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MASTER REPURCHASE AGREEMENT
By and Among:
DEUTSCHE BANK SECURITIES INC.,
GEMINI SECURITIZATION CORP., LLC
as Buyers,
DEUTSCHE BANK SECURITIES INC.,
as Agent for the Buyers,
and
MORTGAGEIT HOLDINGS, INC.,
as Seller
Dated as of May 12, 2006
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Table of Contents
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Page
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1. APPLICABILITY.............................................................1
2. DEFINITIONS AND INTERPRETATION............................................1
3. ENTERING INTO TRANSACTIONS................................................9
4. REPURCHASE OF PURCHASED SECURITIES.......................................10
5. PAYMENT AND TRANSFER.....................................................11
6. MARGIN MAINTENANCE.......................................................12
7. INCOME PAYMENTS..........................................................12
8. SECURITY INTEREST........................................................12
9. TAXES; TAX TREATMENT.....................................................13
10. CONDITIONS PRECEDENT.....................................................14
11. RELEASE OF PURCHASED SECURITIES..........................................17
12. RELIANCE.................................................................18
13. REPRESENTATIONS AND WARRANTIES...........................................18
14. COVENANTS OF SELLER......................................................20
15. REPURCHASE DATE PAYMENTS/COLLECTIONS.....................................24
16. CHANGE OF LAW............................................................24
17. SUBSTITUTION ............................................................25
18. REHYPOTHECATION OF PURCHASED SECURITIES..................................25
19. EVENTS OF DEFAULT........................................................26
20. REMEDIES.................................................................28
21. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE................................30
22. USE OF EMPLOYEE PLAN ASSETS..............................................30
23. INDEMNITY................................................................30
24. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS...............................32
25. REIMBURSEMENT............................................................32
26. FURTHER ASSURANCES.......................................................33
27. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION.................................33
28. TERMINATION..............................................................33
29. ASSIGNMENT; PARTICIPATIONS...............................................33
30. AMENDMENTS, ETC..........................................................34
31. SEVERABILITY.............................................................34
32. BINDING EFFECT; GOVERNING LAW............................................34
33. CONSENT TO JURISDICTION..................................................34
34. SINGLE AGREEMENT.........................................................35
35. INTENT...................................................................35
36. NOTICES AND OTHER COMMUNICATIONS.........................................35
37. CONFIDENTIALITY..........................................................36
38. RECORDING OF COMMUNICATIONS..............................................37
39. THE AGENT................................................................37
40. NO PROCEEDINGS...........................................................37
EXHIBITS
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EXHIBIT A MONTHLY CERTIFICATION
EXHIBIT B FORM OF TRANSACTION NOTICE
EXHIBIT C REPRESENTATIONS AND WARRANTIES RE: PURCHASED SECURITIES
EXHIBIT D FORM OF BOND POWER
EXHIBIT E FORM OF CONFIDENTIALITY AGREEMENT
EXHIBIT F FORM OF REQUEST FOR RELEASE
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Table of Contents
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(continued)
EXHIBIT G.........FORM OF TRANSMITTAL LETTER
EXHIBIT H.........FORM OF CERTIFICATE OF NON-FOREIGN STATUS
EXHIBIT I.........FORM OF INVESTMENT LETTER
EXHIBIT J.........FORM OF ERISA LETTER
SCHEDULES
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SCHEDULE 1........LEGAL PROCEEDINGS
SCHEDULE 2 .......LIST OF DELAWARE STATUTORY TRUSTS
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MASTER REPURCHASE AGREEMENT
Dated as of May 12, 2006
BY AND AMONG:
DEUTSCHE BANK SECURITIES INC. ("DBSI"), and GEMINI SECURITIZATION CORP., LLC
("Gemini" and collectively with DBSI, the "Buyers" and individually a "Buyer");
DEUTSCHE BANK SECURITIES INC., as agent pursuant hereto ("Agent"); and
MORTGAGEIT HOLDINGS, INC., as seller (the "Seller").
1. APPLICABILITY.
The parties may, from time to time in their sole, respective
discretion, upon the terms and conditions set forth herein, agree to enter into
transactions, in which Seller transfers to the Agent for the ratable benefit of
the Buyers, Purchased Securities against the transfer of funds by Buyers to
Seller, with a simultaneous agreement, as set forth in this Agreement, by Buyers
to cause the Agent to transfer to Seller such Purchased Securities at a date
certain, against the transfer of funds by Seller to the Agent for the ratable
benefit of the Buyers. Each such transaction shall be referred to herein as a
"Transaction", and, unless otherwise agreed in writing, shall be governed by
this Agreement.
2. DEFINITIONS AND INTERPRETATION.
(a) Defined Terms.
"Account Control Agreement" shall mean that Securities Account Control
Agreement dated as of May 12, 2006, among Seller, Agent and Deutsche Bank AG,
New York Branch, as the same may be amended, modified or supplemented from time
to time.
"Additional Purchased Securities" shall have the meaning assigned
thereto in Section 6(a) hereof.
"Adjusted Tangible Net Worth" means consolidated Net Worth less
goodwill, intangible assets and intercompany/interaffiliate receivables (each
calculated in accordance with GAAP).
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
equity, by contract or otherwise and the terms "controlling" and "controlled"
have meanings correlative to the meaning of "control".
"Agent" means, Deutsche Bank Securities Inc. or any successor thereto.
"Agreement" means this Master Repurchase Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
"Bankruptcy Code" means Section 101 et seq. of Title 11 of the United
States Code, as amended.
"Bond Power" means the bond power duly executed and delivered by Seller
to Buyers together with a Purchased Security substantially in the form attached
hereto as Exhibit D.
"Book-Entry Securities" shall have the meaning assigned to such term in
Section 8(a) hereof.
"Business Day" means any day other than (i) a Saturday or Sunday or
(ii) a day upon which the New York Stock Exchange or the Federal Reserve Bank of
New York is obligated by law or executive order to be closed.
"Buyers' Margin Amount" means, with respect to any Transaction as of
any date of determination, the amount obtained by application of Buyers' Margin
Percentage to the Repurchase Price for such Transaction as of such date.
"Buyers' Margin Percentage" means, with respect to any Transaction as
of any date of determination, a percentage equal to the decimal equivalent of 1
divided by the Pricing Percentage. By way of example only, the Buyers' Margin
Percentage would be 125% if the Pricing Percentage equaled 80% (1/0.0080=125).
"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.
"Cash Equivalents" shall mean any of the following: (a) marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one year from the
date of acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of six months or less from
the date of acquisition issued by any commercial bank organized under the laws
of the United States or any state thereof having combined capital and surplus of
not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1
by S&P or P-1 by Xxxxx'x Investors Service, Inc. ("Moody's"), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d)
repurchase obligations of any commercial bank satisfying the requirements of
clause (b) of this definition, having a term of not more than 30 days, with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
commercial bank satisfying the requirements of clause (b) of this definition; or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.
"Certificate Paying Agent" shall mean, with respect to a Purchased
Security, the Certificate Paying Agent designated as such in the related
Governing Agreements.
"Certificate Registrar" shall mean, with respect to a Purchased
Security, the Certificate Registrar designated as such in the related Governing
Agreements.
"Change in Control" shall mean the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange
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Commission under the Securities Exchange Act of 1934) of outstanding shares of
voting stock of Seller at any time if after giving effect to such acquisition
such Person or Persons owns fifty percent (50%) or more of such outstanding
voting stock.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by Buyers (or any Affiliate
of Buyers) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercial Paper Notes" shall mean the short-term promissory notes
issued by Gemini having an original term to maturity of 270 days or less
(including the date of issuance thereof).
"Confirmed Transaction Notice" shall have the meaning assigned thereto
in Section 3(b) hereof.
"Default" means any event, occurrence, condition or circumstance that,
with the giving of notice or passage of time, or both, would constitute an Event
of Default.
"Default Rate" means, as of any date of determination, the lesser of
(i) the Pricing Rate plus 2% and (ii) the maximum rate permitted by applicable
law. The Default Rate is calculated on the basis of a 360-day year and the
actual number of days elapsed between the date of Default and the date of
determination.
"Delaware Statutory Trust" means a statutory owner trust organized in
the State of Delaware, sponsored by the Seller and set forth on Schedule 2
attached hereto, which Schedule shall be updated from time to time by Seller to
reflect all statutory owner trusts that are issuers of Purchased Securities.
"DTC" means the Depository Trust Company, New York, New York, a limited
purpose trust company organized under the Banking Law of the State of New York,
and its nominee companies.
"Effective Date" means the date set forth on the top of the first page
of this Agreement.
"Eligible Security" means a Mortgage-Backed Residual Security approved
by Buyers in their sole discretion.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" means any entity, trade or business (whether or not
incorporated) that is a member of a group of which Seller is a member and that
is treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code or, solely for purposes of Section 412 of the Code, that is treated as a
single employer under Section 414 of the Code.
"Event of Default" shall have the meaning assigned thereto in Section
19 hereof.
"Foreign Buyer" shall have the meaning assigned to such term in Section
9(d) hereof.
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.
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"Governing Agreements" means, with respect to any Purchased Security, a
copy of the final, executed pooling and servicing agreement, trust agreement,
indenture and any other document, agreement or instrument entered into in
connection with the issuance of such Purchased Security, as each such document
may be amended from time to time in accordance with their terms
"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 of or pertaining
to government.
"Guarantee" means, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person.
"Income" means, with respect to any Purchased Security at any time, any
principal thereof and all interest, dividends or other distributions thereon.
"Indebtedness" means, with respect to any Person, (a) all 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) all 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) all 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) all obligations of such Person under repurchase agreements,
sale/buy-back agreements or like arrangements; (g) all 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; (i)
all Indebtedness of general partnerships of which such Person is a general
partner; and (i) any other contingent liabilities of such Person; provided that
Indebtedness shall not include any non-recourse Indebtedness of such Person.
"Indenture Trustee" shall mean, with respect to a Purchased Security,
the Indenture Trustee designated as such in the related Governing Agreements.
"Interest Rate Protection Agreement" means any interest rate protection
agreement or other interest hedging arrangement.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, including all rules and regulations promulgated thereunder.
"IRS" shall have the meaning assigned to such term in Section 9(d)
hereof.
"Issuer" shall mean, with respect to a Purchased Security, the Issuer
designated as such in the related Governing Agreements.
"LIBOR" means the rate determined daily by Agent on the basis of the
offered rate for one-month U.S. dollar deposits, as such rate appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on such date (rounded up to
the nearest whole multiple of 1/16%); provided that if such rate does not appear
on
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Telerate Page 3750, the rate for such date will be the rate determined by
reference to such other comparable publicly available service publishing such
rates as may be selected by Agent in its sole discretion and communicated to
Seller.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement executed by or on behalf of the debtor named therein
under the Uniform Commercial Code or comparable law of any jurisdiction.
"Margin Account" shall mean that certain "securities account" (as such
term is defined in Section 8-501(a) of the Uniform Commercial Code) established
pursuant to the Account Control Agreement.
"Margin Call" shall have the meaning assigned to such term in Section
6(a) hereof.
"Margin Deficit" shall have the meaning assigned thereto in Section
6(a) hereof.
"Market Value" means (i) with respect to any Purchased Security which
is an Eligible Security as of any date of determination, the market price as
determined by Buyers in their sole, good faith discretion, as marked to market
daily and (ii) with regard to any Purchased Security which is not an Eligible
Security, zero.
"Material Adverse Change" means, with respect to a Person, any material
adverse change in the business, condition (financial or otherwise), operations,
performance, properties or prospects taken as a whole of such Person.
"Material Adverse Effect" means (a) a Material Adverse Change with
respect to Seller and its Affiliates, taken as a whole, (b) a material
impairment of the ability of Seller or any Affiliate thereof that is a party to
any Program Document to perform under any Program Document and to avoid any
Event of Default; (c) a material adverse effect upon the legality, validity,
binding effect or enforceability of any Program Document against Seller or any
Affiliate that is a party to any Program Document; or (d) a material adverse
effect upon the marketability of a material portion of the Purchased Securities.
"Mortgage-Backed Residual Security" means any one or more owner trust
certificates issued by one or more Delaware Statutory Trusts, which certificates
represent a residual interest in or an ownership interest in, or a debt
obligation of, a Person which owns, directly or indirectly, a pool of mortgages,
deeds of trusts or other instruments creating a lien on Property which is
improved by a completed single family residence, including but not limited to a
condominium, planned unit development, townhouse or co-op.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which Seller or any ERISA Affiliate has any liability or
obligation, or has within any of the preceding five plan years had any liability
or obligation whether contingent or otherwise.
"Net Worth" shall mean, at any time, the excess of Seller's total
assets, over Seller's total liabilities, determined in accordance with GAAP.
"1934 Act" means the Securities Exchange Act of 1934, 15 USC xx.xx.
78a, et. seq., as amended.
"Obligations" means (a) all of Seller's obligation to pay the
Repurchase Price on the Repurchase Date, and other obligations and liabilities
of Seller to Buyers or their Affiliates arising under, or in
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connection with, the Program Documents, whether now existing or hereafter
arising; (b) any and all sums paid by Buyers or on behalf of Buyers pursuant to
the Program Documents in order to preserve any Purchased Security or its
interest therein; (c) in the event of any proceeding for the collection or
enforcement of any of Seller's indebtedness, obligations or liabilities referred
to in clause (a), the reasonable, out-of-pocket expenses of retaking, holding,
collecting, preparing for sale, selling or otherwise disposing of or realizing
on any Purchased Security, or of any exercise by Buyers or such Affiliate of
their or its rights under the related agreements, including without limitation,
reasonable attorneys' fees and disbursements and court costs, and (d) all of
Seller's indemnity obligations to Buyers pursuant to the Program Documents.
"Paying Agent" shall mean, with respect to a Purchased Security, the
Paying Agent designated as such in the related Governing Agreements.
"Person" means any legal person, including any individual, corporation,
partnership, association, joint-stock company, trust, limited liability company,
unincorporated organization, governmental entity or other entity of similar
nature.
"Plan" means any pension plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code which is
maintained for employees of Seller or any ERISA Affiliate or as to which Seller
or any ERISA Affiliate has or may have an obligation or liability, whether
direct or indirect.
"Price Differential" means, with respect to each Transaction as of any
date of determination, the aggregate amount obtained by daily application of the
Pricing Rate (or during the continuation of an Event of Default, by daily
application of the Default Rate) for such Transaction to the Purchase Price for
such Transaction on a 360-day-per-year basis for the actual number of days
elapsed during the period commencing on (and including) the Purchase Date and
ending on (but excluding) the related Repurchase Date (reduced by any amount of
such Price Differential in respect of such period previously paid by Seller to
Buyers) with respect to such Transaction.
"Pricing Percentage" means the purchase price percentage as set forth
in the related Confirmed Transaction Notice.
"Pricing Rate" means the per annum percentage rate for determination of
the Price Differential as set forth in the related Confirmed Transaction Notice.
"Prime Rate" means the daily prime loan rate as reported in The Wall
Street Journal or if more than one rate is published, the highest of such rates.
"Program Documents" means this Agreement, the Account Control Agreement
and any other agreement entered into by Seller, on the one hand, and Buyers or
any of their Affiliates on the other, in connection herewith or therewith.
"Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Purchase Date" means the date on which Purchased Securities are to be
transferred by Seller to Buyers.
"Purchase Price" means the price at which Purchased Securities are
transferred by Seller to Buyers in a Transaction, which shall (unless otherwise
agreed) be equal to the Pricing Percentage times
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the Market Value of the related Purchased Securities; provided that, unless
Seller pays down the Repurchase Price for any Purchased Securities in advance of
the applicable Repurchase Date pursuant to Section 4(h) below or the Purchased
Securities are otherwise repurchased in full, the Purchase Price for any
Purchased Securities shall be the Purchase Price attributed to such Purchased
Securities on the initial Purchase Date.
"Purchased Securities" means, with respect to a Transaction, the
related securities, together with the related Records and other Purchased Items,
and such other property, rights, titles or interests as are specified on a
related Transaction Notice. The term "Purchased Securities" with respect to any
Transaction at any time also shall include Additional Purchased Securities
delivered pursuant to Section 6(a) hereof.
"Purchased Items" shall have the meaning assigned thereto in Section 8
hereof.
"Records" means all instruments, agreements and other books, records,
and reports and data generated by other media for the storage of information
maintained by Seller or any other person or entity on behalf of Seller with
respect to a Purchased Security. Records shall include the certificates with
respect to any Purchased Security and any other instruments necessary to
document or service a Purchased Security.
"Relevant System" means (a) The Depository Trust Corporation in New
York, New York, or (b) such other clearing organization or book-entry system as
is designated in writing by Buyers.
"Repurchase Date", with respect to Purchased Securities, shall mean the
earliest of: (a) with respect to the initial Purchase Date and each subsequent
Purchase Date, the 15th day of the following month, (b) the date determined by
application of Section 20 hereof, or (c) such other Business Day as the Agent
shall specify in a notice delivered to Seller within a reasonable time prior to
such specified Business Day).
"Repurchase Price" means the price at which Purchased Securities are to
be transferred from the applicable Buyer to Seller upon termination of a
Transaction, which will be determined in each case (including Transactions
terminable upon demand) as the sum of the Purchase Price and the Price
Differential as of the date of such determination.
"Request for Release" shall mean a notice to the Buyers in the form of
Exhibit F hereto that certain of the Purchased Securities are being repurchased
by Seller or sold to a third party purchaser.
"Requirement of Law" means as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" means, with respect to Seller, any President,
Executive Vice President, Senior Vice President, Assistant Vice President,
Treasury, Secretary or Assistant Secretary of the Seller.
"Roll" shall have the meaning assigned to such term in Section 4(b)
hereof.
"Roll Date" shall have the meaning assigned to such term in Section
4(b) hereof.
"Securities Administrator" shall mean, with respect to a Purchased
Security, the Securities Administrator designated as such in the related
Governing Agreements.
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"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Substitute Securities" has the meaning assigned to such term in
Section 17(a) hereof.
"Taxes" shall have the meaning assigned to such term in Section 9(a)
hereof.
"Termination Date" has the meaning assigned thereto in Section 28.
"Transaction" has the meaning assigned thereto in Section 1.
"Transaction Notice" means a written request of Seller to enter into a
Transaction, in the form attached as Exhibit B hereto, which is delivered to
Buyers.
"Transmittal Letter" shall mean a letter substantially in the form of
Exhibit G hereto
"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.
"Unrestricted Cash" means cash and Cash Equivalents, of the Seller that
are not subject to a lien in favor of any Person or that are not required to be
maintained by the Seller pursuant to a contractual agreement (other than this
Agreement) or requirement of law.
(b) Interpretation.
Headings are for convenience only and do not affect interpretation. The
following rules of this subsection (b) apply unless the context requires
otherwise. The singular includes the plural and conversely. A gender includes
all genders. Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit
is, unless otherwise specified, a reference to a Section of, or annex or exhibit
to, this Agreement. A reference to a party to this Agreement or another
agreement or document includes the party's successors and permitted substitutes
or assigns. A reference to an agreement or document is to the agreement or
document as amended, modified, novated, supplemented or replaced, except to the
extent prohibited by any Program Document. A reference to legislation or to a
provision of legislation includes a modification or re-enactment of it, a
legislative provision substituted for it and a regulation or statutory
instrument issued under it. A reference to writing includes a facsimile
transmission and any means of reproducing words in a tangible and permanently
visible form. A reference to conduct includes, without limitation, an omission,
statement or undertaking, whether or not in writing. An Event of Default
subsists until it has been waived in writing by the Agent on behalf of the
Buyers. The words "hereof", "herein", "hereunder" and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement.
The term "including" is not limiting and means "including without limitation."
In the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including"; the words "to" and "until"
each mean "to but excluding", and the word "through" means "to and including."
This Agreement may use several different limitations, tests or measurements to
regulate the same or
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similar matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with their terms. Unless the context
otherwise clearly requires, all accounting terms not expressly defined herein
shall be construed, and all financial computations required under this Agreement
shall be made, in accordance with GAAP, consistently applied. References herein
to "fiscal year" and "fiscal quarter" refer to such fiscal periods of Seller.
Except where otherwise provided in this Agreement any determination,
statement or certificate by a Buyer or an authorized officer of a Buyer provided
for in this Agreement is conclusive and binds the parties in the absence of
manifest error. A reference to an agreement includes a security interest,
guarantee, agreement or legally enforceable arrangement whether or not in
writing.
A reference to a document includes an agreement (as so defined) in
writing or a certificate, notice, instrument or document, or any information
recorded in computer disk form. Where Seller is required to provide any document
to Buyers under the terms of this Agreement, the relevant document shall be
provided in writing or printed form to the Agent unless the Agent requests
otherwise. At the request of the Agent, the document shall be provided in
computer disk form or both printed and computer disk form.
This Agreement is the result of negotiations between and has been
reviewed by counsel to Buyers and Seller, and is the product of both parties. In
the interpretation of this Agreement, no rule of construction shall apply to
disadvantage one party on the ground that such party proposed or was involved in
the preparation of any particular provision of this Agreement or this Agreement
itself. Except where otherwise expressly stated Buyers may give or withhold, or
give conditionally, approvals and consents, may be satisfied or unsatisfied, and
may form opinions and make determinations at their absolute discretion. Any
requirement of good faith or judgment by Buyers shall not be construed to
require Buyers to request or await receipt of information or documentation not
immediately available from or with respect to Seller, a servicer of the
Purchased Securities, any other Person or the Purchased Securities themselves.
3. ENTERING INTO TRANSACTIONS.
(a) Unless otherwise agreed, Seller shall provide the Agent with
written notice of any proposed Purchase Date prior to 11:00 a.m. (New York time)
one (1) Business Day preceding such Purchase Date (the date on which such notice
is given, the "Notice Date"). On the Notice Date, Seller shall request that
Buyers enter into a Transaction by furnishing a Transaction Notice to the Agent,
which Transaction Notice shall specify the specific terms for such Transaction,
including the Purchase Price, the Pricing Rate and the Repurchase Date in
respect of such Transaction; provided that in no event shall the Repurchase Date
be more than thirty (30) days following the proposed Purchase Date.
(b) Unless otherwise agreed, upon receipt of the Transaction Notice,
the Buyers may, from time to time in their sole discretion, cause the Agent to
accept the Seller's offer to Seller on behalf of the Buyers by countersigning
the Transaction Notice and delivering the same to Seller by no later than 5:30
p.m. (New York time) on the Business Day prior to the requested Purchased Date
(a "Confirmed Transaction Notice"); provided, however, if Buyers decline to
accept the Seller's offer within such time, such Transaction Notice shall be
deemed to be rejected by Buyers and no transaction shall result therefrom unless
the Agent on behalf of the Buyers and Seller mutually agree otherwise. Each
Confirmed Transaction Notice shall be binding on the parties hereto unless
written notice of objection is given by the objecting party to the other party
by 12:00 p.m. on the related Purchase Date.
(c) Each Confirmed Transaction Notice, together with this Agreement,
shall constitute conclusive evidence of the terms agreed between Buyers and
Seller with respect to the Transaction to
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which the Confirmed Transaction Notice relates, and Seller's acceptance of the
related proceeds shall constitute Seller's agreement to the terms of such
Confirmed Transaction Notice. It is the intention of the parties that each
Confirmed Transaction Notice shall not be separate from this Agreement but shall
be made a part of this Agreement. In the event of any conflict between this
Agreement and a Confirmed Transaction Notice or between an initial Transaction
Notice and a subsequent Confirmed Transaction Notice, the terms of the Confirmed
Transaction Notice shall control with respect to the related Transaction.
4. REPURCHASE OF PURCHASED SECURITIES.
(a) Except as otherwise provided in Section 4(b), Seller shall
repurchase Purchased Securities from Buyers on each related Repurchase Date by
paying to the Agent the Repurchase Price. Such obligation to repurchase subsists
without regard to any prior or intervening liquidation or foreclosure with
respect to each Purchased Security (but liquidation or foreclosure proceeds
received by Buyers shall be applied to reduce the Repurchase Price except as
otherwise provided herein). Seller is obligated to obtain the Purchased
Securities from Buyers or their designee at Seller's expense on (or after) the
related Repurchase Date.
(b) Provided that the applicable conditions in Sections 10(a) and 10(b)
have been satisfied, each Purchased Security that is repurchased by Seller on
the related Repurchase Date shall automatically roll forward into a new
Transaction (each such forward roll, a "Roll") unless (i) Buyers' in their sole
discretion otherwise notifies Seller at least fifteen (15) calendar days prior
to such Repurchase Date (provided that no such notice shall be required if an
Event of Default shall have occurred and is continuing), or (ii) Seller
otherwise notifies the Agent at least three (3) Business Days prior to such
Repurchase Date, and in each such case, Seller shall remit to Buyer the entire
Repurchase Price for such Purchased Security. It is hereby understood that if a
Purchased Security shall Roll on a Repurchase Date (such date, a "Roll Date"),
such Roll Date will be the Purchase Date for the new Transaction, Seller will be
deemed to have remitted to Buyers the Repurchase Price and Buyers will be deemed
to have remitted to Seller the related Purchase Price. In such case, (x) Seller
shall only be obligated to remit the related Price Differential to Buyers in
cash on each related Roll Date, (y) the Repurchase Date for such new Transaction
shall reset, and (z) the Pricing Rate shall be equal to the amount set forth in
the related Confirmed Transaction Notice, or in the absence of a new Confirmed
Transaction Notice, the amount otherwise applicable to the most recently
terminated Transaction with respect to such Purchased Security.
(c) If, on any Roll Date, (i) Seller determines to repurchase one or
more (but not all) of the Purchased Securities subject to a Transaction pursuant
to this Section 4, Seller shall deliver to Agent, at least one (1) Business Day
prior to such Repurchase Date, a duly executed Request for Release which shall
be countersigned by Buyers, or (ii) Seller determines to arrange for the
repurchase by a third-party purchaser, Seller shall deliver to Agent at least
three (3) Business Days prior to such Repurchase Date a Request for Release and
shall deliver to such third-party purchaser (with a copy to Agent) a duly
executed Transmittal Letter. Any Repurchase Price shall be sent to the account
designated by the Buyers. Promptly upon receipt by Buyers of the full Repurchase
Price for the Purchased Securities being repurchased, Buyers shall, subject to
Section 11, release the related Purchased Securities to Seller or the third
party purchaser, as applicable. If some (but not all) of the Purchased
Securities are repurchased pursuant to this Section 4(c), Seller and Buyer shall
comply with the procedures set forth in Section 3 with respect to the remaining
Purchased Securities that will be subject to a Roll on such Roll Date and a new
Purchase Price shall be set for such Purchased Securities.
(d) Notwithstanding anything to the contrary herein, Buyers shall not
be obligated to release any Purchased Securities pursuant to Section 4 to Seller
or to any third party purchaser (i) to the extent
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that such action would result in the creation of a Margin Deficit, unless prior
thereto or simultaneously therewith Seller transfers to the Agent, for the
ratable benefit of the Buyers, cash or Additional Purchased Securities
sufficient to eliminate such Margin Deficit, or (ii) if a Default or an Event of
Default has occurred and is then continuing as of such Repurchase Date.
(e) If a Repurchase Date is later than the Termination Date, or any
final Repurchase Date set forth in the related Confirmed Transaction Notice with
respect to any Purchased Security, the Repurchase Date for such Transaction
shall automatically reset to the Termination Date or such final Repurchase Date,
as the case may be, and the provisions of this Section 4 as it might relate to a
new Transaction shall expire on such date.
(f) If Seller repurchases Purchased Securities on a day which is not a
Repurchase Date for such Purchased Securities, Seller shall indemnify Buyers and
hold Buyers harmless from any losses, costs and/or expenses which Buyers may
sustain or incur arising from the reemployment of funds obtained by Buyers
hereunder or from fees payable to terminate the deposits from which such funds
were obtained ("Breakage Costs"), in each case for the remainder of the
applicable 30-day period. Each Buyer shall deliver to Seller a statement setting
forth the amount and basis of determination of any Breakage Costs in such detail
as determined in good faith by such Buyer to be reasonably adequate, it being
agreed that such statement and the method of its calculation shall be adequate
and shall be conclusive and binding upon Seller, absent manifest error. The
provisions of this Section 3(f) shall survive termination of this Agreement and
the repurchase of all Purchased Securities subject to Transactions hereunder.
(g) Upon discovery by Seller of a breach of any of the representations
and warranties set forth on Exhibit C to this Agreement, Seller shall give
prompt written notice thereof to Agent. Upon any such discovery by Buyers,
Buyers will notify Seller. It is understood and agreed that the representations
and warranties set forth in Exhibit C to this Agreement with respect to the
Purchased Securities shall inure to the benefit of Buyers. The fact that Buyers
have conducted or have failed to conduct any partial or complete due diligence
investigation in connection with their purchase of any Purchased Security shall
not affect Buyers' right to demand repurchase as provided under this Agreement.
Seller shall, within five (5) Business Days of the earlier of Seller's discovery
or Seller receiving notice with respect to any Purchased Security of any breach
of a representation or warranty contained in Exhibit C of this Agreement,
promptly cure such breach or delivery failure in all material respects. If such
breach or delivery failure has not been remedied by Seller within such five (5)
Business Day period, Seller shall, at Buyers' option (i) promptly repurchase
such Purchased Security at a purchase price equal to the Repurchase Price for
such Purchased Security by wire transfer to the account designated by Buyers, or
(ii) transfer comparable Substitute Securities to Buyers as provided in Section
17 hereof.
(h) Subject to Section 4(f), Seller may at any time pay all or part of
the Repurchase Price for any Purchased Securities in advance of the applicable
Repurchase Date; provided that Seller shall only make partial payments in
increments of $3,000,000. Buyers shall apply any such payment to the outstanding
Repurchase Price for such Purchased Securities and shall reduce the Purchase
Price payable on the next succeeding Purchase Date by the amount of such
payment.
5. PAYMENT AND TRANSFER.
Unless otherwise agreed, all transfers of funds hereunder shall be in
immediately available funds and all Purchased Securities transferred shall be
transferred to the Agent for the ratable benefit of the Buyers. Any Repurchase
Price or Price Differential received by the Agent after 2:00 p.m. New York City
time shall be applied on the next succeeding Business Day.
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6. MARGIN MAINTENANCE.
(a) If at any time the aggregate Market Value of all Purchased
Securities subject to all Transactions is less than the aggregate Buyers' Margin
Amount for all such Transactions (a "Margin Deficit"), then the Agent on behalf
of the Buyers may by notice to Seller require Seller in such Transactions, at
Buyers' option, to transfer to the Agent for the ratable benefit of the Buyers
cash or additional Purchased Securities reasonably acceptable to the Agent
("Additional Purchased Securities"), so that the cash and aggregate Market Value
of such Purchased Securities, including any such Additional Purchased
Securities, will thereupon equal or exceed such aggregate Buyers' Margin Amount
(such requirement, a "Margin Call"); provided any cash or Cash Equivalents
transferred by Seller in satisfaction of any such Margin Call shall be deposited
into the Margin Account. If at any time the aggregate Market Value of all
Purchased Securities subject to all Transactions is greater than the aggregate
Buyer's Margin Amount for all such Transactions (a "Margin Excess"), then the
Agent shall, within a reasonable time, notify Seller the amount of such Margin
Excess and transfer to the Seller cash delivered by Seller to Agent in
satisfaction of a Margin Call (if any) in an amount sufficient to eliminate such
Margin Excess (a "Margin Excess Return"); provided that in no event shall any
Margin Excess Return exceed the amount of cash received by Agent in connection
with any Margin Call.
(b) Notice required pursuant to Section 6(a) may be given by any means.
Any notice given before 10:00 a.m. New York time on a Business Day shall be met,
and the related Margin Call satisfied, no later than 5:00 p.m. New York time on
such Business Day; notice given after 10:00 a.m. New York time on a Business Day
shall be met, and the related Margin Call satisfied, no later than 5:00 p.m. New
York time on the following Business Day. The failure of the Agent on behalf of
the Buyers, 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 the Agent to do so at a later date. Seller and
Buyers agree that a failure or delay by the Agent to exercise its rights
hereunder shall not limit or waive Buyers' rights under this Agreement or
otherwise existing by law or in any way create additional rights for Seller.
7. INCOME PAYMENTS.
Where a particular term of a Transaction extends over an Income payment
date on the Purchased Securities subject to that Transaction, all Income with
respect to such Purchased Securities shall be the property of Buyers. On each
Roll Date, Agent shall, for the ratable benefit of Buyers, apply such Income to
the Price Differential payable on such Roll Date and shall remit the remaining
Income, if any, to the Seller; provided that Agent shall not be obligated to
take any action pursuant to this Section 7, (i) to the extent that such action
would result in the creation of a Margin Deficit, unless prior thereto or
simultaneously therewith Seller transfers to the Agent, for the ratable benefit
of the Buyers, cash or Additional Purchased Securities sufficient to eliminate
such Margin Deficit, or (ii) if a Default or an Event of Default has occurred
and is then continuing as of such Repurchase Date.
8. SECURITY INTEREST.
(a) Seller, Agent and Buyers intend that the Transactions hereunder be
sales to Buyers of the Purchased Securities and not loans from Buyers to Seller
secured by the Purchased Securities. However, in order to preserve Buyers'
rights under this Agreement in the event that a court or other forum
recharacterizes the Transactions hereunder as other than sales, as security for
Seller's performance of all of its Obligations, Seller hereby grants Buyers a
fully perfected first priority security interest in the Purchased Securities,
the Margin Account, the Records, and all related Property, insurance, Income,
custodial accounts, escrow accounts (including any interest of Seller in escrow
accounts) and any other contract rights, payments, rights to payment (including
payments of interest or finance charges) general intangibles, all "securities
accounts" (as defined in Section 8-501(a) of the Uniform Commercial Code)
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to which the related securities are or may be credited, all "investment
property", "accounts" and "chattel paper" as defined in the Uniform Commercial
Code as in effect from time to time relating to or constituting any and all of
the foregoing, and other assets relating to the Purchased Securities (including,
without limitation, any other accounts) or any interest in the Purchased
Securities and any proceeds and distributions with respect to any of the
foregoing and any other property, rights, titles or interests as are specified
on a Transaction Notice (collectively, the "Purchased Items"). The parties
acknowledge and agree that the perfection of such security interest is intended
to be accomplished through possession of the related Purchased Securities by
Buyers or by any other Person on Buyers' behalf.
(b) The Buyers or their designee shall, as applicable, hold any
uncertificated, book-entry securities constituting Purchased Items (the
"Book-Entry Securities") through the facilities of a Relevant System, as
"securities intermediary" (as defined in Section 8-102(a)(14) of the Uniform
Commercial Code) and credit them to a "securities account" (as defined in
Section 8-501(a) of the Uniform Commercial Code) exclusively in the name of the
Agent on behalf of the Buyers. The Agent on behalf of the Buyers, as
"entitlement holder" (as defined in Section 8-102(a) of the Uniform Commercial
Code) with respect to any Book-Entry Securities, shall be entitled to receive
all cash dividends and distributions paid in respect thereof. Unless an Event of
Default shall have occurred and be continuing, Seller shall be entitled to
exercise all voting and corporate rights with respect to the Book-Entry
Securities, and the Agent shall exercise such rights on Seller's behalf during
the time in which the Agent is the registered holder of such Book-Entry
Securities, provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in Buyers' judgment, would impair the
Book-Entry Securities or which would be inconsistent with or result in any
violation of any provision of this Agreement.
(c) Upon the final termination of all outstanding Transactions and the
satisfaction of all Obligations due hereunder to Buyers, the Agent shall
register or cause to be registered in the name of Seller or its designee the
Book-Entry Securities.
9. TAXES; TAX TREATMENT.
(a) All payments made by the Seller under this Agreement shall be made
free and clear of, and without deduction or withholding for or on account of any
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities (including penalties, interest and additions to tax) with
respect thereto imposed by any Governmental Authority, excluding income taxes,
branch profits taxes, franchise taxes or any other tax imposed on the net income
by the United States, a state or a foreign jurisdiction under the laws of which
the Buyers are organized or of a Buyer's applicable lending office, or any
political subdivision thereof (collectively, "Taxes"), all of which shall be
paid by the Seller for its own account nor later than the date when due. If the
Seller is required by law or regulation to deduct or withhold any Taxes from or
in respect of any amount payable hereunder, it shall: (a) make such a deduction
or withholding; (b) pay the amount so deducted or withheld to the appropriate
Governmental Authority nor later than the sate when due; (c) deliver to the
Agent promptly, original tax receipts and other evidence satisfactory to the
Agent of the payment when due of the full amount of such Taxes; (d) pay to the
Agent for the ratable benefit of the Buyers such additional amount as may be
necessary so that Buyers receive, free and clear of all Taxes, a net amount
equal to the amount they would have received under this Agreement, as if no such
deduction or withholding has been made.
(b) In addition, the Seller agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies (including, without limitation, mortgage recording taxes, transfer taxes
and similar fees) imposed by the United States or any taxing authority thereof
or therein that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("Other Taxes").
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(c) The Seller agrees to indemnify the Buyers for the full amount of
Taxes (including additional amounts with respect thereto) and Other Taxes, and
the full amount of Taxes of any kind imposed by any jurisdiction on amounts
payable under this Section 9, and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, provided that the
Buyers shall have provided the Seller with evidence, reasonably satisfactory to
the Seller, of payment of Taxes or Other Taxes, as the case may be.
(d) Any Buyer that is not incorporated under the laws of the United
States, any State thereof, or the District of Columbia (a "Foreign Buyer") shall
provide the Seller with properly completed United States Internal Revenue
Service ("IRS") Form W-8BEN or W-8SCI or any successor from prescribed by the
IRS, certifying that such Foreign Buyer is entitled to benefits under an income
tax treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States on or prior to the date upon which each such
Foreign Buyer becomes a Buyer. Each Foreign Buyer will resubmit the appropriate
form on the earliest of (A) the third anniversary of the prior submission or (B)
on or before the expiration of thirty (30) days after there is a "change in
circumstances" with respect to such Foreign Buyer as defined in Treas. Reg.
Section 1.1441(e)(4)(ii)(D). For any period with respect to which a Foreign
Buyer has failed to provide the Seller with the appropriate form or other
relevant document pursuant to this Section 9(d) (unless such failure is due to a
change in treaty, law, or regulation occurring subsequent to the date on which a
form originally was required to be provided), such Foreign Buyer shall not be
entitled to any "gross up" of Taxes or indemnification under Section 9(c) with
respect to Taxes imposed by the United States; provided, however, that should a
Foreign Buyer, which is otherwise exempt from a withholding tax, become subject
to Taxes because of its failure to deliver a form required hereunder, the Seller
shall take such steps as such Foreign Buyer shall reasonably request to assist
such Foreign Buyer to recover such Taxes.
(e) Without prejudice to the survival or any other agreement of Seller
hereunder, the agreements and obligations of Seller contained in this Section 9
shall survive the termination of this Agreement. Nothing contained in this
Section 9 shall require any Buyer to make available any of its tax returns or
other information that it deems to be confidential or proprietary.
(f) Each party to this Agreement acknowledges that it is its intent for
purposes of U.S. federal, state and local income and franchise taxes to treat
each Transaction as indebtedness of Seller that is secured by the Purchased
Securities and that the Purchased Securities are owned by Seller in the absence
of an Event of Default by Seller. All parties to this Agreement agree to such
treatment and agree to take no action inconsistent with this treatment unless
required by law.
10. CONDITIONS PRECEDENT.
(a) As conditions precedent to the initial Transaction, Buyers shall
have received on or before the day of such initial Transaction the following, in
form and substance satisfactory to Buyers and duly executed by Seller and any
third party thereto:
(i) The Program Documents duly executed and delivered by the parties
thereto and being in full force and effect, free of any modification,
breach or waiver;
(ii) Evidence that all other actions necessary to perfect and protect
Buyers' interest in the Purchased Securities and other Purchased Items have
been taken, including, without limitation, duly executed and filed Uniform
Commercial Code financing statements on Form UCC-1;
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(iii) A certified copy of Seller's corporate resolutions approving the
Program Documents and Transactions thereunder (either specifically or by
general resolution), and all documents evidencing other necessary corporate
action or governmental approvals as may be required in connection with the
Program Documents;
(iv) An incumbency certificate of Seller's corporate secretary
certifying the names, true signatures and titles of Seller's
representatives duly authorized to request Transactions hereunder and to
execute the Program Documents and the other documents to be delivered
thereunder;
(v) Seller's unaudited balance sheets and consolidated statements of
income and retained earnings and of cash flows as of February 28, 2006, or
if not available, as of the most recent date after December 31, 2005;
(vi) The conditions set forth in Section 14(t) hereof shall have been
satisfied; and
(vii) An opinion of Seller's counsel as to such matters as Buyers may
reasonably request (including but not limited to: corporate matters as to
Seller, enforceability of the Program Documents, a "repurchase agreement"
opinion under the Bankruptcy Code, and an Investment Company Act opinion
with respect to Seller), each and in form and substance acceptable to
Buyers.
(b) The obligation of Buyers to enter into each Transaction pursuant to
this Agreement is subject to the following conditions precedent:
(i) Buyers or their designee shall have received on or before the day
of the initial Transaction with respect to the related Purchased Securities
(unless otherwise specified in this Agreement) the following, in form and
substance satisfactory to Buyers and (if applicable) duly executed:
(1) A Transaction Notice delivered pursuant to Section 3(a);
(2) The original, definitive certificate representing ownership
of such Purchased Securities in the name of Seller, together
with a duly executed Bond Power, or if such Purchased
Securities are Book-Entry Securities, the Buyers shall have
received satisfactory evidence that the records of the
Relevant System indicate that Buyers (or the Agent as agent
for the ratable benefit of the Buyers) are the beneficial
owner(s) of such Purchased Securities;
(3) A revised Schedule 2, if the related Delaware Statutory
Trust that is the issuer of such Purchased Securities is not
already set forth thereon;
(4) Each Governing Agreement with respect to such Purchased
Securities certified by Seller to be a true, correct and
complete copy; and
(5) Such certificates, opinions of counsel or other documents as
Buyers may reasonably request.
(ii) No Event of Default shall have occurred and be continuing.
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(iii) Buyers shall not have determined, in its reasonable discretion,
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
Buyers has made it unlawful, and no Governmental Authority shall have
asserted that it is unlawful, for Buyers to enter into Transactions with a
Pricing Rate based on LIBOR.
(iv) All representations and warranties in the Program Documents
hereof shall be true and correct in all material respects on the date of
such Transaction.
(v) No event or events shall have been reasonably determined by Buyers
to have occurred resulting in the effective absence of a "repo market" for
a period of at least two (2) consecutive days respecting loans or
mortgage-backed or asset-backed securities such that Buyers are or were
unable to finance or fund purchases under this Agreement through the "repo
market" or Buyers' customers.
(vi) There shall not have occurred and be continuing one or more
events that, in the reasonable judgment of Buyers, constitute(s) or should
reasonably be expected to constitute, a Material Adverse Effect.
(vii) In connection with any account to which the Purchased Securities
are credited or otherwise held, the Seller shall execute and deliver such
other and further documents or instruments necessary, in the reasonable
opinion of the Buyers, to effect and perfect a legally valid delivery of
the relevant interest granted therein to Buyers hereunder. Any account to
which the Purchased Securities are credited or otherwise shall be
designated as the Agent may direct.
(viii) Each secured party (including any party that has a
precautionary security interest in such Purchased Security) has released
all of its right, title and interest in, to and under such Purchased
Security (including, without limitation, any security interest that such
secured party or secured party's agent may have by virtue of its
possession, custody or control thereof) and has filed or has given Agent or
Seller authorization to file Uniform Commercial Code termination statements
in respect of any Uniform Commercial Code filings made in respect of such
Purchased Security, and each such release and Uniform Commercial Code
termination statement or authorization to release and file Uniform
Commercial Code termination statements has been delivered to the Buyers
prior to each Transaction.
(ix) Seller shall have delivered to the applicable Issuer, Indenture
Trustee, Securities Administrator and Paying Agent, with a copy to Buyers,
(i) written notice that from and after the related Purchase Date until such
time as such Buyer shall provide written notice to such Issuer, Indenture
Trustee, Securities Administrator and Paying Agent, with a copy to Seller,
that the Seller has repurchased such Purchased Securities, the related
Buyer is the Holder (as defined in the related Governing Agreements) of the
Purchased Securities that are the subject of such Transaction, and (ii)
written direction that for so long as the related Buyer is the Holder of
the Purchased Securities, until such time as such Buyer shall provide
written notice to such Issuer, Indenture Trustee, Securities Administrator
and Paying Agent, with a copy to Seller, that the Seller has repurchased
such Purchased Securities, all distributions on such Purchased Securities
required to be made under the terms of the related Governing Agreements
shall be made to such Buyer. All such notices and directions shall be in
form and substance acceptable to Buyers.
(x) Buyers shall have delivered to the applicable Certificate Paying
Agent (or such other Person designated by the related Governing Agreements)
for each Purchased Security subject to the Transaction an IRS Form W-9 and
the Certificate of Non-Foreign Status in the form
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attached hereto as Exhibit H (or such other form as may be required by the
related Governing Agreements).
(xi) Seller, as transferor of the Purchased Securities that are the
subject of such Transaction, and the applicable Buyer, as transferee of
such Purchased Securities shall have executed and delivered to the Buyers
an Investment Letter in the form attached hereto as Exhibit I (or such
other form as may be required by the related Governing Agreements) as to
each such Purchased Security, certifying that the applicable Buyer, as
transferee (a) is a "qualified institutional buyer" as defined under Rule
144A under the Securities Act of 1933, as amended (the "Act"), acting for
its own account or the accounts of other "qualified institutional buyers"
as defined under Rule 144A, and (b) is aware that Seller, as transferor,
intends to rely on the exemption from registration requirements under the
Act, provided by Rule 144A; provided that if the applicable Buyer cannot
make the certifications required by such Investment Letter, Buyers and
Seller shall comply with the alternative certification procedures set forth
in the related Governing Agreements; provided further that such Investment
Letter or other certification shall be held by Buyers in escrow until an
Event of Default has occurred and is continuing hereunder, at which time
Buyers shall deliver such Investment Letter or other certification to the
applicable Certificate Registrar or Depositor (or such other Person(s)
designated by the related Governing Agreements).
(xii) The transfer of the Purchased Securities that are the subject of
such Transaction to the applicable Buyer shall not constitute or result in
any prohibited transaction under ERISA or Section 4975 of the Code and
Buyers shall have delivered to the applicable Depositor, Owner Trustee and
Certificate Registrar and any other Person required by the applicable
Governing Agreements a certification in the form attached hereto as Exhibit
J (or such other form as may be required by the related Governing
Agreements) certifying that the applicable Buyer is not subject to ERISA.
(xiii) Seller's counsel shall have delivered to the applicable Owner
Trustee and Certificate Registrar (or such other Person(s) designated by
the related Governing Agreements) and Buyers a tax opinion with respect to
each Purchased Security that the Repurchase Agreement and the proposed
Transaction (including any disposition permitted following any Event of
Default hereunder) will not cause the related Issuer to be (i) treated as
an association taxable as a corporation for federal income tax and relevant
state income and franchise tax purposes, (ii) taxable as a taxable mortgage
pool as defined in Section 7701(i) of the Code or (iii) taxable as a
"publicly traded partnership" as defined in Treasury Regulation section
1.7704-1 for federal income tax purposes and relevant state franchise or
income tax purposes (or such other opinions as may be required by the
related Governing Agreements), which opinion shall meet the criteria of the
related Governing Agreements and shall be in form and substance acceptable
to Buyers.
11. RELEASE OF PURCHASED SECURITIES.
Upon timely payment in full of the Repurchase Price and all other
Obligations then owing with respect to a Purchased Security, if no Default or
Event of Default has occurred and is continuing, Buyers shall release such
Purchased Security unless such release would give rise to or perpetuate a Margin
Deficit. Except as set forth in Sections 6(a) and 17, Seller shall give at least
two (2) Business Days' prior written notice to Buyers if such repurchase shall
occur on other than a Repurchase Date.
If a Margin Deficit exists for any of the Transactions, Buyers shall
notify Seller of the amount thereof and Seller may thereupon satisfy the Margin
Call in the manner specified in Section 6.
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12. RELIANCE.
With respect to any Transaction, Buyers may conclusively rely upon, and
shall incur no liability to Seller in acting upon, any request or other
communication that Buyers reasonably believe to have been given or made by a
person authorized to enter into a Transaction on Seller's behalf, provided that
such person is listed on the certificate delivered pursuant to subsection
10(a)(iv) hereof, or a written update or supplement to such certificate is
delivered to Agent. In each such case, Seller hereby waives the right to dispute
Buyers' record of the terms of the Confirmed Transaction Notice, request or
other communication.
13. REPRESENTATIONS AND WARRANTIES.
Seller hereby represents and warrants, and shall on and as of the
Purchase Date for any Transaction and on and as of each date thereafter through
and including the related Repurchase Date be deemed to represent and warrant,
that:
(a) Due Organization and Qualification. Seller is duly organized,
validly existing and in good standing under the laws of the jurisdiction under
whose laws it is organized. Seller is duly qualified to do business, is in good
standing and has obtained all necessary licenses, permits, charters,
registrations and approvals necessary for the conduct of its business as
currently conducted and the performance of its obligations under the Program
Documents, except where failure to so qualify, be in good standing or to so
obtain would not be reasonably likely to have a Material Adverse Effect. No
Transactions require any Buyer to be licensed in any jurisdiction.
(b) Power and Authority. Seller has all necessary power and authority
to conduct its business as currently conducted and to execute, deliver and
perform its obligations under the Program Documents. Seller has all necessary
power and authority to consummate the Transactions.
(c) Due Authorization. The execution, delivery and performance of the
Program Documents by Seller has been duly authorized by all necessary action and
do not require any additional approvals or consents or other action by or any
notice to or filing with any Person other than any that have heretofore been
obtained, given or made.
(d) Noncontravention. None of the execution and delivery of the Program
Documents by Seller or the consummation of the Transactions and transactions
thereunder:
(i) conflicts with, breaches or violates any provision of the
organizational documents or material agreements of Seller or any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award currently in effect having applicability to Seller or its properties;
(ii) constitutes a material default by Seller under any loan or
repurchase agreement, mortgage, indenture or other agreement or instrument
to which Seller is a party or by which it or any of its properties is or
may be bound or affected; or
(iii) results in or requires the creation of any lien upon or in
respect of any of the assets of Seller except the lien relating to the
Program Documents.
(e) Legal Proceedings. There is no action, proceeding or investigation
by or before any court, governmental or administrative agency or arbitrator
affecting any of the Purchased Securities, Seller or any of its Affiliates,
pending or threatened, which, if decided adversely, would have a Material
Adverse
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Effect. All legal proceedings with respect to the Seller that are pending as of
the Effective Date with an amount in controversy in excess of $2,000,000 are set
forth on Schedule 1 attached hereto.
(f) Valid and Binding Obligations. Each of the Program Documents to
which Seller is a party, when executed and delivered by Seller, will constitute
the legal, valid and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and general equitable principles.
(g) Financial Statements. The financial statements of Seller, copies of
which have been furnished to Buyers, (i) are, as of the dates and for the
periods referred to therein, complete and correct in all material respects, (ii)
present fairly, in all material respects, the financial condition and results of
operations of Seller as of the dates and for the periods indicated and (iii)
have been prepared in accordance with GAAP consistently applied, except as noted
therein (subject as to interim statements to normal year-end adjustments). Since
the date of the most recent financial statements, there has been no Material
Adverse Change with respect to Seller. Except as disclosed in such financial
statements, Seller is not subject to any contingent liabilities or commitments
that, individually or in the aggregate, have a material possibility of causing a
Material Adverse Change with respect to Seller.
(h) Accuracy of Information. None of the documents or information
prepared by or on behalf of Seller and provided by Seller to Buyers relating to
Seller's financial condition contain any statement of a material fact with
respect to Seller or the Transactions that was untrue or misleading in any
material respect when made. Since the furnishing of such documents or
information, there has been no change, nor any development or event involving a
prospective change known to Seller that would render any of such documents or
information untrue or misleading in any material respect.
(i) No Consents. No consent, license, approval or authorization from,
or registration, filing or declaration with, any regulatory body, administrative
agency, or other governmental instrumentality, nor any material consent,
approval, waiver or notification of any creditor, lessor or other
nongovernmental person, is required in connection with the execution, delivery
and performance by Seller of this Agreement or the consummation by Seller of any
other Program Document, other than any that have heretofore been obtained, given
or made.
(j) Compliance With Law, Etc. No practice, procedure or policy employed
or proposed to be employed by Seller in the conduct of its businesses violates
any law, regulation, judgment, agreement, order or decree applicable to it
which, if enforced, would result in a Material Adverse Effect.
(k) Solvency: Fraudulent Conveyance. Seller is solvent and will not be
rendered insolvent by the Transaction and, after giving effect to such
Transaction, Seller will not be left with an unreasonably small amount of
capital with which to engage in its business. Seller does not intend to incur,
or believe that it has incurred, debts beyond its ability to pay such debts as
they mature. Seller is not contemplating the commencement of insolvency,
bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of
Seller or any of its assets. The amount of consideration being received by
Seller upon the sale of the Purchased Securities to Buyers constitutes
reasonably equivalent value and fair consideration for such Purchased
Securities. Seller is not transferring any Purchased Securities with any intent
to hinder, delay or defraud any of its creditors.
(l) Investment Company Act Compliance. Seller is not required to be
registered as an "investment company" as defined under the Investment Company
Act nor as an entity under the control of an "investment company" as defined
under the Investment Company Act.
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(m) Taxes. Seller has filed all federal and state tax returns which are
required to be filed and paid all taxes, including any assessments received by
it, to the extent that such taxes have become due (other than for taxes that are
being contested in good faith or for which it has established adequate
reserves). Any taxes, fees and other governmental charges payable by Seller in
connection with a Transaction and the execution and delivery of the Program
Documents have been paid.
(n) Additional Representations. With respect to each Purchased
Security, Seller hereby makes all of the representations and warranties set
forth in Exhibit C and in each Confirmed Transaction Notice to which such
Purchased Security is or has been subject, in each case as of the related
Purchase Date and continuously while such Purchased Security is subject to a
Transaction. Further, as of each Purchase Date, Seller shall be deemed to have
represented and warranted in like manner that Seller does not have any knowledge
that any such representation or warranty may have ceased to be true in a
material respect as of such date, except as otherwise stated in a Transaction
Notice; provided that if any representation or warranty has ceased to be true in
a material respect as of such date, Seller shall identify the related Purchased
Securities and the applicable representation or warranty and shall specify in
reasonable detail the related knowledge of Seller. Seller hereby acknowledges
that if the substance of any such representation or warranty ceases to be true
because of events occurring after the related Purchase Date or while such
Purchased Security is subject to a Transaction, the Market Value thereof could
be adversely affected.
(o) No Broker. Seller has not dealt with any broker, investment banker,
agent, or other person, except for Buyers, who may be entitled to any commission
or compensation in connection with the sale of Purchased Securities pursuant to
this Agreement; provided, that if Seller has dealt with any broker, investment
banker, agent, or other person, except for Buyers, who may be entitled to any
commission or compensation in connection with the sale of Purchased Securities
pursuant to this Agreement, such commission or compensation shall have been paid
in full by Seller.
(p) Financial Status. As of the Effective Date, Seller has (i)
Unrestricted Cash and Cash Equivalents, on a consolidated basis, of not less
than $5,000,000, and (ii) an Adjusted Tangible Net Worth, on a consolidated
basis, of not less than $250,000,000.
(q) Taxable Mortgage Pool. The related Delaware Statutory Trust is not
a taxable mortgage pool (as defined in Section 7701(i) of the Code) and, to the
knowledge of Seller, no Person has taken any action that would have a reasonable
likelihood of causing such Delaware Statutory Trust to become a taxable mortgage
pool.
The representations and warranties set forth in this Agreement shall
survive transfer of the Purchased Securities to Buyers and shall continue for so
long as the Purchased Securities are subject to this Agreement.
14. COVENANTS OF SELLER.
On and as of the date of this Agreement and each Purchase Date and
until this Agreement is no longer in force with respect to any Transaction,
Seller hereby covenants with Buyers as follows:
(a) Preservation of Existence; Compliance with Law. Seller shall:
(i) Preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises necessary for the operation of
its business (provided that nothing in this Section 14(a)(i) shall prohibit
any transaction expressly permitted under Section 14(o));
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(ii) Comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders, whether now in effect or
hereafter enacted or promulgated by any applicable Governmental Authority
(including, without limitation, all environmental laws), if failure to
comply with such requirements would be reasonably likely (either
individually or in the aggregate) to have a Material Adverse Effect; and
(iii) Maintain all licenses, permits or other approvals necessary for
Seller to conduct its business and to perform its obligations under the
Program Documents, and conduct its business strictly in accordance with
applicable law, except where failure to do so would not be reasonably
likely to have a Material Adverse Effect.
(b) Reserved.
(c) Notice of Proceedings or Adverse Change. Seller shall give notice
to the Agent promptly after a Responsible Officer of Seller has any knowledge
of:
(i) the occurrence of any Default or Event of Default or default or
breach by Seller of any obligation under any Program Document;
(ii) any material change in the insurance coverage required of Seller
pursuant to any Program Document, with copy of evidence of same attached;
(iii) (a) any default or event of default under any Indebtedness of
Seller with an aggregate outstanding principal amount in excess of
$15,000,000, (b) within ten (10) calendar days after service of process
with respect to the same, any litigation, investigation, regulatory action
or proceeding that is pending or threatened by or against Seller in any
federal or state court or before any Governmental Authority which, if not
cured or if adversely determined, would reasonably be expected to have a
Material Adverse Effect or constitute a Default or Event of Default, or (c)
any Material Adverse Effect with respect to Seller;
(iv) within ten (10) calendar days after service of process with
respect to the same, any litigation or proceeding that is pending or
threatened against (a) Seller in which the amount involved exceeds or is
reasonably likely to exceed $2,000,000 and is not covered by insurance, in
which injunctive or similar relief is sought, or which, would reasonably be
expected to have a Material Adverse Effect and (b) any litigation or
proceeding that is pending or threatened in connection with any Purchased
Items, which, if adversely determined, would reasonably be expected to have
a Material Adverse Effect;
(v) and, as soon as reasonably possible, notice of any of the
following events:
(1) any material change in accounting policies or financial
reporting practices of Seller;
(2) promptly upon receipt of notice or knowledge of any Lien or
security interest (other than security interests created
hereby) on, or claim asserted against, any of the Purchased
Items; and
(vi) any event, circumstance or condition that has resulted, or is
reasonably likely to result, in either a Material Adverse Change with
respect to Seller or a Material Adverse Effect with respect to Seller or a
material portion of the Purchased Securities.
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(d) Financial Reporting. The Seller shall maintain a system of
accounting established and administered in accordance with GAAP, and shall
clearly reflect therein the transfer of Purchased Securities to the Buyers. The
Seller shall furnish to the Agent:
(i) After the Seller is no longer subject to the reporting
requirements of the 1934 Act, within ninety (90) days after the close of
each fiscal year, the consolidated, audited balance sheets of Seller as of
the end of each fiscal year, and the audited financial statements of income
and changes in equity of Seller, and the audited statement of cash flows of
Seller, for such fiscal year, all in reasonable detail and accompanied by
an opinion of an accounting firm as to said financial statements;
(ii) After the Seller is no longer subject to the reporting
requirements of the 1934 Act, within forty-five (45) days after the close
of each of the Seller's first three fiscal quarters in each fiscal year
unaudited balance sheets and income statements, for the period from the
beginning of such fiscal year to the end of such fiscal year, subject,
however, to normal year-end adjustments, and certified by an executive
officer of Seller;
(iii) A monthly certification in the form of Exhibit A hereto, duly
executed by an executive officer of the Seller; and
(iv) Promptly, from time to time, such other information regarding the
business affairs, operations and financial condition of the Seller as the
Buyers may reasonably request.
For so long as Seller is subject to the reporting requirements of the
1934 Act, Seller shall have satisfied its obligations in this Section 14(d),
notwithstanding anything herein to the contrary, if Seller shall have provided
Agent access to an internet or intranet website from which such financial
information can be readily obtained utilizing a commonly used web browser to
print or download an electronic file stored in a commonly used file format
containing such form, document or certificate.
(e) Further Assurances. The Seller shall execute and deliver to the
Buyers all further documents, financing statements, agreements and instruments,
and take all further action that may be required under applicable law, or that
the Buyers may reasonably request, in order to effectuate the transactions
contemplated by this Agreement or, without limiting any of the foregoing, to
grant, preserve, protect and perfect the validity and first-priority of the
security interests created or intended to be created hereby. The Seller shall do
all things necessary to preserve the Purchased Items so that it remains subject
to a first priority perfected security interest hereunder. Without limiting the
foregoing, the Seller will comply with all rules, regulations, and other laws of
any Governmental Authority and cause the Purchased Items to comply with all
applicable rules, regulations and other laws. The Seller will not allow any
default for which the Seller is responsible to occur under any Purchased Items
document or any Program Document and the Seller shall fully perform or cause to
be performed when due all of its obligations under any Purchased Items document
or the Program Documents.
(f) True and Correct Information. All information, reports, exhibits,
schedules, financial statements or certificates of Seller or any of its
Subsidiaries or any of their officers furnished to Buyers hereunder and during
Buyers' diligence of Seller (when taken as a whole) are and will be true and
complete in all material respects and do not and will 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 Seller to Buyers pursuant to
any Program Document shall, except as otherwise specifically permitted herein,
be prepared in accordance with GAAP, to the extent applicable.
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(g) Financial Condition Covenants. Seller shall at all times maintain
(i) Unrestricted Cash and Cash Equivalents, on a consolidated basis, of at least
$5,000,000, and (ii) an Adjusted Tangible Net Worth, on a consolidated basis, of
not less than $250,000,000.
(h) Limitation on Distributions. Seller shall have the right to pay
dividends in the ordinary course and consistent with past practices and any
dividends or distributions required to maintain Seller's status as a REIT.
Seller shall have the right to pay any other dividends and distributions so long
as, immediately following such dividend or distribution, Seller remains in
compliance with the financial covenants set forth in Section 14(g) and Seller
has adequate capital with which to operate its business. Notwithstanding the
foregoing, if a Default or Event of Default has occurred and is occurring,
Seller shall not pay any dividends or distributions with respect to any capital
stock or other equity interests in Seller, 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 Seller, other than
dividends or distributions required to maintain Seller's status as a REIT.
(i) Books and Records. Seller shall, to the extent practicable,
maintain and implement administrative and operating procedures (including
without limitation, an ability to recreate records evidencing the Purchased
Items in the event of the destruction of the originals thereof), and keep and
maintain or obtain, as and when required, all documents, books, records and
other information reasonably necessary or advisable for the collection of all
the Purchased Items. Upon reasonable advance notice from the Agent, Seller shall
make any and all such Records available to the Agent 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 Seller shall permit
the Agent or their authorized agents to discuss the affairs, finances and
accounts of Seller with its chief operating officer and chief financial officer
and to discuss the affairs, finances and accounts of Seller with its independent
certified public accountants.
(j) Reserved.
(k) Material Change in Business. Seller shall not make any material
change in the line of its business as carried on at the date hereof.
(l) Assignment. Except as permitted herein, the Seller shall not 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 Documents), any of the Purchased
Securities or any interest therein, provided that this Section shall not prevent
any transfer of Purchased Securities in accordance with the Program Documents.
(m) Reserved.
(n) ERISA Matters. Seller shall not establish, maintain or contribute
to, any Plans or Multiemployer Plans.
(o) Consolidations, Mergers and Sales of Assets. Seller shall not, (i)
consolidate or merge with or into any other Person, (ii) sell, lease or
otherwise transfer all or substantially all of its assets to any other Person,
(iii) be subject to a Change in Control without prior written notice to Agent,
(iv) form or enter into any partnership, joint venture, syndicate or other
combination which would have a Material Adverse Effect; or (v) make any Material
Adverse Change with respect to Seller or Seller's Subsidiaries; provided that
Seller may merge or consolidate with and into a wholly-owned Subsidiary of
Seller or any other Person, if the Seller is the surviving corporation, and if,
after giving effect thereto, no Event of Default would exist hereunder.
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(p) Reports. The Seller shall promptly deliver to the Buyers (unless
received from the Buyers) (a) any report received by or required to be delivered
by the Seller pursuant to the Governing Agreements at the same time as required
thereunder; (b) any notice of transfer of servicing under the Governing
Agreements and (c) any other such document or information as may be reasonably
requested by the Buyers from time to time.
(q) Taxes.
(i) Seller shall timely pay and discharge or cause to be paid and
discharged, when due, all taxes, assessments and governmental charges or
levies imposed upon it or upon its income and profits or upon any of its
property, real, personal or mixed (including without limitation, the
Purchased Items) or upon any part thereof, as well as any other lawful
claims which, if unpaid, might become a Lien upon such properties or any
part thereof, in each case, except for any such taxes, assessments and
governmental charges or levies as are appropriately contested in good faith
by appropriate proceedings diligently conducted and with respect to which
adequate reserves are set aside.
(ii) Seller shall file on a timely basis all tax and information
returns, reports and any other information statements or schedules required
to be filed by or in respect of it in any applicable jurisdiction.
(r) Insurance. Seller will obtain and maintain insurance with
responsible companies in such amounts and against such risks as are customarily
carried by business entities engaged in similar businesses similarly situated,
and will furnish Buyers on request (but in any event no later than fifteen (15)
days following such request) the certificates or other documents evidencing
renewal of each such policy.
(s) Change of Fiscal Year. Seller will not at any time, directly or
indirectly, except upon ninety (90) days' prior written notice to Buyers, change
the date on which Seller's fiscal year begins from Seller's current fiscal year
beginning date.
(t) Margin Account. Prior to the initial Purchase Date, the Agent shall
establish the Margin Account for the benefit of the Buyers. The Seller shall
remit all cash and Cash Equivalents paid in satisfaction of a Margin Call
pursuant to Section 6(a) directly to the Margin Account. The Margin Account
shall be controlled by the Agent and the Seller shall have no rights thereto;
provided that the Seller shall be entitled to (i) any interest earned on the
amounts held in the Margin Account, and (ii) upon the satisfaction of all
Obligations owing to Buyers hereunder and the termination of this Agreement, all
amounts held in the Margin Account.
15. REPURCHASE DATE PAYMENTS/COLLECTIONS.
On each Repurchase Date, Seller shall remit or shall cause to be
remitted to Buyers the Repurchase Price together with any other Obligations then
due and payable.
16. CHANGE OF LAW.
(a) If Buyers determine that the introduction of, any change in, or the
interpretation or administration of any Requirement of Law has made it unlawful
or commercially impracticable to engage in any Transactions with a Pricing Rate
based on LIBOR, then Seller (i) shall, upon its receipt of notice of such fact
and demand from Buyers, repurchase the Purchased Securities subject to the
Transaction on the next succeeding Business Day and, at Seller's election,
concurrently enter into a new Transaction with Buyers with a Pricing Rate based
on the Prime Rate plus a margin and (ii) may elect, by giving notice to Buyers,
that all new
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Transactions shall have Pricing Rates based on the Prime Rate plus a margin. The
foregoing margins shall be solely determined and calculated by the Agent in good
faith.
(b) If a Buyer determines in its reasonable discretion that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Buyer's capital or on the capital of any Affiliate of
such Buyer as a consequence of such Change in Law on this Agreement, then from
time to xxxx Xxxxxx will compensate such Buyer or such Buyer's Affiliate, as
applicable, for such reduced rate of return suffered as a consequence of such
Change in Law. Such Buyer shall provide Seller with prompt notice as to any
Change in Law. Notwithstanding any other provisions in this Agreement, in the
event of any such Change in Law Seller will have the right to terminate all
Transactions then outstanding as of a date selected by Seller, which date shall
be prior to the then applicable Repurchase Date and which date shall thereafter
for all purposes hereof be deemed to be the Repurchase Date.
17. SUBSTITUTION.
(a) Seller may, subject to agreement with and acceptance by Buyers as
determined in Buyers' reasonable discretion, substitute other assets which are
substantially the same as the Purchased Securities (the "Substitute Securities")
for any Purchased Securities. Such substitution shall be made by transfer to the
Agent for the ratable benefit of the Buyers of such Substitute Securities and
transfer to Seller of such Purchased Securities. After substitution, the
Substitute Securities shall be deemed to be Purchased Securities.
(b) In the case of any Transaction for which the Repurchase Date is
other than the Business Day immediately following the Purchase Date and with
respect to which Seller does not have any existing right to substitute
Substitute Securities for the Purchased Securities, Seller shall have the right,
subject to the proviso to this sentence, upon notice to the Agent, which notice
shall be given at or prior to 10:00 a.m. (New York City time) on the second
preceding Business Day, to substitute Substitute Securities for any Purchased
Securities; provided, however, that the Agent may elect, by the close of
business on the Business Day following which such notice is received, or by the
close of the next Business Day if notice is given after 10:00 a.m. (New York
City time) on such day, not to accept such substitution. In the event such
substitution is accepted by the Agent, such substitution shall be made by
Seller's transfer to the Agent of such Substitute Securities and the transfer by
the Agent to Seller of such Purchased Securities, and after such substitution,
the Substitute Securities shall be deemed to be Purchased Securities. In the
event the Agent elects not to accept such substitution, the Agent shall offer
Seller the right to terminate the Transaction.
(c) In the event Seller exercises its right to substitute or terminate
under subsection (b), Seller shall be obligated to pay to the Agent for the
ratable benefit of the Buyers, by the close of the Business Day of such
substitution, as the case may be, an amount equal to (A) Buyers' actual cost in
bona fide third party transactions (including all fees, expenses and
commissions) of (i) entering into replacement transactions; (ii) entering into
or terminating hedge transactions; and/or (iii) terminating transactions or
substituting securities in like transactions with third parties in connection
with or as a result of such substitution or termination, and (B) to the extent
Buyers cannot reasonably enter into replacement transactions, the loss incurred
by Buyers directly arising or resulting from such substitution or termination.
The foregoing amounts shall be solely determined and calculated by Buyers in
good faith, and such determination shall be binding upon the parties, absent
manifest error.
18. REHYPOTHECATION OF PURCHASED SECURITIES.
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The Agent and the Buyers shall not pledge, hypothecate, assign,
transfer or otherwise convey the Purchased Securities prior to the occurrence
of an Event of Default hereunder.
19. EVENTS OF DEFAULT.
With respect to any Transactions covered by or related to this
Agreement, the occurrence of any of the following events shall constitute an
"Event of Default":
(a) Failure to transfer Purchased Securities. Seller fails to transfer
the Purchased Securities to Buyers on the applicable Purchase Date (provided
Buyers have tendered the related Purchase Price);
(b) Failure to repurchase Purchased Securities. Seller either fails to
repurchase the Purchased Securities on the applicable Repurchase Date or fails
to perform its obligations under Section 6 hereof;
(c) Immediate Covenant Default. Seller shall fail to perform, comply
with or observe any term, covenant or agreement applicable to Seller contained
in any of Sections 14(a)(i), (g), (h), (k), (l) or (o);
(d) Additional Covenant Defaults. Seller shall otherwise fail to comply
with any of the requirements of Section 14(a) (except Section 14(a)(i)) and such
default shall continue unremedied for a period of seven (7) Business Days; or
Seller shall fail to perform, observe or comply with any other covenant or
agreement contained in the Program Documents and such failure is not cured
within fifteen (15) Business Days;
(e) Representation and Warranty Breach. Any representation or warranty
made by Seller (or any of Seller's officers) in the Program Documents or in any
other document prepared by Seller pursuant thereto shall have been incorrect or
untrue in any material respect when made or repeated or deemed to have been made
or repeated (other than the representations or warranties in Exhibit C hereto
which shall be considered solely for the purpose of determining the Market Value
with respect to such Purchased Security, unless Seller shall have made any such
representations or warranties with the knowledge that they were materially false
or misleading at the time made or repeated or deemed to have been made or
repeated);
(f) Appointment of Custodian or Similar Official or Occurrence of Other
Insolvency Events. A custodian, receiver, conservator, liquidator, trustee,
sequestrator or similar official for Seller or any of its Subsidiaries, or of
any of Seller's or any of its Subsidiaries' Property, is appointed or takes
possession of such Property; or Seller or any of its Subsidiaries generally
fails to pay Seller's or any of its Subsidiaries' debts as they become due, as
applicable, or Seller or any of its Subsidiaries is adjudicated bankrupt or
insolvent; or an order for relief is entered under the Federal Bankruptcy Code,
or any successor or similar applicable statute, or any administrative insolvency
scheme, against Seller or any of its Subsidiaries; or any of Seller's or any of
its Subsidiaries' Property is sequestered by court or administrative order; or a
petition is filed against Seller or any of its Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, moratorium, delinquency or liquidation law of any jurisdiction,
whether now or subsequently in effect; provided that, if any event described in
this subsection (f) is not voluntarily caused or consented to by Seller or an
applicable Subsidiary a 30-day cure period shall be applicable to stay or
discharge such event;
(g) Filing of Bankruptcy or Similar Proceedings. Seller or any of its
Subsidiaries files a voluntary petition in bankruptcy, seeks relief under any
provision of any bankruptcy, reorganization, moratorium, delinquency,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law
-26-
of any jurisdiction whether now or subsequently in effect; or consents to the
filing of any petition against it under any such law; or consents to the
appointment of or taking possession by a custodian, receiver, conservator,
trustee, liquidator, sequestrator or similar official for Seller or any of its
Subsidiaries, or of all or any part of Seller's Property; or makes an assignment
for the benefit of Seller's or any of its Subsidiaries' creditors;
(h) Judgments. A final judgment or judgments for the payment of money
in excess of $5,000,000 in the aggregate (which is not insured) shall be
rendered against Seller or any of its Subsidiaries by one or more courts,
administrative tribunals or other bodies having jurisdiction and the same shall
not be satisfied, discharged (or provision shall not be made for such discharge)
or bonded, or a stay of execution thereof shall not be procured, within 30 days
from the date of entry thereof, and Seller or any of its Subsidiaries shall not,
within said period of 30 days, or such longer period during which execution of
the same shall have been stayed or bonded, appeal therefrom and cause the
execution thereof to be stayed during such appeal;
(i) Condemnation or Other Governmental 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 Seller or any of its Subsidiaries, or shall have taken any
action to displace the management of Seller or any of its Subsidiaries or to
curtail its authority in the conduct of the business of Seller, or takes any
action in the nature of enforcement to remove, limit or restrict the approval of
Seller or any of its Subsidiaries, as an issuer, buyer or a seller/servicer of
the Purchased Securities or similar securities, and such action provided for in
this subsection (i) shall not have been discontinued or stayed within 30 days;
(j) Cross-Default. Seller or any of its Subsidiaries shall be in
default under (i) any Indebtedness or Interest Rate Protection Agreement between
Seller or any of its Subsidiaries, on the one hand, and any Buyer or any of
Buyers' Affiliates, on the other hand, or (ii) any Indebtedness of Seller or any
of its Subsidiaries which default (1) involves the failure to pay a matured
obligation in an amount in excess of $15,000,000, or (2) permits the
acceleration of the maturity of obligations by any other party to or beneficiary
with respect to such Indebtedness;
(k) Material Adverse Change. Any Material Adverse Change shall have
occurred with respect to Seller, in each case as determined by Buyers in their
sole good faith discretion; or any other condition shall exist which, in Buyers'
sole good faith discretion, constitutes an impairment of Seller's ability to
perform any of its material obligations under any Program Document;
(l) Inability to Perform, or Repudiation of, Obligations. Seller shall
admit in writing its inability to, or intention not to, perform any of Seller's
Obligations.
(m) Liens. Seller shall grant, or suffer to exist, any Lien on any
Purchased Items (except the Lien in favor of Buyers), or this Agreement shall
for any reason cease to create a valid, first priority security interest in any
material portion of the Purchased Securities or Purchased Items purported to be
covered hereby;
(n) Enforceability. For any reason, this Agreement at any time shall
not be in full force and effect in all material respects or shall not be
enforceable in all material respects in accordance with its terms, or any Lien
granted pursuant thereto shall fail to be perfected and of first priority, or
any Person (other than Buyers) shall contest the validity, enforceability,
perfection or priority of any Lien granted pursuant thereto, or any party
thereto (other than Buyers) shall seek to disaffirm, terminate, limit or reduce
its obligations hereunder; or
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(o) Going Concern. Seller's audited annual financial statements or the
notes thereto or other opinions or conclusions stated therein shall be qualified
or limited by reference to the status of Seller as a "going concern" or a
reference of similar import or shall indicate that Seller has a negative net
worth or is insolvent.
20. REMEDIES.
Upon the occurrence, and during the continuance, of an Event of
Default, Buyers, at their option (which option shall be deemed to have been
exercised immediately upon the occurrence of an Event of Default pursuant to
Section 19(f), (g) or (l) hereof), shall have any or all of the following rights
and remedies, which may be exercised by Buyers; provided that an Event of
Default shall be deemed to be continuing unless expressly waived by the Buyers
in writing:
(a) The Repurchase Date for each Transaction hereunder shall 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).
(b) Seller's obligations hereunder to repurchase all Purchased
Securities at the Repurchase Price therefor on the Repurchase Date in such
Transactions shall thereupon become immediately due and payable; all Income paid
after such exercise or deemed exercise shall be retained by Buyers and applied
to the aggregate Repurchase Prices and any other amounts owing by Seller
hereunder; if Seller does not repurchase the Purchased Securities pursuant to
the first clause of this sentence, Seller shall immediately deliver to the Agent
for the ratable benefit of the Buyers or its designee any and all original
papers, records and files relating to the Purchased Securities subject to such
Transaction then in Seller's possession and/or control; and all right, title and
interest in and entitlement to such Purchased Securities shall be deemed
transferred to the Agent for the ratable benefit of the Buyers.
(c) Buyers may (i) sell, on or following the Business Day following the
date on which the Repurchase Price became due and payable pursuant to Section
20(b) without notice or demand of any kind, at a public or private sale and at
such price or prices as Buyers may reasonably deem satisfactory any or all
Purchased Securities or (ii) on or following such Business Day, in their sole
discretion elect, in lieu of selling all or a portion of such Purchased
Securities, to give Seller credit for such Purchased Securities in an amount
equal to the Market Value of the Purchased Securities against the aggregate
unpaid Repurchase Price and any other amounts owing by Seller hereunder. Seller
shall remain liable to Buyers for any amounts that remain owing to Buyers
following a sale and/or credit under the preceding sentence. The proceeds of any
disposition of Purchased Securities shall be applied first to the reasonable
costs and expenses incurred by Buyers in connection with or as a result of an
Event of Default; second to Breakage Costs of cover and/or related hedging
transactions; third to the aggregate Repurchase Prices; and fourth to all other
Obligations.
(d) Buyers may, at their option, enter into one or more Interest Rate
Protection Agreements covering all or a portion of the Purchased Securities, and
the Seller shall be responsible for all damages, judgments, costs and expenses
of any kind which may be imposed on, incurred by or asserted against the Buyers
relating to or arising out of such Interest Rate Protection Agreements;
including without limitation any losses resulting from such Interest Rate
Protection Agreements; provided that Seller shall not be responsible for losses
on such Interest Rate Protection Agreements arising directly from the gross
negligence or willful misconduct of Buyers.
(e) In addition to all the rights and remedies specifically provided
herein, Buyers shall have all other rights and remedies provided by applicable
federal, state, foreign, and local laws, whether
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existing at law, in equity or by statute, including, without limitation, all
rights and remedies available to a purchaser/secured party under the Uniform
Commercial Code.
The parties recognize that it may not be possible to purchase or sell
all of the Purchased Securities on a particular Business Day, or in a
transaction with the same purchaser, or in the same manner because the market
for such Purchased Securities may not be liquid. In view of the nature of the
Purchased Securities, the parties agree that liquidation of a Transaction or the
underlying Purchased Securities does not require a public purchase or sale and
that a good faith private purchase or sale shall be deemed to have been made in
a commercially reasonable manner. Accordingly, Buyers may elect the time and
manner of liquidating any Purchased Security and nothing contained herein shall
obligate Buyers to liquidate any Purchased Security on the occurrence of an
Event of Default or to liquidate all Purchased Securities in the same manner or
on the same Business Day or constitute a waiver of any right or remedy of
Buyers. Notwithstanding the foregoing, the parties to this Agreement agree that
the Transactions have been entered into in consideration of and in reliance upon
the fact that all Transactions hereunder constitute a single business and
contractual obligation and that each Transaction has been entered into in
consideration of the other Transactions.
Seller hereby acknowledges, admits and agrees that Seller's obligations
under this Agreement are recourse obligations of Seller to which Seller pledges
its full faith and credit. In addition to their rights hereunder, Buyers shall
have the right to proceed against any of Seller's assets which may be in the
possession of Buyers, any of Buyers' Affiliates or their designee, including the
right to liquidate such assets and to set-off the proceeds against monies owed
by Seller to Buyers pursuant to this Agreement, without prejudice to Buyers'
right to recover any deficiency, in accordance with the provisions and
procedures of Section 25 hereof.
Buyers may direct all Persons servicing the Purchased Securities to
take such action with respect to the Purchased Securities as Buyers determine
appropriate.
Seller shall be liable to Buyers for the amount of all expenses (plus
interest thereon at a rate equal to the Default Rate), and reasonable
foreseeable consequential damages, including, without limitation, all costs and
expenses incurred within 30 days of the Event of Default in connection with
hedging or covering transactions related to the Purchased Securities.
Seller shall cause all sums received by it with respect to the
Purchased Securities to be deposited with Buyers (or such other Person as Buyers
may direct) after receipt thereof.
Buyers shall without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court having
jurisdiction, without notice, to take possession of and protect, collect,
manage, liquidate, and sell the Purchased Securities and any other Purchased
Items or any portion thereof, collect the payments due with respect to the
Purchased Securities and any other Purchased Items or any portion thereof, and
do anything that Buyers are authorized hereunder to do. Seller shall pay all
costs and out-of-pocket expenses incurred by Buyers in connection with the
appointment and activities of such receiver.
Buyers may enforce their rights and remedies hereunder without prior
judicial process or hearing, and Seller hereby expressly waives, to the extent
permitted by law, any right Seller might otherwise have to require Buyers to
enforce their rights by judicial process. Seller also waives, to the extent
permitted by law, any defense (other than a defense of payment or performance)
Seller might otherwise have to the Obligations, arising from use of nonjudicial
process, enforcement and sale of all or any portion of the Purchased Securities
and any other Purchased Items or from any other election of remedies. Seller
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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.
Upon the occurrence, and during the continuance, of an Event of
Default, Buyers shall have, except as otherwise expressly provided in this
Agreement, the right to exercise any of their rights and/or remedies without
presentment, demand, protest or further notice of any kind other than as
expressly set forth herein, all of which are hereby expressly waived by Seller.
Seller hereby authorizes Buyers, at Seller's expense, to file such
financing statement or statements relating to the Purchased Securities and the
Purchased Items without Seller's signature thereon as Buyers at its option may
deem appropriate, and appoints each Buyer as Seller's attorney-in-fact to
execute any such financing statement or statements in Seller's name and to
perform all other acts which Buyers deem appropriate to perfect and continue the
lien and security interest granted hereby and to protect, preserve and realize
upon the Purchased Securities and the Purchased Items. This power of attorney is
coupled with an interest and is irrevocable without Buyers' consent.
21. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE.
No failure on the part of Buyers to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Buyers of any right, power
or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All rights and remedies of Buyers
provided for herein are cumulative and in addition to any and all other rights
and remedies provided by law, the Program Documents and the other instruments
and agreements contemplated hereby and thereby, and are not conditional or
contingent on any attempt by Buyers to exercise any of their rights under any
other related document. Buyers may exercise at any time after the occurrence,
and during the continuance, of an Event of Default one or more remedies, as they
so desire, and may thereafter at any time and from time to time exercise any
other remedy or remedies.
22. USE OF EMPLOYEE PLAN ASSETS.
Each Buyer represents and warrants to Seller and Seller represents and
warrants to Buyers that (a) it is not and will not be an employee benefit plan
as defined in Section 3 of Title I of ERISA, or a plan described in Section
4975(e)(1) of the Code and (b) it is not using and will not use "plan assets"
within the meaning of 29 C.F.R. ss. 2510.3-101 to engage in the Agreement or any
Transaction hereunder.
23. INDEMNITY.
(a) Seller agrees to pay as and when billed by Buyers (i) the
reasonable fees and out-of-pocket expenses of counsel for Buyers in connection
with the preparation, execution, delivery, modification and amendment of this
Agreement (subject to the limitation contained in Section 25 if applicable),
with respect to the perfection, protection or preservation of rights or
interests, under this Agreement, with respect to negotiations with Seller or
with other creditors of Seller or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto) and (ii) all costs and expenses
of Buyers in connection with the enforcement of this Agreement, whether in any
action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally (including, without limitation,
the reasonable fees and expenses of counsel for Buyers) whether or not the
transactions contemplated hereby are consummated; provided that Seller shall
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not be responsible for any such costs or expenses arising directly from the
gross negligence or willful misconduct of Buyers.
(b) Seller agrees to indemnify and hold harmless Buyers and each of
their respective Affiliates and their officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or awarded
against any Indemnified Party, in each case arising out of or in connection with
or by reason of (including, without limitation, in connection with any
investigation, litigation or other proceeding (whether or not such Indemnified
Party is a party thereto) relating to, resulting from or arising out of Seller's
non-performance under any of the Program Documents and all other documents
related thereto, any breach of a representation or warranty of Seller or
Seller's officer in this Agreement or any other Program Document, and all
actions taken pursuant thereto) the Transactions, the actual or proposed use of
the proceeds of the Transactions, this Agreement or any of the transactions
contemplated thereby, including, without limitation, any acquisition or proposed
acquisition, except, in each case, to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. Seller also agrees not to assert any claim
against Buyers or any of their 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 Facilities, 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.
(c) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Indemnified Party in
respect of which the indemnity provided above may be sought from Seller (the
"Indemnifying Party") each such Indemnified Party shall promptly notify the
Indemnifying Party in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel satisfactory to the
Indemnified Party and the payment of all expenses and reasonable legal fees;
provided that failure to notify the Indemnifying Party shall not relieve it from
any liability it may have to such Indemnified Party except to the extent that it
shall be actually prejudiced thereby. The Indemnified Party shall have the right
to employ separate counsel in any such action and to participate in the defense
thereof at the expense of the Indemnified Party; provided, however that the fees
and expenses of separate counsel to the Indemnified Party in any such proceeding
shall be at the expense of the Indemnifying Party if (i) the Indemnifying Party
has agreed to pay such fees and expenses, (ii) the Indemnifying Party shall have
failed to assume the defense of such action or proceeding or employ counsel
satisfactory to the Indemnified Party in any such action or proceeding within a
reasonable time after the commencement of such action or (iii) the named parties
to any such action or proceeding (including any impleaded parties) include both
the Indemnified Party and the Indemnifying Party, and the Indemnified Party
shall have been advised in writing by counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the Indemnifying Party which gives rise to a conflict of interest
(in which case, if the Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense of such action or proceeding on behalf of such Indemnified Party, it
being understood, however, that the Indemnifying Party shall not, in connection
with any one such action or proceeding or separate but substantially similar or
related actions or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for the
Indemnified Parties, which firm shall be designated in writing by the
Indemnified Party). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding
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effected without its written consent to the extent that any such settlement
shall be prejudicial to the Indemnifying Party (to which the Indemnified Party
did not consent), but, if settled with its written consent, or if there is a
final non-appealable judgment for the plaintiff in any such action or proceeding
with respect to which the Indemnifying Party shall have received notice in
accordance with this paragraph, the Indemnifying Party agrees to indemnify and
hold the Indemnified Parties harmless from and against any loss or liability by
reason of such settlement or judgment.
(d) If Seller fails to pay when due any costs, expenses or other
amounts payable by it under this Agreement, including, without limitation,
reasonable fees and expenses of counsel and indemnities, such amount may be paid
on behalf of Seller by Buyers, in their sole discretion and Seller shall remain
liable for any such payments by Buyers. No such payment by Buyers shall be
deemed a waiver of any of Buyers' rights under the Program Documents.
(e) Without prejudice to the survival of any other agreement of Seller
hereunder, the agreements and obligations of Seller contained in this Section
shall survive the payment in full of the Repurchase Price and all other amounts
payable hereunder and delivery of the Purchased Securities by Buyers against
full payment therefor.
24. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS.
Seller hereby expressly waives, to the fullest extent permitted by law,
every statute of limitation on a deficiency judgment, any reduction in the
proceeds of any Purchased Securities as a result of restrictions upon Buyers
contained in the Program Documents or any other instrument delivered in
connection therewith, and any right that it may have to direct the order in
which any of the Purchased Securities shall be disposed of in the event of any
disposition pursuant hereto.
25. REIMBURSEMENT; SET-OFF.
All sums reasonably expended by Buyers in connection with the exercise
of any right or remedy provided for herein shall be and remain Seller's
obligation. Seller agrees to pay, with interest at the Default Rate to the
extent that an Event of Default has occurred, the reasonable out-of-pocket
expenses and reasonable attorneys' fees incurred by Buyers in connection with
the preparation, negotiation, enforcement (including any waivers),
administration and amendment of the Program Documents (regardless of whether a
Transaction is entered to into hereunder), the taking of any action, including
legal action, required or permitted to be taken by Buyers (without duplication
to Buyers) pursuant thereto, or any "due diligence" or refinancing or
restructuring in the nature of a "workout". If Buyers determine that, due to the
introduction of, any change in, or the compliance by Buyers 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 Buyers in engaging in the present or any future
Transactions, then Seller agrees to pay to Buyers, from time to time, upon
demand by Buyers the actual cost of additional amounts as specified by Buyers to
compensate Buyers for such increased costs. Notwithstanding any other provisions
in this Agreement, in the event of any such change in the eurocurrency reserve
requirement or the interpretation of any law, regulation or any guideline or
request from any central bank or other Governmental Authority, Seller will have
the right to terminate all Transactions then outstanding as of a date selected
by Seller, which date shall be prior to the applicable Repurchase Date and which
date shall thereafter for all purposes hereof, be deemed to be the Repurchase
Date. In addition, Buyers shall promptly notify Seller if any events in clause
(i) or (ii) of this Section 25 occur.
In addition to any rights and remedies of Buyers hereunder and by law,
Buyers shall have the right, without prior notice to Seller, any such notice
being expressly waived by Seller to the extent
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permitted by applicable law, upon any amount becoming due and payable by Seller
under this Agreement, under a Transaction, or under any other agreement between
the parties (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,
cash, the proceeds of the liquidation of the Purchased Securities and Additional
Purchased Securities, any other Purchased Items or its proceeds and all other
sums or obligations owed by Buyers, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing by
Buyers or any Affiliate thereof to or for the credit or the account of Seller or
any Affiliate thereof. Buyers agree promptly to notify Seller after any such set
off and application made by Buyers; provided that the failure to give such
notice shall not affect the validity of such set off and application.
26. FURTHER ASSURANCES.
Seller agrees to do such further acts and things and to execute and
deliver to Buyers such additional assignments, acknowledgments, agreements,
powers and instruments as are reasonably required by Buyers to carry into effect
the intent and purposes of this Agreement, to perfect the interests of Buyers in
the Purchased Securities or to better assure and confirm unto Buyers their
rights, powers and remedies hereunder.
27. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION.
This Agreement supersedes and integrates all previous negotiations,
contracts, agreements and understandings between the parties relating to a sale
and repurchase of Purchased Securities and Additional Purchased Securities
thereto, and it, together with the other Program Documents, each Confirmed
Transaction Notice, and the other documents delivered pursuant hereto or
thereto, contains the entire final agreement of the parties. No prior
negotiation, agreement, understanding or prior contract shall have any validity
hereafter.
28. TERMINATION.
This Agreement shall remain in effect until the earlier of (i) a
Business Day as the Buyers shall specify in a notice delivered to the Seller
within a reasonable time prior to such specified Business Day, or (ii) at
Buyers' option, upon the occurrence of an Event of Default (such date, the
"Termination Date"); provided that in no event shall the Termination Date be
more than 364 days after the Effective Date. No such termination shall affect
Seller's outstanding obligations to Buyers at the time of such termination.
Seller's obligations to indemnify Buyers pursuant to this Agreement shall
survive the termination hereof.
29. ASSIGNMENT; PARTICIPATIONS.
(a) The Program Documents are not assignable by Seller. A Buyer, in its
sole discretion, may from time to time assign all or a portion of its rights and
obligations under this Agreement and the Program Documents; provided, however
that if such assignment is not made to an Affiliate of the Buyer, the Buyer must
obtain the consent of Seller for such assignment, which consent shall not be
unreasonably withheld; and provided further that the Buyer shall maintain, for
review by Seller upon written request, a register of assignees and a copy of an
executed assignment and acceptance by the Buyer and its assignee (an "Assignment
and Acceptance"), specifying the percentage or portion of such rights and
obligations assigned. Upon such assignment, (a) such assignee shall be a party
hereto and to each Program Document to the extent of the percentage or portion
set forth in the Assignment and Acceptance, and shall succeed to the applicable
rights and obligations of the Buyer hereunder, and (b) the Buyer shall, to the
extent that such rights and obligations have been so assigned by it to either
(i) an Affiliate of the Buyer which assumes the obligations of the Buyer or (ii)
to another Person approved by
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Seller (such approval not to be unreasonably withheld) which assumes the
obligations of the Buyer, be released from its obligations hereunder and under
the Program Documents. Unless otherwise stated in the Assignment and Acceptance,
Seller shall continue to take directions solely from the Agent on behalf of the
Buyers. Subject to the provisions of Section 37, a Buyer may distribute to any
prospective assignee any document or other information delivered to the Buyer by
Seller. Notwithstanding any assignment by a Buyer pursuant to this Section 29,
the Buyers shall remain liable as to the Transactions.
(b) A Buyer may sell participations to one or more Persons in or to all
or a portion of their rights and obligations under this Agreement; provided,
however, that (i) the Buyer's obligations under this Agreement shall remain
unchanged, (ii) the Buyer shall remain solely responsible to the other parties
hereto for the performance of such obligations; and (iii) the Seller shall
continue to deal solely and directly with the Agent on behalf of the Buyers in
connection with the Buyers' rights and obligations under this Agreement.
(c) The Buyers may, in connection with any participation or proposed
participation pursuant to this Section 29, disclose to the assignee or
participant or proposed participant, as the case may be, any information
relating to the Seller or any of its Subsidiaries or to any aspect of the
Transactions that has been furnished to the Buyers by or on behalf of the Seller
or any of its Subsidiaries; provided that such participant agrees to hold such
information subject to the confidentiality provisions of this Agreement.
30. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement nor any
consent to any failure to comply herewith or therewith shall in any event be
effective unless the same shall be in writing and signed by Seller and Buyers,
and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
31. SEVERABILITY.
If any provision of any Program Document is declared invalid by any
court of competent jurisdiction, such invalidity shall not affect any other
provision of the Program Documents, and each Program Document shall be enforced
to the fullest extent permitted by law.
32. BINDING EFFECT; GOVERNING LAW.
This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and assigns, except that Seller may not
assign or transfer any of its rights or obligations under this Agreement,
Confirmed Transaction Notice or any other Program Document without the prior
written consent of Buyers. 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 (EXCEPT FOR SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
33. CONSENT TO JURISDICTION.
SELLER HEREBY WAIVES TRIAL BY JURY. SELLER HEREBY IRREVOCABLY CONSENTS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING
OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING. SELLER
HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION SELLER MAY HAVE TO, NON-EXCLUSIVE
PERSONAL JURISDICTION AND VENUE IN THE
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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 DOCUMENTS. SELLER HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF A SUMMONS AND COMPLAINT AND OTHER PROCESS IN ANY ACTION, CLAIM OR
PROCEEDING BROUGHT BY ANOTHER PARTY IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER PROGRAM DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS
PROPERTY, IN THE MANNER SPECIFIED IN THIS SECTION 33 AND TO SUCH PARTY'S ADDRESS
SPECIFIED IN SECTION 36 OR SUCH OTHER ADDRESS AS SUCH PARTY SHALL HAVE PROVIDED
IN WRITING TO THE OTHER PARTIES HERETO. NOTHING IN THIS SECTION 33 SHALL AFFECT
THE RIGHT OF ANY PARTY HERETO TO (I) SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW, OR (II) BRING ANY ACTION OR PROCEEDING AGAINST ANY
OTHER PARTY OR ITS PROPERTIES IN THE COURTS OF ANY OTHER JURISDICTIONS.
34. SINGLE AGREEMENT.
Seller and Buyers acknowledge that, and have entered hereinto and will
enter into each Transaction hereunder in consideration of and in reliance upon
the fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, Seller and each Buyer agrees (i) to perform all of its obligations
in respect of each Transaction hereunder, and that a default in the performance
of any such obligations shall constitute a default by it in respect of all
Transactions hereunder, and (ii) that payments, deliveries and other transfers
made by either of them in respect of any Transaction shall be deemed to have
been made in consideration of payments, deliveries and other transfer in respect
of any other Transaction hereunder, and the obligations to make any such
payments, deliveries and other transfers may be applied against each other and
netted.
35. INTENT.
Seller and Buyers recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the United
States Code, as amended ("USC") (except insofar as the Purchased Securities
subject to such Transaction or the term of such Transaction would render such
definition inapplicable), a "forward contract" as that term is defined in
Section 101 of Title 11 of the USC, and a "securities contract" as that term is
defined in Section 741 of Title 11 of the USC (except insofar as the Purchased
Securities subject to such Transaction or the term of such Transaction would
render such definition inapplicable).
It is understood that Buyers' right to liquidate the Purchased
Securities delivered to them in connection with the Transactions hereunder or to
exercise any other remedies pursuant to Section 20 hereof is a contractual right
to liquidate such Transaction as described in Sections 555 and 559 of Title 11
of the USC.
36. NOTICES AND OTHER COMMUNICATIONS.
Except as provided herein, any notice required or permitted by this
Agreement shall be in writing and shall be effective and deemed delivered only
when received by the party to which it is sent; provided, however, that a
facsimile transmission shall be deemed to be received when transmitted so long
as the transmitting machine has provided an electronic confirmation (without
error message) of such transmission. Any such notice shall be sent to a party at
the address or facsimile transmission number set forth below:
-35-
if to Seller:
MortgageIT Holdings, Inc.
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
With a copy to:
Attention: Xxxxxxx Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
if to Buyers or Agent:
Deutsche Bank Securities Inc.
Securitized Products Group
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X'Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
The financial statements, monthly certifications and other reports and
information required to be delivered by Seller to Buyers pursuant to Section 14
of this Agreement shall also be delivered by Seller to Buyers to:
Deutsche Bank Securities Inc.
Securitized Products Group
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X'Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
as such address or number may be changed by like notice.
37. CONFIDENTIALITY.
Buyers, Seller hereby acknowledge and agree that (a) all written or
computer-readable information provided by one party to any other regarding the
terms set forth in this Agreement or the Transactions contemplated hereby and
(b) all information and materials provided by one party to the other (including
agents of such party) in connection with this Agreement and the Transactions
contemplated hereby which are non-public, confidential or proprietary in nature,
and all analyses, compilations, studies or other documents prepared by such
party containing such material (the "Confidential Terms") shall be kept
confidential and shall not be divulged to any party without the prior written
consent of such other party except to the extent that (i) it is necessary to do
so in working with legal counsel, auditors, taxing authorities or other
governmental agencies or regulatory bodies or in order to comply with any
applicable federal or state laws, (ii) any of the Confidential Terms are in the
public domain other than due to a breach of this covenant, (iii) in the event of
an Event of Default, Buyers determine such information
-36-
(other than non-public information about Seller) to be necessary or desirable to
disclose in connection with the marketing and sales of the Purchased Securities
or otherwise to enforce or exercise the Buyers' rights hereunder, (iv)
disclosure is made to the holders of the debt or repurchase obligations of
Seller (provided that any such disclosure shall not identify any Pricing Rate
information or any other financial terms under this Agreement), or (v)
disclosure is made subject to a confidentiality agreement in the form attached
hereto as Exhibit E that is duly executed by the party receiving the
confidential information. The provisions set forth in this Section 37 shall
survive the termination of this Agreement.
38. RECORDING OF COMMUNICATIONS.
Each party (i) consents to the monitoring or recording, at any time and
from time to time, by the other party of any and all communications in
connection with this Agreement or any potential Transactions hereunder between
Affiliates, officers, directors, partners, employees, or agents of the parties,
(ii) waives any further notices of such monitoring or recording, and (iii)
agrees to notify (and, if required by law, obtain to the extent so required, the
consent of) its Affiliates, officers, directors, partners, employees and agents
of this consent with respect to such monitoring or recording.
39. THE AGENT.
(a) Appointment. Each Buyer hereby irrevocably designates and appoints
Deutsche Bank Securities Inc. as Agent of such Buyer under this Agreement and
the other Program Documents, and each such Buyer irrevocably authorizes Deutsche
Bank Securities Inc., as the Agent for such Buyer, to take such action on its
behalf under the provisions of this Agreement and the other Program Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Agent by the terms of this Agreement and the other Program Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Buyer, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Program Document or otherwise exist
against the Agent.
(b) Delegations of Duties. The Agent may execute any of its duties
under this Agreement and the other Program Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
(c) Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or any other Program Document (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Buyers for any recitals, statements,
representations or warranties made by the Seller or any Subsidiary or any
officer thereof contained in this Agreement or any other Program Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or any
other Program Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Program Document or
for any failure of the Seller or any Subsidiary to perform its obligations
hereunder or thereunder. Unless otherwise set forth herein or as otherwise
directed by Buyers, the Agent shall not be under any obligation to any Buyer to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Program
Document, or to inspect the properties, books or records of the Seller or any
Subsidiary.
-37-
(d) Reliance by the Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to the Seller), independent accountants and other experts selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Program Document unless it shall first
receive such advice or concurrence of the Buyers, as it deems appropriate, or it
shall first be indemnified to its satisfaction by the Buyers against any and all
liability and expense (except to the extent incurred as a result of the Agent's
gross negligence or willful misconduct) which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other Program Documents in accordance with a request of the Buyers, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon the Buyers and any successor(s) thereto.
(e) Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default hereunder unless the Agent has
received notice from a Buyer or the Seller referring to this Agreement,
describing such Default and stating that such notice is a "notice of default".
In the event that the Agent receives such a notice, the Agent shall use its best
efforts to give prompt notice thereof to the Buyers; provided, however, that no
failure or delay by the Agent in giving such notice shall relieve any Buyer of
any obligation hereunder or give rise to any liability of the Agent. The Agent
shall take such action with respect to such Default as shall be reasonably
directed by the Buyers as appropriate; provided, however that unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interests of the Buyers
or as the Agent shall believe necessary to protect the Buyers' interests in the
Purchased Items.
(f) Non-Reliance on the Agent and Other Buyers. Each Buyer expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of the Seller or any Subsidiary shall be deemed to
constitute any representation or warranty by the Agent to any Buyer. Each Buyer
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Buyer, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition of the Seller and
each Subsidiary and made its own decision to make enter into this Agreement and
the other Program Document. Each Buyer also represents that it will,
independently and without reliance upon the Agent or any other Buyer, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis, appraisals and decisions in taking or not
taking action under this Agreement and the other Program Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition of the Seller and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Buyers by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Buyer with any information concerning
the business, operations, property, condition (financial or otherwise) or
prospects of the Seller or any Subsidiary which may come into the possession of
the Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
(g) Indemnification. The Buyers agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Seller or its Subsidiaries
and without limiting the obligation of such Persons to do so), ratably from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs (including the allocated cost of internal
counsel), expenses or disbursements of
-38-
any kind whatsoever which may at any time be imposed on, incurred by or asserted
against the Agent, in its capacity as Agent, but not as a Buyer hereunder, in
any way relating to or arising out of this Agreement, any of the other Program
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided,
however, that no Buyer shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting from the Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the termination of this Agreement.
(h) Successor Agent. The Agent may resign as Agent upon 30 days' notice
to the Buyers. If the Agent shall resign as Agent under this Agreement and the
other Program Documents, then the Buyers shall appoint a successor agent for the
Buyers, which successor agent shall be approved by the Seller (which consent
shall not be unreasonably withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent and the term "Agent" shall
mean such successor agent, effective upon its appointment, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. After any retiring Agent's resignation as Agent, the
provisions of this Section shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement and the other
Program Documents.
40. NO PROCEEDINGS
Seller hereby covenants and agrees (which agreement, shall, pursuant to
the terms of this Agreement, be binding upon its successors and assigns) that
it shall not institute against, or join any other Person in instituting
against, Gemini any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy or similar law, for one year and a day after the latest maturing
Commercial Paper Note (whether or not issued to fund a Transaction under this
Agreement) issued by Gemini, as applicable, is paid. Notwithstanding anything
in this Agreement to the contrary, any breach of the terms or conditions of
this Section 40 shall not be subject to any grace or cure period. The
agreements in this Section 40 shall survive the termination of this Agreement
and the satisfaction of all Obligations under the Program Documents.
[Signature Page Follows]
-39-
IN WITNESS WHEREOF, Seller and Buyers have caused their names
to be signed to this Master Repurchase Agreement by their respective officers
thereunto duly authorized as of the date first above written.
MORTGAGEIT HOLDINGS, INC., as Seller
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
----------------------------------------
Title: President and CFO
---------------------------------------
DEUTSCHE BANK SECURITIES INC., as Buyer
and Agent, as applicable
By: /s/ Xxxxxxx X'Xxxxx
------------------------------------------
Name: Xxxxxxx X'Xxxxx
----------------------------------------
Title: Director
---------------------------------------
By: /s/ Xxxx XxXxxxxx
------------------------------------------
Name: Xxxx XxXxxxxx
----------------------------------------
Title: Vice President
---------------------------------------
GEMINI SECURITIZATION CORP., LLC as Buyer
By: /s/ R. Xxxxxxx Xxxxxxxxx
------------------------------------------
Name: R. Xxxxxxx Xxxxxxxxx
----------------------------------------
Title: Treasurer
---------------------------------------
[Signature page to Master Repurchase Agreement]
EXHIBIT A
OFFICER'S CERTIFICATE
---------------------
I, ___________________, do hereby certify that I am duly elected,
qualified and authorized officer of MortgageIT Holdings, Inc. ("Seller"). This
Certificate is delivered to you in connection with Section 14(d)(iv) of the
Master Repurchase Agreement, dated as of May 12, 2006, among MortgageIT
Holdings, Inc., as seller, Deutsche Bank Securities Inc. and Gemini
Securitization Corp., LLC as buyers ("Buyers"), and Deutsche Bank Securities
Inc., as agent for the Buyers (the "Agreement"). I hereby certify that, as of
the date of the financial statements attached hereto and as of the date hereof,
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) Seller has Unrestricted Cash and Cash Equivalents of at least
$5,000,000;
(ii) Seller has an Adjusted Tangible Net Worth, on a consolidated
basis, of not less than $250,000,000;
(iii) No Default or Event of Default has occurred or is continuing.
[If any Default or Event of Default has occurred and is continuing, Seller
shall describe the same in reasonable detail and describe the action the
Seller has taken or proposes to take with respect thereto.]
(iv) Attached hereto as Schedule 1 is a description of the Purchased
Securities pending repurchase.
Capitalized terms used but not defined herein shall have the respective
meanings given to such terms in the Agreement.
IN WITNESS WHEREOF, I have signed this certificate and affixed the seal
of the Company.
Date: ______________, 200___
MORTGAGEIT HOLDINGS, INC.
Name:
-----------------------------------
Title:
-----------------------------------
[SEAL]
I, __________________, _______________ of the Company do hereby certify
that ________________ is the duly elected or appointed, qualified and acting
________________ of the Company, and the signature set forth above is the
genuine signature of such officer in the date hereof.
Name:
-----------------------------------
Title:
-----------------------------------
-1-
SCHEDULE 1
----------
-2-
EXHIBIT B
FORM OF TRANSACTION NOTICE
Date: __________, 200_
Deutsche Bank Securities Inc.
Gemini Securitization Corp., LLC
Attn: Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Transaction No. ______
Ladies and Gentlemen:
The undersigned executes and delivers this notice ("Notice") pursuant to
the requirements of the Master Repurchase Agreement (the "Agreement"), dated as
of May 12, 2006, among MortgageIT Holdings, Inc., as seller ("Seller"), Deutsche
Bank Securities Inc. and Gemini Securitization Corp., LLC as buyers
(collectively, "Buyers"), and Deutsche Bank Securities Inc., as agent for the
Buyers (the "Agent"), in connection with the submission for sale on May 12, 2006
(the "Purchase Date") of the Purchased Securities identified on the schedule
delivered herewith. All capitalized terms used in this Notice without definition
shall have the same meanings herein as they have in the Agreement.
The Seller hereby represents and certifies to Buyers as follows:
(i) As of this date, Seller is in compliance with all of the terms and
conditions of the Program Documents. The Purchased Securities (are
being/have been) delivered to Buyers.
(ii) Except as otherwise previously disclosed in writing to Buyers,
Seller's representations and warranties set forth in the Program Documents
and any other related document are true and accurate in all material
respects as of the date of this Notice.
(iii) The Purchased Securities, which are identified on such schedule,
satisfy the requirements of eligibility set forth in the Agreement and all
related agreements between Buyers and Seller.
(iv) Upon payment by Buyers of the Purchase Price in respect of the
Transaction involving the Purchased Securities, all of the right (including
the power to convey title thereto), title and interest in and to the
Purchased Security and each document with respect thereto, shall be
transferred, assigned, set over and otherwise conveyed to Buyers.
(v) The general terms of the sale are:
X. Xxxx Issuer:_____________
B. Series:_____________
C. Initial Purchase Date:
D. Repurchase Date (which shall not be more than 30 days after the
Initial Purchase Date):_____________
E. Pricing Rate:_____________
F. Security Class:_____________
-3-
G. Cusip: _____________
H. Purchase Price: __% of Market Value
I. Principal Amount of Purchased Securities: $_____________
J. Purchase Price (Dollar Amount):.$_____________
MORTGAGEIT HOLDINGS, INC., as Seller
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Agreed and Accepted by:
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Attorney in Fact for Gemini
Securitization Corp., LLC as Buyer
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
DEUTSCHE BANK SECURITIES, INC., as
Agent for the Buyers
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-4-
EXHIBIT C
REPRESENTATIONS AND WARRANTIES RE: PURCHASED SECURITIES
As to each Purchased Security, the Seller shall be deemed to make the
following representations and warranties to the Buyers on and as of the Purchase
Date for such Purchased Security and as of each date such Purchased Security is
subject to a Transaction hereunder:
(a) Compliance with Applicable Laws. The Purchased Security has been
validly issued, and, to the extent applicable, is fully paid and non-assessable,
and the Purchased Security has been offered, issued and sold in compliance with
all applicable laws;
(b) No Encumbrances. Other than with respect to a Transaction
contemplated by this Agreement, there are (i) no outstanding rights, options,
warrants or agreements for a purchase, sale or issuance, in connection with the
Purchased Security, (ii) no agreements on the part of the Seller to issue, sell
or distribute the Purchased Security, and (iii) no obligations on the part of
the Seller (contingent or otherwise) to purchase, repurchase, redeem or
otherwise acquire any securities or any interest therein (other than from the
Buyers) or to pay any dividend or make any distribution in respect of the
Purchased Security (other than to the Buyers);
(c) Proper Form. The Purchased Security is a certificated security in
registered form, or is in uncertificated form and (i) held through the
facilities of a Relevant System, or (ii) registered on the books of the issuer
thereof;
(d) Validity of Governing Agreements. To the best of the Seller's
knowledge, each of the Governing Agreements is genuine, and each is the legal,
valid and binding obligation of the makers thereof enforceable in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and general equitable principles. The Seller has the
legal capacity to own, hold and transfer the Purchased Security under the terms
of the Governing Agreements. Each of the Governing Agreements is in full force
and effect, and, to the Seller's knowledge, the enforceability of each such
Governing Agreement has not been contested by any party thereto;
(e) Taxable Mortgage Pool. With respect to a Purchased Security, the
related Issuer is not a (i) treated as an association taxable as a corporation
for federal income tax and relevant state income and franchise tax purposes,
(ii) taxable as a taxable mortgage pool as defined in Section 7701(i) of the
Code or (iii) taxable as a "publicly traded partnership" as defined in Treasury
Regulation section 1.7704-1 for federal income tax purposes and relevant state
franchise or income tax purposes.
(f) Original Terms Unmodified. Except as otherwise disclosed to Agent
in writing, the terms of the Governing Agreement and the related Purchased
Security have not been impaired, altered or modified in any material respect;
(g) No Waiver. The Seller has not waived the performance by any other
party of any action, if the failure to perform such action would cause the
Governing Agreement with respect to the Purchased Security to be in default, nor
has the Seller waived any default resulting from any action or inaction by such
party; and
(h) Purchased Securities Assignable. Each Purchased Security is
assignable by the Buyers. The Governing Agreements permit the Buyers to sell,
assign, pledge or transfer such Purchased Security subject to the satisfaction
of certain conditions precedent set forth therein.
D-1
EXHIBIT D
FORM OF BOND POWER
For value received, the undersigned does hereby sell, assign and
transfer unto ________________________ $___________________ par amount of the
[name of security], represented by Certificate No. [__] herewith, and all rights
thereunder, and does hereby irrevocably constitute and appoint
________________________ attorney to transfer the said Certificate on the books
of the related trustee (as defined in said Certificate), with full power of
substitution in the premises.
MORTGAGEIT HOLDINGS, INC.
By:___________________________
Name:
Title:
Dated:
Signature Guaranteed
By:___________________________
D-2
EXHIBIT E
FORM OF CONFIDENTIALITY AGREEMENT
In connection with your consideration of a possible or actual
acquisition of a participating interest (the "Transaction") in an advance, note
or commitment of [______________] ("Buyer") pursuant to a Master Repurchase
Agreement among Deutsche Bank Securities Inc., Gemini Securitization Corp., LLC
and MortgageIT Holdings, Inc. (the "Seller") dated May 12, 2006, you have
requested the right to review certain non-public information regarding the
Seller that is in the possession of Buyer. In consideration of, and as a
condition to, furnishing you with such information and any other information
(whether communicated in writing or communicated orally) delivered to you by
Buyer or its affiliates, directors, officers, employees, advisors, agents or
"controlling persons" (within the meaning of the Securities Exchange Act of
1934, as amended (the "1934 Act")) (such affiliates and other persons being
herein referred to collectively as Buyer "Representatives") in connection with
the consideration of a Transaction (such information being herein referred to as
"Evaluation Material"), Buyer hereby requests your agreement as follows:
1. The Evaluation Material will be used solely for the purpose of
evaluating a possible Transaction with Buyer involving you or your
affiliates, and unless and until you have completed such Transaction
pursuant to a definitive agreement between you or any such affiliate and
Buyer, such Evaluation Material will be kept strictly confidential by you
and your affiliates, directors, officers, employees, advisors, agents or
controlling persons (such affiliates and other persons being herein
referred to collectively as "your Representatives"), except that the
Evaluation Material or portions thereof may be disclosed to those of your
Representatives who need to know such information for the purpose of
evaluating a possible Transaction with Buyer (it being understood that
prior to such disclosure your Representatives will be informed of the
confidential nature of the Evaluation Material and shall agree to be bound
by this Agreement). You agree to be responsible for any breach of this
Agreement by your Representatives.
2. The term "Evaluation Material" does not include any information
which (i) at the time of disclosure or thereafter is generally known by the
public (other than as a result of its disclosure by you or your
Representatives) or (ii) was or becomes available to you on a
nonconfidential basis from a person not otherwise bound by a confidential
agreement with Buyer or its Representatives or is not otherwise prohibited
from transmitting the information to you. As used in this Agreement, the
term "person" shall be broadly interpreted to include, without limitation,
any corporation, company, joint venture, partnership or individual.
3. In the event that you receive a request to disclose all or any part
of the information contained in the Evaluation Material under the terms of
a valid and effective subpoena or order issued by a court of competent
jurisdiction, you agree to (i) immediately notify Buyer and the Seller of
the existence, terms and circumstances surrounding such a request, (ii)
consult with the Seller on the advisability of taking legally available
steps to resist or narrow such request, and (iii) if disclosure of such
information is required, exercise your best efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded to
such information.
4. Unless otherwise required by law in the opinion of your counsel,
neither you nor your Representative will, without our prior written
consent, disclose to any person the fact that the Evaluation Material has
been made available to you.
D-3
5. You agree not to initiate or maintain contact (except for those
contacts made in the ordinary course of business) with any officer,
director or employee of the Seller regarding the business, operations,
prospects or finances of the Seller or the employment of such officer,
director or employee, except with the express written permission of the
Seller.
6. You understand and acknowledge that the Seller is not making any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material or any other information provided
to you by Buyer. None of the Seller, its respective affiliates or
Representatives, or any of its respective officers, directors, employees,
agents or controlling persons (within the meaning of the 0000 Xxx) shall
have any liability to you or any other person (including, without
limitation, any of your Representatives) resulting from your use of the
Evaluation Material.
7. You agree that neither Buyer nor the Seller has granted you any
license, copyright, or similar right with respect to any of the Evaluation
Material or any other information provided to you by Buyer.
8. If you determine that you do not wish to proceed with the
Transaction, you will promptly deliver to Buyer all of the Evaluation
Material, including all copies and reproductions thereof in your possession
or in the possession of any of your Representatives.
9. Without prejudice to the rights and remedies otherwise available to
the Seller, the Seller shall be entitled to equitable relief by way of
injunction if you or any of your Representatives breach or threaten to
breach any of the provisions of this Agreement. You agree to waive, and to
cause your Representatives to waive, any requirement for the securing or
posting of any bond in connection with such remedy.
10. The validity and interpretation of this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York applicable to agreements made and to be fully performed
therein (excluding the conflicts of law rules). You submit to the
jurisdiction of any court of the State of New York or the United States
District Court for the Southern District of the State of New York for the
purpose of any suit, action, or other proceeding arising out of this
Agreement.
11. The benefits of this Agreement shall inure to the respective
successors and assigns of the parties hereto, and the obligations and
liabilities assumed in this Agreement by the parties hereto shall be
binding upon the respective successors and assigns.
12. If it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) that any term or provision
hereof is invalid or unenforceable, (i) the remaining terms and provisions
hereof shall be unimpaired and shall remain in full force and effect and
(ii) the invalid or unenforceable provision or term shall be replaced by a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of such invalid or unenforceable term or
provision.
13. This Agreement embodies the entire agreement and understanding of
the parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to the matters provided for
herein. No alteration, waiver, amendments, or change or supplement hereto
shall be binding or effective unless the same is set forth in writing by a
duly authorized representative of each party and may be modified or waived
only by a separate letter executed by the Seller and you expressly so
modifying or waiving such Agreement.
D-4
14. For the convenience of the parties, any number of counterparts of
this Agreement may be executed by the parties hereto. Each such counterpart
shall be, and shall be deemed to be, an original instrument, but all such
counterparts taken together shall constitute one and the same Agreement.
Kindly execute and return one copy of this letter which will constitute
our Agreement with respect to the subject matter of this letter.
[NAME OF BUYER]
By:
---------------------------------
Name
Title:
Confirmed and agreed to
this _____ day of _____________, 200_.
By:____________________________________
Name
Title:
D-5
EXHIBIT F
FORM OF REQUEST FOR RELEASE
---------------------------
Date: __________, ____
The undersigned, MortgageIT Holdings, Inc. ("Seller"), hereby provides
notice of the proposed [repurchase of the below referenced Purchased Securities]
[sale of the below referenced Purchased Securities to ____________________
("Third Party Purchaser")]. Such Purchased Securities have previously been
delivered to Deutsche Bank Securities, Inc. and Gemini Securitization Corp., LLC
("Buyers") pursuant to the Master Repurchase Agreement dated as of May 12, 2006
("Repurchase Agreement") made by and among the Seller and the Buyers. The
anticipated purchase proceeds to be paid to the Buyers directly are
$[___________]. Capitalized terms not otherwise defined herein are defined in
the Repurchase Agreement.
Seller requests release from Buyers of the following described
documentation for the identified Purchased Securities, possession of which shall
be delivered to [Seller] [Third Party Purchaser] in connection with the sale
thereof:
[Description of Purchased Securities]
Please send the referenced documentation to:
[Address]
MORTGAGEIT HOLDINGS, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
Acknowledged and Consented to as of this __ day of ________, 200 :
DEUTSCHE BANK SECURITIES, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
By: _______________________________
Name: _______________________________
Title: _______________________________
GEMINI SECURITIZATION CORP., LLC
By: _______________________________
Name: _______________________________
Title: _______________________________
D-6
EXHIBIT G
FORM OF THIRD PARTY PURCHASER TRANSMITTAL LETTER
------------------------------------------------
[Seller Letterhead]
[Third Party Purchaser]
-------------------------------
-------------------------------
Re:
----------------------------
Ladies and Gentlemen:
Attached please find those Purchased Securities listed separately on the
attached schedule, which Purchased Securities are being delivered to you for
purchase.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in that certain Master Repurchase Agreement dated as of May 12, 2006
("Repurchase Agreement") made by and among MortgageIT Holdings, Inc. ("Seller"),
and Deutsche Bank Securities, Inc. and Gemini Securitization Corp., LLC
("Buyers").
Each of the Purchased Securities is subject to an ownership and/or security
interest in favor of the Buyers, which security interest shall be automatically
released upon remittance of the purchase price for such Purchased Securities
(the "Payoff Amount") by wire transfer to the following account:
WIRE INSTRUCTIONS:
[Buyers to provide]
Upon receipt by Buyers of the Payoff Amount, Buyers will promptly release the
Purchased Securities to you and will release all ownership and security interest
therein.
Very truly yours,
MORTGAGEIT HOLDINGS, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
RECEIPT ACKNOWLEDGED:
--------------------
[THIRD PARTY PURCHASER]
By: _______________________________
Name: _______________________________
Title: _______________________________
Date: ________________
D-7
EXHIBIT H
CERTIFICATE OF NON-FOREIGN STATUS
---------------------------------
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to [Section 3.02] of the [Trust Agreement, dated as of ____________]
(the "Trust Agreement"), among [MortgageIT Securities Corp., as Depositor,
Wilmington Trust Company, as Owner Trustee and Xxxxx Fargo Bank, National
Association, in its capacity as Securities Administrator, as Certificate
Registrar and Certificate Paying Agent], in connection with the acquisition of,
transfer to or possession by the undersigned, whether as beneficial owner for
U.S. federal income tax purposes (the "Beneficial Owner"), or nominee on behalf
of the Beneficial Owner of the Certificates, Series [_____] (the "Certificate").
Capitalized terms used but not defined in this certificate have the respective
meanings given them in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee),
and in all cases sign and otherwise complete Part III. In addition, each holder
shall submit with the Certificate an IRS Form W-9 relating to such holder. To
confirm to the Trust that the provisions of Sections 871, 881 or 1446 of the
Internal Revenue Code (relating to withholding tax on foreign partners) do not
apply in respect of the Certificate held by the undersigned, the undersigned
hereby certifies:
Part I. Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a non-resident alien for
purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home address are:
------------------------
------------------------
------------------------; and
3. My (The Beneficial Owner's) U.S. taxpayer identification
number (Social Security Number) is .
-------------------------
D-8
B. Corporate, Partnership or Other Entity as Beneficial Owner
1. (Name of the Beneficial Owner) is not a foreign corporation,
foreign partnership, foreign trust or foreign estate (as
those terms are defined in the Code and Treasury
Regulations;
2. The Beneficial Owner's office address and place of
incorporation (if applicable) is
------------------------; and
3. The Beneficial Owner's U.S. employer identification number
is .
----------------------
Part II. Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:
an IRS Form W-9
---------
a form such as this or substantially similar
---------
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least thirty (30) days prior to the date that the
form relied upon becomes obsolete, and (ii) in connection with change in
Beneficial Owners, the undersigned agrees to submit a new Certificate of
Non-Foreign Status to the Trust promptly after such change.
Part III. Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Trust within sixty (60) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate may
be disclosed to the Internal Revenue Service by the Trust and any false
statement contained therein could be punishable by fines, imprisonment or both.
D-9
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.
---------------------------------
Name
---------------------------------
Title (if applicable)
---------------------------------
Signature and Date
*Note: If signed pursuant to a power of attorney, the power of attorney must
accompany this certificate.
D-10
EXHIBIT I
FORM OF RULE 144A INVESTMENT REPRESENTATION
-------------------------------------------
Description of Rule 144A Securities, including numbers:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the
"Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the Owner
Trustee, the Certificate Registrar and the Depositor (as defined in the [Trust
Agreement (the "Agreement"), dated as of ____________], among [MortgageIT
Securities Corp., as Depositor, Wilmington Trust Company, as Owner Trustee, and
Xxxxx Fargo Bank, National Association in its capacity as Securities
Administrator, as Certificate Registrar and Certificate Paying Agent]) pursuant
to Section [3.04] of the Agreement and Deutsche Bank National Trust Company, as
indenture trustee, as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding the
Rule 144A Securities that it has requested from the Seller, the Indenture
Trustee, the Owner Trustee or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the
C-1
Rule 144A Securities or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with respect
to the Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of
the Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the
1933 Act or require registration pursuant thereto, nor will it act, nor has
it authorized or will it authorize any person to act, in such manner with
respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for its own account
or the accounts of other qualified institutional buyers, understands that
such Rule 144A Securities may be resold, pledged or transferred only (i) to
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
3. The Buyer warrants and represents to, and covenants with, the
Seller, the Indenture Trustee, Owner Trustee, the Certificate Registrar, Master
Servicer and the Depositor that either (1) the Buyer is (A) not an employee
benefit plan (within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), or a plan (within the
meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code")),
which (in either case) is subject to ERISA or Section 4975 of the Code (both a
"Plan"), and (B) is not directly or indirectly purchasing the Rule 144A
Securities on behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with "plan assets" of a Plan, or (2) the Buyer understands that
registration of transfer of any Rule 144A Securities to any Plan, or to any
Person acting on behalf of any Plan, will not be made unless such Plan delivers
an opinion of its counsel, addressed and satisfactory to the Certificate
Registrar, the Owner Trustee, the Master Servicer, the Seller, the Servicer and
the Depositor, to the effect that the purchase and holding of the Rule 144A
Securities by, on behalf of or with "plan assets" of any Plan is permissible
under applicable law, would not constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code, and would not subject the Depositor,
the Owner Trustee, the Securities Administrator, the Certificate Registrar, the
Seller, the Servicer or the Master Servicer to any obligation or liability
(including liabilities under ERISA or Section 4975 of the Code) in addition to
those undertaken in the Agreement, which Opinion of Counsel shall not be an
expense of the Depositor, the Owner Trustee, the Securities Administrator, the
Certificate Registrar, the Seller, the Servicer or the Master Servicer.
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
--------------------------------- --------------------------------
C-2
Print Name of Seller Print Name of Buyer
By: By:
-------------------------------- --------------------------------
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
-------------------------------- --------------------------------
Date: Date:
------------------------------ ------------------------------
C-3
ANNEX 1 TO EXHIBIT I
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $_____ (1) in securities (except for the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A) and (ii) the Buyer
satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
C-4
___ Investment Adviser. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers Act
of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit Notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
_____ _____ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
C-5
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
--------------------------------
Print Name of Buyer
By:
---------------------------
Name:
Title
Date:
---------------------------
C-6
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) bank deposit Notes and certificates of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
C-7
-------------------------------------
Print Name of Buyer
By:
---------------------------------
Name:
Title:
IF AN ADVISER:
-------------------------------------
Print Name of Buyer
Date:
--------------------------------
C-8
EXHIBIT J
FORM OF ERISA LETTER
--------------------
[DATE]
[Wilmington Trust Company, as Owner Trustee
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Square North
Wilmington, Delaware 19890]
[Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000]
Re: Proposed Transfer of Trust Certificates,
MortgageIT Trust 200[_]-[_] (the "Certificates")
------------------------------------------------
Gentlemen:
This certification is being made by (the "Transferee") in connection
with the proposed Transfer by MortgageIT Holdings, Inc. (the "Transferor") of a
trust certificate (the "Trust Certificate") representing __% fractional
undivided interest in MortgageIT Trust 200[_[-[_] (the "Trust") created pursuant
to a [Trust Agreement, dated as of __________] (as amended, being referred to
herein as the "Trust Agreement") among [MortgageIT Securities Corp. (the
"Company"), Wilmington Trust Company, as Owner Trustee (the "Owner Trustee") and
Xxxxx Fargo Bank, National Association, in its capacity as Securities
Administrator, as certificate registrar and certificate paying agent (the
"Certificate Registrar")]. Initially capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement. The Transferee
hereby certifies, represents and warrants to, and covenants with, the Company,
the Owner Trustee and the Certificate Registrar that:
(i) either (a) or (b) is satisfied, as marked below:
___ a. The Transferee is not any employee benefit plan subject
to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the Internal Revenue Code of 1986 (the "Code"), a Person
acting, directly or indirectly, on behalf of any such plan or any
Person acquiring such Certificates with "plan assets" of a Plan within
the meaning of the Department of Labor regulation promulgated at 29
C.F.R. ss.2510.3-101; or
___ b. The Transferee is an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the Internal Revenue Code of 1986 (the "Code"), a Person
acting, directly or indirectly, on behalf of any such plan or any
Person acquiring such Certificates with "plan assets" of a Plan within
the meaning of the Department of Labor regulation promulgated at 29
C.F.R. ss.2510.3-101 and will provide the Depositor, the Owner Trustee,
the Securities Administrator, the Certificate Registrar and the Master
Servicer with an Opinion of Counsel, satisfactory to the Depositor, the
Owner Trustee, the Securities Administrator, the Certificate Registrar
and the Master Servicer, to the effect that the purchase and holding of
a Certificate by or on behalf of the Transferor is permissible under
applicable law, will not constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments)
F-1
and will not subject the Depositor, the Owner Trustee, the Securities
Administrator, the Certificate Registrar, the Seller, the Servicer or
the Master Servicer to any obligation or liability (including
liabilities under ERISA or Section 4975 of the Code) in addition to
those undertaken in the Trust Agreement, which Opinion of Counsel shall
not be an expense of the Depositor, the Owner Trustee, the Securities
Administrator, the Certificate Registrar, the Seller, the Servicer or
the Master Servicer; and
(ii) the Transferee is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406
and 407 of ERISA and Section 4975 of the Code and understands that each
of the parties to which this certification is made is relying and will
continue to rely on the statements made in this paragraph.
Very truly yours,
By: _____________________________
Name: _____________________________
Title: _____________________________
F-2
SCHEDULE 1
LEGAL PROCEEDINGS
On February 16, 2006, EMC Mortgage Corp. ("EMC") filed suit against
MortgageIT, Inc. ("MortgageIT") in the 95th Judicial District Court of Dallas
County, Texas. This suit alleges, among other things, that MortgageIT is
obligated to repurchase from EMC approximately $70.5 million in sub-prime
mortgage loans sold to EMC pursuant to a Mortgage Loan Purchase and Interim
Servicing Agreement dated January 1, 2003, as amended, due to alleged breaches
of representations and warranties as well as alleged early payment default
repurchase obligations with respect to such loans. The case was subsequently
removed to the U.S. District Court for the Northern District of Texas, Dallas
Division. MortgageIT is in the process of evaluating the claims and potential
counterclaims, and intends to vigorously defend the suit. At this stage of the
proceedings, it is not possible to predict the outcome of this litigation.
On September 29, 2004, as amended on October 12, 2004, an action was
filed in the U.S. District Court for the Southern District of New York against
our subsidiary, MortgageIT, and IPI Skyscraper Mortgage, which was, at the time,
a subsidiary of, and has now been merged with and into, MortgageIT. The case was
filed by four former loan officers of a MortgageIT branch in Newburgh, New York,
and seeks to recover allegedly unpaid minimum wage and overtime under both
federal and New York labor laws. The case was filed as a putative class action;
a motion for certification of a class under New York law and for collective
action under federal law was filed on March 11, 2005. We opposed the motion,
which remains pending, and we are vigorously asserting our defenses in this
action. At this stage of the proceedings, it is not possible to predict the
ultimate outcome of this litigation.
F-3
SCHEDULE 2
LIST OF DELAWARE STATUTORY TRUSTS
MortgageIT Trust 2004-1
MortgageIT Trust 2004-2
MortgageIT Trust 2005-1
MortgageIT Trust 2005-2
MortgageIT Trust 2005-3
MortgageIT Trust 2005-4
MortgageIT Trust 2005-5
F-4