLC
and NLC, Inc. ("Sellers"). This Certificate is delivered to you in connection
with Section 17b of the Master Repurchase Agreement dated as of December 20,
2001, among Sellers and Credit Suisse First Boston Mortgage Capital LLC (the
"Agreement"). I hereby certify that, as of the date of the financial statements
attached hereto and as of the date hereof, each Seller 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) Adjusted Net Worth. For each quarter commencing after December 31,
2000, First NLC has maintained an Adjusted Net Worth of at least $5
million.
(ii) Indebtedness to Adjusted Net Worth Ratio. For each quarter
commencing after December 31, 2000, First NLC's ratio of consolidated
Indebtedness to consolidated Adjusted Net Worth has not exceeded 20:1.
(iv) Maintenance of Profitability. First NLC has not permitted, for
any Test Period, Net Income for such Test Period determined on a monthly
basis, before income taxes for such Test Period and distributions made
during such Test Period, to be less than $1.00.
(v) Each Seller or its Affiliates, has maintained, for such Seller and
its subsidiaries, 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 or an aggregate amount of at least $ . The actual
-------------------
amount of such coverage is $ .
-------------------
(vi) Each Seller has performed the documentation procedures required
by its operational guidelines with respect to endorsements and assignments,
including the recordation of assignments, or has verified that such
documentation procedures have been performed by a prior holder of such
Mortgage Loan.
(vii) Each Seller has observed or performed in all material respects
all of its covenants and other agreements, and satisfied every condition,
contained in the Agreement and the other Program Agreements to be observed,
performed and satisfied by it.
(viii) No Default or Event of Default has occurred or is continuing.
If any Default or Event of Default has occurred and is continuing, the
related Seller shall describe the same in reasonable detail and describe
the action such Seller has taken or proposes to take with respect thereto.
D-l
(ix) Attached hereto as Schedule 1 is a true and correct list of all
Mortgage Loans purchased by Buyer and held by Custodian pending repurchase.
D-2
IN WITNESS WHEREOF, I have set my hand this day of , .
------ ---------- ---------
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
D-3
[Schedule 1]
[to Officer's Certificate]
D-4
EXHIBIT E
FORM OF OPINION OF SELLER'S COUNSEL
,
---------- ----
Credit Suisse First Boston Mortgage Capital LLC
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to First NLC Financial Services, LLC and NLC, Inc. (the
"Sellers") in connection with the sale and repurchase by the Sellers of certain
loans (the "Mortgage Loans") purchased from time to time (each such date, a
"Purchase Date") by Credit Suisse First Boston Mortgage Capital LLC (the
"Buyer") pursuant to a Master Repurchase Agreement, dated as of December
[[ ]], 2001, among the Sellers and Buyer (the "Master Repurchase
Agreement"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Master Repurchase Agreement.
We have acted as counsel to the Sellers in connection with the preparation,
execution and delivery of, and the initial purchase of Mortgage Loans made
under, the Master Repurchase Agreement.
In connection with rendering this opinion, we have examined the following
documents and such other documents as we have deemed necessary or advisable:
a. The Program Agreements;
b. The organizational documents of the Sellers;
c. The certified Consents of the Officer of the Sellers relating to the
transactions provided for in the Program Agreements;
d. A copy of a UCC-1 financing statement relating to the Purchased Mortgage
Loans executed by the Sellers as debtor naming Buyer as secured party, which
UCC-1 financing Statement will be filed under the Uniform Commercial Code as in
effect in the States of Florida and Tennessee with the office of the Secretary
of the States of Florida and Tennessee (the "Filing Office") on or
about , 20 (the "Form UCC-1");
--------- -- --
e. The reports attached hereto as Exhibit A (the "Search Reports"), which set
forth the results of examination conducted by Federal Research Corporation of
all currently indexed UCC-1 financing statements naming the Company as debtor
that are on file in the Filing Office and the Office of the Secretary of the
State of Florida;
f. Good standing certificates, as of a recent date, for Seller from each of the
States listed on Schedule 1 attached hereto; and
E-1
g. The certificates, letters and opinions required to be furnished by Seller and
others in connection with the execution of the Program Agreements, and the
additional certificates, letter and documents delivered by or on behalf of such
parties concurrently herewith.
For purposes of the opinions expressed below, we have assumed the authenticity
of all documents submitted to us as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based solely upon the foregoing, we are of the opinion that:
1. First NLC Financial Services, LLC is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has the corporate power and authority to own its properties and
transact the business in which it is engaged. First NLC Financial Services, LLC
is duly qualified as a foreign [[ ]] to transact business in, and is in good
standing under, the laws of each state in which a mortgaged property is located
or is otherwise exempt under applicable law from such qualification. The
principal place of business of First NLC Financial Services, LLC is located at
000 X. Xxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxx Xxxxx, XX 00000.
2. NLC, Inc. is a corporation, duly organized, validly existing and in good
standing under the laws of the State of Tennessee, and has the corporate power
and authority to own its properties and transact the business in which it is
engaged. NLC, Inc. is duly qualified as a foreign [[ ]] to transact business
in, and is in good standing under, the laws of each state in which a mortgaged
property is located or is otherwise exempt under applicable law from such
qualification. The principal place of business of NLC, Inc. is located
at .
-----------------
3. Seller has the power to engage in the transactions contemplated by the
Program Agreements, and has all requisite power, authority and legal right to
execute and deliver the Program Agreements, to transfer and deliver the Mortgage
Loans and to perform and observe the terms and conditions of the Program
Agreements.
3. The Program Agreements have been duly and validly authorized, executed and
delivered by Seller and are valid, legal and binding agreements, enforceable
against Seller in accordance with their respective terms, subject to the effect
of bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the enforcement of creditors' rights generally, none of
which will materially interfere with the realization of the benefits provided
thereunder or with Buyer's ownership of the Mortgage Loans.
5. No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by either
Seller of, or compliance by such entity with, the Program Agreements, or the
transfer of the Mortgage Loans or the consummation of the transactions
contemplated by the Program Agreements.
6. Neither the transfer or delivery of the Mortgage Loans, nor the consummation
of any other of the transactions contemplated in the Program Agreements, nor the
fulfillment of the terms of the Program Agreements will result in a breach of or
constitutes or will constitute a default under (a) the charter or by-laws of
either of Seller, or the terms of any material indenture or other agreement or
instrument to which either Seller is a party or by which it is bound or to
E-2
which it is subject, (b) any contractual or legal restriction contained in any
indenture, mortgage, deed of trust, agreement, instrument or other similar
document to which Seller is a party or by which it is bound or to which it is
subject, or (c) any statute or order, rule, regulation, writ, injunction or
decree of any court, governmental authority or regulatory body to which either
Seller or any of its properties is subject or by which it is bound.
7. There are no actions, suits, proceedings or investigations pending or, to the
best of our knowledge, threatened against either Seller that, in our judgment,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of either Seller or in any material impairment of the right or ability of
either Seller to carry on its business substantially as now conducted or in any
material liability on the part of either Seller that would draw into question
the validity of the Program Agreements, or of any action taken or to be taken in
connection with the transactions contemplated thereby, or that would be likely
to impair materially the ability of either Seller to perform under the terms of,
the Program Agreements.
8. The conveyance of each Mortgage Loan as and in the manner contemplated by the
Program Agreements is sufficient fully to transfer to Buyer all right, title and
interest of either of Seller thereto as owner, noteholder and mortgagee.
9. The Repurchase Agreement is effective to create, in favor of Buyer, either a
valid sale of the Purchased Mortgage Loans to Buyer or a valid security interest
under the Uniform Commercial Code in all of the right, title and interest of
Seller in, to and under the Purchased Mortgage Loans as collateral security for
the payment of Seller's obligations under the Repurchase Agreement, except that
(a) such security interests will continue in Purchased Mortgage Loans 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 Purchased Mortgage
Loans in which Seller acquires rights after the commencement of a case under the
Bankruptcy Code in respect of Seller may be limited by Section 552 of the
Bankruptcy Code.
10. When the Mortgage Notes are delivered to the Custodian, endorsed in blank by
a duly authorized officer of Seller, the security interest referred to in
Section 9 above in the Mortgage Notes will constitute a fully perfected first
priority security interest in all right, title and interest of Seller therein.
11. (a) Upon the filing of financing statements on Form UCC-1 naming Buyer as
"Secured Party" and Seller as "Debtor", and describing the Purchased
Mortgage Loans, in the jurisdictions and recording offices listed on
Schedule 1 attached hereto, the security interests referred to in Section 9
above will constitute fully perfected security interests under the Uniform
Commercial Code in all right, title and interest of Seller in, to and under
such Purchased Mortgage Loans, which can be perfected by filing under the
Uniform Commercial Code.
(b) The UCC Search Report sets forth the proper filing offices and the
proper debtors necessary to identify those Persons who have on file in the
jurisdictions listed on Schedule 1 financing statements covering the
Purchased Mortgage Loans as of the dates and times specified on Schedule 2.
The UCC Search Report identifies no Person who has
E-3
filed in any Filing Office a financing statement describing the Repurchased
Assets prior to the effective dates of the UCC Search Report.
12. 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,
---------------------------------------
E-4
EXHIBIT F
UNDERWRITING GUIDELINES
See Tab 8
F-1
EXHIBIT G
AUTHORIZED SIGNATORIES
First NLC Financial Services, LLC NLC, Inc
----------------------------------------- ------------------------------------------
Xxxx Xxxxxxxx, President, CEO & Board Xxxx Xxxxxxxx, President, CEO & Board
of Managers of Managers
Xxxxxxx Xxxxxxxx, EVP, Asst. Secretary & Xxxxxxx Xxxxxxxx, EVP, Asst. Secretary &
Board of Managers Board of Managers
Xxxx Xxxxx, VP, Treasurer & Board of Xxxx Xxxxx, VP, Treasurer & Board of
Managers Managers
Xxxxxx Xxxxxx, VP, Secretary & Board of Xxxxxx Xxxxxx, VP, Secretary & Board of
Managers Managers
C. Xxxx Xxxxxxx, Executive Vice President
Xxxxxx Xxxxxxx, Senior Vice President
Xxxxx Xxxxxx, Vice President
Xxxxxx Xxxxxx, Vice President
Xxxxx Xxxxxxx, Accounting Manager
Xxxxxx Xxxxxx, Assistant Secretary
EXHIBIT H
CORPORATE RESOLUTIONS OF SELLER
Action of the Board of Directors
Without a Meeting Pursuant to
Section of
---------- -----------
The undersigned, being the directors of [ ], a [national]
--------------------
banking [association] [corporation] (the "Seller"), do hereby consent to the
taking of the following action without a meeting and do hereby adopt the
following resolutions by written consent pursuant to Section
-------------------
of of the State of :
----------------- -----------------
WHEREAS, it is in the best interests of the Seller to transfer from
time to time to Buyer Mortgage Loans against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such Mortgage Loans
at a date certain or on demand, against the transfer of funds by Seller pursuant
to the terms of the Repurchase Agreement (as defined below).
NOW, THEREFORE, be it
RESOLVED, that the execution, delivery and performance by the Seller
of the Master Repurchase Agreement (the "Repurchase Agreement") to be entered
into by the Seller and Credit Suisse First Boston Mortgage Capital LLC, as
Buyer, substantially in the form of the draft dated December 20, 2001, attached
hereto as Exhibit A, are hereby authorized and approved and that the [President]
or any [Vice President] (collectively, the "Authorized Officers") of the Seller
be and each of them hereby is authorized and directed to execute and deliver the
Repurchase Agreement to the Buyer with such changes as the officer executing the
same shall approve, his execution and delivery thereof to be conclusive evidence
of such approval;
RESOLVED, that the execution, delivery and performance by the Seller
of the Custodial Agreement (the "Custodial Agreement") to be entered into by the
Seller, the Buyer and LaSalle Bank, National Association, as custodian (the
"Custodian") substantially in the form of the draft dated December 20, 2001,
attached hereto as Exhibit B, are hereby authorized and approved and that the
Authorized Officers of the Seller be and each of them hereby is authorized and
directed to execute and deliver the Custodial Agreement to the Buyer and
Custodian with such changes as the officer executing the same shall approve, his
execution and delivery thereof to be conclusive evidence of such approval;
H-1
RESOLVED, that the Authorized Officers hereby are, and each hereby is,
authorized to execute and deliver all such aforementioned agreements on behalf
of the Seller and to do or cause to be done, in the name and on behalf of the
Seller, any and all such acts and things, and to execute, deliver and file in
the name and on behalf of the Seller, any and all such agreements, applications,
certificates, instructions, receipts and other documents and instruments, as
such Authorized Officer may deem necessary, advisable or appropriate in order to
carry out the purposes of the foregoing resolutions.
RESOLVED, that the proper officers, agents and counsel of the Seller
are, and each of such officers, agents and counsel is, hereby authorized for and
in the name and on behalf of the Seller to take all such further actions and to
execute and deliver all such other agreements, instruments and documents, and to
make all governmental filings, in the name and on behalf of the Seller and such
officers are authorized to pay such fees, taxes and expenses, as advisable in
order to fully carry out the intent and accomplish the purposes of the
resolutions heretofore adopted hereby.
Dated as of: , 200
----------- --- -
H-2
EXHIBIT I
SELLER'S TAX IDENTIFICATION NUMBER
First NLC, Financial Services, LLC: 00-0000000
NLC, Inc.: 00-0000000
I-1
EXHIBIT J
EXISTING INDEBTEDNESS
Household Bank, f.s.b.--$l5 million Warehouse Facility
Bank United--$25 million Warehouse Facility
RFC--$50 million Warehouse Facility
J-I
EXHIBIT K
WET INK PROCEDURES
Wet Funding Requirements:
Send e-mail to CSFB by 10:00 (EST) to notify of intent to fund.
Send excel data file(s) to CSFB by 3:00 (EST)
Original document file must be received by the custodian within 7 Business
days.
K-l
EXHIBIT L
FORM OF ESCROW INSTRUCTION LETTER TO BE PROVIDED BY BORROWER
BEFORE CLOSING
The escrow instruction letter (the "Escrow Instruction Letter") shall also
include the following instruction to the Settlement Agent (the "Escrow Agent"):
Credit Suisse First Boston Mortgage Capital LLC (the "Buyer"), has
agreed to provide funds ("Escrow Funds") to First NLC Financial Services, LLC
and NLC, Inc. to finance certain mortgage loans (the "Mortgage Loans") for which
you are acting as Escrow Agent.
You hereby agree that (a) you shall receive such Escrow Funds from
Buyer to be disbursed in connection with this Escrow Instruction Letter, (b) you
will hold such Escrow Funds in trust, without deduction, set-off or counterclaim
for the sole and exclusive benefit of Buyer until such Escrow Funds are fully
disbursed on behalf of Buyer in accordance with the instructions set forth
herein, and (c) you will disburse such Escrow Funds on the date specified for
closing (the "Closing Date") only after you have followed the Escrow Instruction
Letter's requirements with respect to the Mortgage Loans. In the event that the
Escrow Funds cannot be disbursed on the Closing Date in accordance with the
Escrow Instruction Letter, you agree to promptly remit the Escrow Funds to the
Custodian by re-routing via wire transfer the Escrow Funds in immediately
available funds, without deduction, set-off or counterclaim, back to the account
specified in Buyer's incoming wire transfer.
You further agree that, upon disbursement of the Escrow Funds, you
will hold all Mortgage Loan Documents specified in the Escrow Instruction Letter
in escrow as agent and bailee for Buyer, and will forward the Mortgage Loan
Documents and original Escrow Instruction Letter in connection with such
Mortgage Loans by overnight courier (y) to the Custodian within five (5)
Business Days following the date of origination.
You agree that all fees, charges and expenses regarding your services
to be performed pursuant to the Escrow Instruction Letter are to be paid by
Sellers or their borrowers, and Buyer shall have no liability with respect
thereto.
You represent, warrant and covenant that you are not an affiliate of
or otherwise controlled by either Seller, and that you are acting as an
independent contractor and not as an agent of either Seller.
The provisions of this Escrow Instruction Letter may not be modified,
amended or altered, except by written instrument, executed by the parties hereto
and Buyer. You understand that Buyer shall act in reliance upon the provisions
set forth in this Escrow Instruction Letter, and that Buyer is an intended third
party beneficiary hereof.
L-1
EXHIBIT M
CUSTODIAL AND BANK FEE SCHEDULE
Deposit/Review Fee $[*] per file
Deposit Fee includes balancing collateral to client electronic data, review to
Custodial Agreement.
Release/Reinstatement Fee $[*] per file
This fee applies to servicing releases and sales.
Cancelled Funding Fee $[*] per file
Overnight Courier Fee [*]
Release Rejection $[*] per reject
Photocopies $[*] per file pull fee
$[*] per page copied
Faxes $[*] per page + file pull fee
Endorsements $[*] per endorsement
Miscellaneous Expenses At Cost
Miscellaneous expenses include but are not limited to legal fees, postage,
overnight carrier services, supplies etc.
N-l
EXHIBIT N
FORM OF SERVICER NOTICE
December 20, 2001
[ ], as Servicer
--------------
[ADDRESS]
Attention:
---------------
Re: Master Repurchase Agreement, dated as of December 20, 2001 (the
"Repurchase Agreement"), by and between First NLC Financial
Services, LLC. (the "Seller"), NLC, Inc. ("Seller") and Credit
Suisse First Boston Mortgage Capital LLC (the "Buyer").
Ladies and Gentlemen:
[ ] (the "Servicer") is servicing certain mortgage loans for the
--------------
Sellers pursuant to that certain Servicing Agreement between the Servicer and
the Sellers. Pursuant to the Repurchase Agreement between Buyer and 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 either Seller, the Servicer may conclusively rely on any information or
Notice of Event of Default delivered by Buyer, and the 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.
N-l
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:
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000; Attention: Xx. Xxxx
Xxxxxxxxx and Ms. Xxxxx Xxxxxx; Telephone:; Facsimile:; with a copy to Eleven
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention: Legal Department;
Telephone:; Facsimile:.
Very truly yours,
FIRST NLC FINANCIAL SERVICES, LLC
By:
----------------------------------
Name:
Title:
ACKNOWLEDGED:
[ ],
--------------
as Servicer
By:
----------------------------------
Title:
Telephone:
Facsimile:
N-2
