EXHIBIT 10.16.1
AMENDED AND RESTATED ADDENDUM TO
MASTER REPURCHASE AGREEMENT
Dated as of November 22, 2005
Between
AMERICAN HOME MORTGAGE CORP.
and
AMERICAN HOME MORTGAGE SERVICING, INC.
as a Seller,
and
AHM SPV I, LLC
as Buyer
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................1
Section 1.01. Certain Defined Terms.......................................1
Section 1.02. Other Terms................................................20
ARTICLE II AMOUNTS AND TERMS OF PURCHASES.....................................21
Section 2.01. Facility...................................................21
Section 2.02. Making Purchases...........................................21
Section 2.03. Margin Maintenance.........................................22
Section 2.04. Collections................................................23
Section 2.05. Repurchase or Substitution Procedures......................24
Section 2.06. Payments and Computations, Etc.............................25
Section 2.07. Intent of the Sellers and the Buyer........................25
Section 2.08. No Segregation of Assets...................................26
Section 2.09. Substitution...............................................27
ARTICLE III CONDITIONS OF PURCHASES...........................................27
Section 3.01. Conditions Precedent to Initial Purchase from the Sellers..27
Section 3.02. Conditions Precedent to All Purchases......................28
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................29
Section 4.01. Representations of the Sellers.............................29
ARTICLE V COVENANTS...........................................................34
Section 5.01. Financial Statements and Reports...........................34
Section 5.02. Taxes and Other Liens......................................35
Section 5.03. Maintenance................................................36
Section 5.04. Further Assurances.........................................36
Section 5.05. Insurance..................................................36
Section 5.06. Accounts and Records.......................................37
Section 5.07. Periodic Visits............................................37
Section 5.08. Notice of Certain Events...................................38
Section 5.09. Performance of Certain Obligations.........................38
Section 5.10. Notice of Default..........................................38
Section 5.11. Compliance with Laws and Material Agreements...............38
Section 5.12. Deposits of Proceeds.......................................38
Section 5.13. Closing Instructions.......................................39
Section 5.14. Special Affirmative Covenants Concerning Transferred
Mortgage Assets............................................39
Section 5.15. Limitations on Mergers and Dissolutions....................39
Section 5.16. Fiscal Year................................................39
Section 5.17. Actions with Respect to Transferred Mortgage Assets. The
Sellers shall not:.........................................39
Section 5.18. Tangible Net Worth.........................................40
Section 5.19. Employee Benefit Plans.....................................40
Section 5.20. Change of Principal Office and Organization................40
Section 5.21. [Reserved].................................................40
Section 5.22. Delivery of Wet Loans......................................40
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Section 5.23. Change in Business.........................................41
Section 5.24. Separate Conduct of Business...............................41
Section 5.25. Sales, Liens, Etc..........................................41
Section 5.26. Operations and Properties..................................41
Section 5.27. Performance Guarantor Credit Rating........................41
Section 5.28. Xxxxxx.....................................................41
Section 5.29. Environmental Compliance...................................42
Section 5.30. Approved Take-Out Investor Concentration Limits............42
ARTICLE VI COVENANTS..........................................................42
Section 6.01. Servicing..................................................42
Section 6.02. Releases of Mortgage Notes for Servicing...................43
ARTICLE VII EVENTS OF DEFAULT.................................................43
Section 7.01. Events of Default..........................................43
Section 7.02. Remedies...................................................45
ARTICLE VIII INDEMNIFICATION..................................................48
Section 8.01. Indemnities by the Sellers.................................48
ARTICLE IX MISCELLANEOUS......................................................50
Section 9.01. Amendments, Etc............................................50
Section 9.02. Notices, Etc...............................................50
Section 9.03. Binding Effect; Assignability..............................50
Section 9.04. Costs, Expenses and Taxes, Expenses and Taxes..............51
Section 9.05. No Proceedings.............................................51
Section 9.06. GOVERNING LAW..............................................52
Section 9.07. Third Party Beneficiary....................................52
Section 9.08. Execution in Counterparts..................................52
Section 9.09. Repurchase Transactions....................................52
Section 9.10. Consent to Jurisdiction; Waiver of Immunities..............52
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EXHIBITS
EXHIBIT A-I Form of Deferred Purchase Price Note for AMERICAN HOME
MORTGAGE CORP.
EXHIBIT A-II Form of Deferred Purchase Price Note for AMERICAN HOME
MORTGAGE SERVICING, INC.
EXHIBIT B-I Form of Xxxx of Sale for AMERICAN HOME MORTGAGE CORP.
EXHIBIT B-II Form of Xxxx of Sale for AMERICAN HOME MORTGAGE SERVICING,
INC.
SCHEDULES
SCHEDULE I Trade Names
SCHEDULE II Approved Take-Out Investors
SCHEDULE III Litigation
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AMENDED AND RESTATED ADDENDUM TO MASTER REPURCHASE AGREEMENT
This Amended and Restated Addendum to Master Repurchase Agreement,
dated as of November 22, 2005, (this "Agreement"), is made by and among AMERICAN
HOME MORTGAGE CORP., a New York corporation, AMERICAN HOME MORTGAGE SERVICING,
INC., a Maryland corporation (hereinafter, together with their successors and
assigns, the "Sellers") and AHM SPV I, LLC, a Delaware limited liability company
(hereinafter, together with its successors and assigns, the "Buyer").
RECITALS
(1) Certain terms which are capitalized and used throughout this
Agreement (in addition to those defined above) are defined in Article I of this
Agreement or, if not defined therein, in the Master Repurchase Agreement.
(2) The Sellers and Buyer have entered into that certain Master
Repurchase Agreement, dated as of August 8, 2003, and the Addendum thereto lieu
of Annexes I-VII referred to in the Master Repurchase Agreement in order to
supplement and amend the Master Repurchase Agreement to enter Transactions
involving Mortgage Assets (as defined below) (together, the "Master Repurchase
Agreement").
(3) As of August 8, 2003, the Buyer and Sellers supplemented and
amended the Master Repurchase Agreement with an Addendum to Master Repurchase
Agreement.
(4) The Addendum to Master Repurchase Agreement is in lieu of the
amended and restated Annexes I-VII referred to in the Master Repurchase
Agreement.
(5) The parties desire to amend and restate the Addendum to Master
Purchase Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Adjusted Consolidated Funded Debt" means, on any date of
determination, the sum of (a) the Consolidated Funded Debt of AHMIC and any
other Person which would be reflected on the consolidated balance sheet of AHMIC
prepared in accordance with GAAP if such balance sheet were prepared as of such
date of determination, less (b) 50% of any Subordinated Debt, less (c) the
mortgage debt associated with the building and the land located at 000
Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx.
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"Administrative Agent" means Calyon, in its capacity as administrative
agent for the Lenders, or any successor administrative agent.
"Administrative Agent Fee Letter" is defined in the Loan Agreement.
"Advance" means any amount disbursed by the Lenders to the Borrower,
whether such amount constitutes an original disbursement of funds to the
Borrower under this Agreement or a continuation of an amount outstanding.
"Advance Rate" means (i) with respect to a Conforming Loan ninety-eight
percent (98%) or, if a Conforming FICO Score Trigger Event or Conforming
Loan-to-Value Ratio Trigger Event has occurred and is continuing, as reported to
the Collateral Agent by the Administrative Agent, then zero, (ii) with respect
to a Jumbo Loan (other than a Super Jumbo Loan), ninety-eight percent (98%) or
if a Non-Conforming FICO Score Trigger Event or Non-Conforming Loan-to-Value
Ratio Trigger Event has occurred and is continuing, as reported to the
Collateral Agent by the Administrative Agent, then zero; (iii) with respect to a
Super Jumbo Loan, ninety-five percent (95%), or if a Non-Conforming FICO Score
Trigger Event or Non-Conforming Loan-to-Value Ratio Trigger Event has occurred
and is continuing, as reported to the Collateral Agent by the Administrative
Agent, then zero and (iv) with respect to an Alt-A Loan, ninety-seven percent
(97%) or, if a Non-Conforming FICO Score Trigger Event or Non-Conforming
Loan-to-Value Ratio Trigger Event has occurred and is continuing, as reported to
the Collateral Agent by the Administrative Agent, then zero.
"Advanced Funds" means funds advanced to an escrow agent for purposes
of funding a Mortgage Loan to be pledged hereunder.
"Adverse Claim" means a lien, security interest, or other charge or
encumbrance, or any other type of preferential arrangement.
"Affiliate" of any Person means (a) any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person, or (b) any other Person who is a director, officer or employee (i) of
such Person, or (ii) of any Person described in the preceding clause (a). For
purposes of this definition, the term "control" (and the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession or ownership, directly or indirectly, of the power either (x) to
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise, or (y) vote 10% or more of the securities
having ordinary power in the election of directors of such Person.
"Aggregate Collateral Value" means an amount equal to the sum of the
products of the book values (as determined in accordance with GAAP) of the
consolidated assets of AHMIC and its Subsidiaries, such assets being categorized
in the classes set forth on the calculation schedule that is part of Exhibit E
attached to the Credit Agreement, times the percentage multiplier for each such
class set forth on such calculation schedule.
"Agreement" means this Amended and Restated Addendum to Master
Repurchase Agreement, as amended, modified or supplemented from time to time.
"AHMIC" means American Home Mortgage Investment Corp., a Maryland
corporation.
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"Alt-A Loan" means a Mortgage Loan (other than a Conforming Loan or a
Jumbo Loan) that (1) does not conform to the conventional underwriting standards
of Xxxxxx Xxx, Xxxxxxx Mac or Xxxxxx Mae but that is underwritten in a manner
designed to be purchased by an Approved Take-Out Investor (other than Xxxxxx
Xxx, Xxxxxxx Mac or Xxxxxx Mae), within guidelines generally acceptable to
industry norms for "Alt-A" loans, (2) has a demonstrated secondary market and is
readily securitizable, and (3) matches all applicable requirements for purchase
under the requirements of a Take Out Commitment or Hedge specifically issued for
the purchase of such Mortgage Loan.
"Alternate Base Rate" means, with respect to any Group Bank on any
date, a fluctuating rate of interest per annum equal to the higher of:
(a) the rate of interest most recently announced by such Group
Bank as its base rate, changing when and as said base rate changes;
or
(b) the Federal Funds Rate (as defined below) most recently
determined by the Administrative Agent plus 1.0% per annum.
For purposes of this definition, "Federal Funds Rate" means, for any
period, a fluctuating interest rate per annum equal (for each day during such
period) to (i) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the immediately preceding Business Day) by the Federal Reserve Bank of New
York; or (ii) if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent from three federal funds brokers of recognized standing
selected by it. The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest determined by any Group Bank in connection with
extensions of credit.
"Amsterdam" has the meaning specified in the preamble of this
Agreement.
"Approved Hedge Counterparty" means:
(a) Xxxxxx Xxx, Xxxxxxx Mac or Xxxxxx Mae, or
(b) any Person with short-term ratings of at least P-1 from
Xxxxx'x and either at least A-1 from S&P or at least F1 from Fitch, or
long-term unsecured debt ratings (or in the case of a bank without such
ratings that is the principal subsidiary of a bank holding company, the
rating of the bank holding company) of at least Aa2 by Xxxxx'x, and
either at least AA from S&P or at least AA from Fitch, or
(c) any Person with short-term ratings of at least P-1 from
Xxxxx'x, and either at least A-1 from S&P or at least F1 from Fitch, or
long-term unsecured debt ratings (or in the case of a bank without such
ratings that is the principal subsidiary of a bank holding company, the
rating of the bank holding company) of at least A2 from Xxxxx'x, and
either at least A from S&P or at least A from Fitch, limited to a
concentration limit of 50% of the concentration percentage for such
Person as shown on Schedule II, or such other concentration percentage
approved by the Majority Banks, or
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(d) all other Persons as may be approved by the Majority
Banks, which approvals may be subject to certain concentration limits;
provided that (i) except for an Approved Hedge Counterparty defined
above in section (d), if an Approved Hedge Counterparty has a short-term rating
or a long-term unsecured debt rating at the time such Person becomes an
"Approved Hedge Counterparty" and such Person's short-term ratings or long-term
unsecured debt ratings are subsequently downgraded or withdrawn, such Person
shall cease to be an "Approved Hedge Counterparty"; provided, further, that with
respect to any Xxxxxx issued by such Person prior to the date of such downgrade
or withdrawal, such Person shall cease to be an "Approved Hedge Counterparty"
sixty (60) days following such downgrade or withdrawal; and (ii) if an Approved
Hedge Counterparty does not have a short-term rating or a long-term unsecured
debt rating, such Person shall cease to be an "Approved Hedge Counterparty" upon
prior written notice from the Administrative Agent which shall provide such
notice if the Administrative Agent has (or if the Majority Banks notify the
Administrative Agent that they have) good faith concerns about the future
performance of such Person; provided, further, that with respect to any Xxxxxx
issued by such Person prior to such notice, such Person shall cease to be an
"Approved Hedge Counterparty" sixty (60) days following such notice.
"Approved Take-Out Investor" means:
(a) Xxxxxx Xxx, Xxxxxxx Mac or Xxxxxx Mae, or
(b) any Person with short-term ratings of at least P-1 from
Xxxxx'x, and either at least A-1 from S&P or at least F1 from Fitch, or
long-term unsecured debt ratings (or in the case of a bank without such
ratings that is the principal subsidiary of a bank holding company, the
rating of the bank holding company) of at least Aa2 by Xxxxx'x, and
either at least AA from S&P, or at least AA from Fitch, or
(c) any Person with short-term ratings of at least P-1 from
Xxxxx'x and either at least A-1 from S&P or at least F1 from Fitch, or
long term unsecured debt ratings (or in the case of a bank without such
ratings that is the principal subsidiary of a bank holding company, the
rating of the bank holding company) of at least A2 from Xxxxx'x, and
either at least A from S&P or at least A from Fitch, limited to a
concentration limit of 50% of the concentration percentage for such
Person as shown on Schedule II, or such other concentration percentage
approved by the Majority Banks, or
(d) all other Persons as may be approved by the Majority
Banks, which approvals may be subject to certain concentration limits;
provided that (i) except for an Approved Take-Out Investor defined
above in section (d), if an Approved Take-Out Investor has a short-term rating
or a long-term unsecured debt rating at the time such Person becomes an
"Approved Take-Out Investor" and such Person's short-term ratings or long-term
unsecured debt ratings are subsequently downgraded or withdrawn, such Person
shall cease to be an "Approved Take-Out Investor"; provided, further, that with
respect to any Take-Out Commitments issued by such Person prior to the date of
such downgrade or withdrawal, such Person shall cease to be an "Approved
Take-Out Investor" sixty (60) days
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following such downgrade or withdrawal; and (ii) if an Approved Take-Out
Investor does not have a short-term rating or a long-term unsecured debt rating,
such Person shall cease to be an "Approved Take-Out Investor" upon prior written
notice from the Administrative Agent which shall provide such notice if the
Administrative Agent has (or if the Majority Banks notify the Administrative
Agent that they have) good faith concerns about the future performance of such
Person; provided, further, that with respect to any Take-Out Commitments issued
by such Person prior to such notice, such Person shall cease to be an "Approved
Take-Out Investor" sixty (60) days following such notice.
As of the date of this Agreement, Schedule II hereto sets forth the
Approved Take-Out Investors pursuant to the preceding clauses (b) and (c) (and
any applicable concentration limits). Schedule II shall be updated from time to
time as Approved Take-Out Investors are added or deleted or concentration limits
are changed pursuant to the preceding clauses (b) and (c).
"Assignment and Acceptance" has the meaning set forth in the Loan
Agreement.
"Bank" means each of Calyon, Lloyds, ABN AMRO, SG and JPMorgan and each
respective Eligible Assignee (as defined in the Loan Agreement) that shall
become a party to the Loan Agreement pursuant to an Assignment and Acceptance
and in accordance with section 13.9 of the Loan Agreement.
"Xxxxxx" has the meaning ascribed to it in the Loan Agreement.
"Business Day" means (a) a day on which (i) commercial banks in Xxx
Xxxx Xxxx, Xxx Xxxx xxx Xxxxxxx, Xxxxxxxx are not authorized or required to be
closed and (ii) commercial banks in the State in which the Collateral Agent has
its principal office are not authorized or required to be closed, and (b) if
this definition of "Business Day" is utilized in connection with a Eurodollar
Advance, a day on which dealings in United States dollars are carried out in the
London interbank market.
"Calyon" means Calyon New York Branch and its successors and assigns.
"Calyon Group" means LaFayette, and each Group Bank of LaFayette.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means Property that is subject to a Lien for the benefit
of the holders of the Obligations.
"Collateral Agency Agreement" means the Amended and Restated Collateral
Agency Agreement, dated as of the date hereof, among the Buyer, as borrower, the
Collateral Agent and the Administrative Agent, substantially in the form of
Exhibit D to the Loan Agreement, as amended, supplemented, restated or otherwise
modified from time to time.
"Collateral Agent" means Deutsche Bank National Trust Company, and its
successors and assigns.
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"Collateral Value" means
(A) with respect to each Eligible Mortgage Loan and at all
times, an amount equal to the Advance Rate for such Eligible Mortgage
Loan times the least of:
(1) the lesser of the original principal amount of
such Eligible Mortgage Loan or the acquisition price paid by the
related Originator on the closing and funding of such Eligible Mortgage
Loan;
(2) a ratable amount determined by multiplying (a)
the weighted average Market Value of all Mortgage Loans owned by the
Originators or the Borrower, as reflected on the most recent Collateral
Agent Daily Report (it being understood that the Servicer shall provide
to the Collateral Agent such Market Values as of the close of business
on the last Business Day of the previous week) (or, while a Default or
Event of Default is continuing, more frequently if so directed by the
Administrative Agent) times (b) the original principal amount of such
Eligible Mortgage Loan; and
(3) while a Default or Event of Default is continuing
or upon the direction of any Managing Agent, the Market Value of such
Eligible Mortgage Loan; and
(B) with respect to the Collection Account, the balance of
collected funds therein that is not subject to any Lien in favor of any
Person other than the Lien in favor of the Administrative Agent for the
benefit of the holders of the Obligations;
provided, however, that
(a) at any time, the portion of total Collateral Value that
may be attributable to Jumbo Loans shall not exceed fifty percent (50%)
of the Maximum Facility Amount;
(b) at any time, the portion of total Collateral Value that
may be attributable to Super Jumbo Loans shall not exceed three percent
(3%) of the Maximum Facility Amount, which percentage is a sublimit of
the limitation set forth in clause (a), equal to 6% of the 50% set
forth in clause (a) above;
(c) at any time, the portion of total Collateral Value that
may be attributable to Alt-A Loans shall not exceed thirty-five percent
(35%) of the Maximum Facility Amount;
(d) at any time, the portion of total Collateral Value that
may be attributable to Non-Conforming Loans shall not exceed fifty
percent (50%) of the Maximum Facility Amount;
(e) at any time, the portion of total Collateral Value that
may be attributable to Mortgage Loans with a Loan-to-Value Ratio
greater than 95% shall not exceed five percent (5%) of the Maximum
Facility Amount;
(f) at any time, the portion of total Collateral Value that
may be attributable to Eligible Mortgage Loans (a) with a FICO Score
less than or equal to 640 shall not exceed
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twenty-five percent (25%) of the Maximum Facility Amount and (b) with a
FICO Score less than or equal to 620 shall not exceed five percent (5%)
of the Maximum Facility Amount;
(g) at any time, the portion of total Collateral Value that
may be attributable to Mortgage Loans for which the Mortgage Notes have
been withdrawn pursuant to Section 3.5 of the Collateral Agency
Agreement shall not exceed 2.5% of the Maximum Facility Amount;
(h) [Reserved]
(i) at any time, the portion of total Collateral Value that
may be attributable to Mortgage Loans that have been Eligible Mortgage
Loans owned by the Borrower for more than 90 days shall be zero;
provided that, this clause (i) shall not apply to 5% of the total
Collateral Value that may be attributable to Mortgage Loans that have
been Eligible Mortgage Loans owned by the Borrower for more than 90
days but less than 180 days;
(j) a Mortgage Loan that ceases to be an Eligible Mortgage
Loan shall have a Collateral Value of zero;
(k) at any time, (A) except the first five and last five
Business Days of any month, the portion of total Collateral Value that
may be attributable to Wet Loans shall not exceed thirty percent (30%)
of the Maximum Facility Amount, and (B) during the first five and last
five Business Days of any month, the portion of total Collateral Value
that may be attributable to Wet Loans shall not exceed fifty percent
(50%) of the Maximum Facility Amount (it being understood that on any
day the Collateral Value of a Wet Loan with respect to which the
related Principal Mortgage Documents have not been delivered to the
Collateral Agent within nine (9) Business Days after the date of
origination of the Wet Loan shall be zero until such Principal Mortgage
Documents are so delivered).
(l) at any time, a Mortgage Loan with respect to which the
related Obligor is sixty (60) days or more in payment default, shall
have a Collateral Value of zero.
"Collection Account" means the account established by the Buyer
pursuant to Section 2.7(b) of the Loan Agreement.
"Collections" means, with respect to any Mortgage Asset, all cash
collections (other than in respect of escrows for taxes and insurance premiums
payable under the related Mortgage Loan) and other cash proceeds of such
Mortgage Asset.
"Confirmation" is defined in Section 2.02(a) hereto.
"Conforming FICO Score Trigger Event" means, with respect to Conforming
Loans, that (A)(i) the Conforming Pool Weighted Average FICO Score has been
reported, in a Collateral Agent Daily Report, as less than 675 but more than
650, (ii) a period of ten (10) days has elapsed from the date of receipt of such
report by the Administrative Agent and (iii) the Servicer has not provided to
the Administrative Agent a revised Conforming Pool Weighted Average FICO Score
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that is at least 675 or (B)(i) the Conforming Pool Weighted Average FICO Score
has been reported, in a Collateral Agent Daily Report, as less than 650, (ii) a
period of five (5) days has elapsed from the date of receipt of such report by
the Administrative Agent and (iii) the Servicer has not provided to the
Administrative Agent a revised Conforming Pool Weighted Average FICO Score that
is at least 675.
"Conforming Loan" means (i) a Mortgage Loan that complies with all
applicable requirements for purchase under a Xxxxxx Mae, Xxxxxxx Mac or other
similar Governmental Authority standard form of conventional mortgage loan
purchase contract, then in effect, or (ii) an FHA Loan or a VA Loan.
"Conforming Loan-to-Value Ratio Trigger Event" means, with respect to
Conforming Loans, that (A)(i) the weighted average Loan-to-Value Ratio has been
reported, in a Collateral Agent Daily Report, as greater than 83% but equal to
or less than 90%, (ii) a period of ten (10) days has elapsed from the date of
receipt of such report by the Administrative Agent and (iii) the Servicer has
not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83% or (B)(i) the weighted
average Loan-to-Value Ratio has been reported, in a Collateral Agent Daily
Report, as greater than 90%, (ii) a period of five (5) days has elapsed from the
date of receipt of such report by the Administrative Agent and (iii) the
Servicer has not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83%.
"Conforming Pool Weighted Average FICO Score" means the ratio of (a)
the sum, for all Conforming Loans, of the product for each Conforming Loan of
(i) its FICO Score and (ii) its original principal balance to (b) the sum of the
original principal balances of all Conforming Loans.
"Credit and Collection Policy" has the meaning ascribed to the term
Originator's Credit and Collection Policy as set forth in the Loan Agreement.
"Debtor Laws" means all applicable liquidation, conservatorship,
bankruptcy, fraudulent transfer or conveyance, moratorium, arrangement,
receivership, insolvency, reorganization or similar laws from time to time in
effect affecting the rights of creditors generally.
"Default" means any condition or event that, with the giving of notice
or lapse of time or both and unless cured or waived, would constitute an Event
of Default.
"Default Rate" has the meaning ascribed to such term in the Loan
Agreement.
"Deferred Purchase Price" means the portion of the Purchase Price of
Purchased Mortgage Assets purchased on any Purchase Date exceeding the amount of
the Purchase Price under Section 2.02 to be paid in cash. The obligations of the
Buyer in respect of the Deferred Purchase Price shall be evidenced by the
Buyer's subordinated promissory note in the form of Exhibit A-I or Exhibit A-II
hereto.
"Delinquent Mortgage Loan" means a Mortgage Asset under which the
Obligor is 30 or more days in payment default or the Obligor has taken any
action, or suffered any event of the type described in Sections 8.1(f), 8.1(g)
or 8.1(h) of the Loan Agreement or is in foreclosure.
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"Delinquent Ratio" means as of the end of any Collection Period, the
ratio of (i) the principal amount of all Mortgage Loans that were Delinquent
Mortgage Loans at such time, to (ii) the aggregate principal amount of all
Mortgage Loans at such time.
"Eligible Institution" means any depository institution, organized
under the laws of the United States or any state, having capital and surplus in
excess of $200,000,000, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation and that is
subject to supervision and examination by federal or state banking authorities;
provided that such institution also must have short-term debt ratings no lower
than P-1 by Xxxxx'x and A-1 by S&P and, if rated, F1 by Fitch. If such
depository institution publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
"Eligible Mortgage Asset" means an Eligible Mortgage Loan.
"Eligible Mortgage Collateral" means Eligible Mortgage Loans and the
Collection Account.
"Eligible Mortgage Loan" means a Mortgage Loan:
(a) that (i) is a closed and fully funded Mortgage Loan, (ii) has
a maximum term to maturity of 30 years and the proceeds of which were used
either to finance a portion of the purchase price of a Property encumbered by
the related Mortgage or to refinance a loan secured by such Property, (iii) is
secured by a perfected first-priority Lien on residential real Property
consisting of land and a one-to-four family dwelling thereon which is completed
and ready for owner occupancy, including townhouses and condominiums and (iv)
was underwritten according to the applicable Seller's Underwriting Guidelines
and was originated or purchased by one of the Originators;
(b) that is a Conforming Loan, a Jumbo Loan or an Alt-A Loan;
(c) in which the Administrative Agent has been granted and
continues to hold a perfected, first-priority, security interest for the benefit
of the holders of the Obligations;
(d) for which the Mortgage Note is payable to or endorsed (without
recourse) in blank and each of such Mortgage Loan and the related Mortgage Note
is a legal, valid and binding obligation of the Obligor thereof;
(e) for which, other than in respect of Wet Loans, the Principal
Mortgage Documents have been received by the Collateral Agent and are in form
and substance acceptable to the Collateral Agent;
(f) that, upon pledge thereof under this Agreement and application
of any related Advance to pay off any prior lienholder as required by the
Collateral Agency Agreement and hereunder, together with the related Mortgage
Loan Collateral, is owned beneficially by
9
Borrower free and clear of any Lien of any other Person other than the
Administrative Agent for the benefit of the holders of the Obligations;
(g) that, together with the related Mortgage Loan Collateral, does
not contravene any Governmental Requirements applicable thereto (including,
without limitation, the Real Estate Settlement Procedures Act of 1974, as
amended, and all laws, rules and regulations relating to usury,
truth-in-lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices, privacy and other applicable
federal, state and local consumer protection laws) and with respect to which no
party to the related Mortgage Loan Collateral is in violation of any
Governmental Requirements (or procedure prescribed thereby) if such violation
would impair the collectability of such Mortgage Loan or the saleability of such
Mortgage Loan under the applicable Take-Out Commitment or Hedge;
(h) that, (i) is not a Delinquent Mortgage Loan at the time it is
transferred to the Buyer hereunder; (ii) has not previously been sold to an
Approved Take-Out Investor or any of the Sellers and repurchased by Buyer; (iii)
if, it was a Wet Loan when it was assigned to the Borrower and the time periods
set forth in Section 2.3(c) of the Loan Agreement have occurred, the Principal
Mortgage Documents relating to such Wet Loan were delivered to the Collateral
Agent; provided, however, that, upon delivery of such Principal Mortgage
Documents to the Collateral Agent, such Mortgage Loans may subsequently qualify
as Eligible Mortgage Loans to support Borrowings subsequent to such delivery;
(iv) has a Loan-to-Value Ratio not in excess of 100%; or (v) has an original
principal balance not in excess of $2,500,000;
(i) that if the Mortgage Loan Collateral has been withdrawn for
correction pursuant to Section 6.02 such Mortgage Loan Collateral has been
returned to the Collateral Agent within 20 calendar days after withdrawal as
required by Section 6.02.
(j) that is denominated and payable in U.S. dollars in the United
States and the Obligor of which is a natural person who is a U.S. citizen or
resident alien or a corporation or an inter vivos revocable trust or other legal
entity organized under the laws of the United States or any State thereof or the
District of Columbia;
(k) that is not subject to any right of rescission, setoff,
counterclaim or other dispute whatsoever;
(l) that was acquired by the Buyer from any of the Sellers within
60 days after its Mortgage Origination Date;
(m) that is covered by the types and amounts of insurance required
by Section 5.06;
(n) with respect to which all representations and warranties made
by the Sellers in the Loan Agreement and this Agreement are true and correct in
all material respects and with respect to which all loan level covenants made in
the Loan Agreement and this Agreement have been complied with; and
(o) that is subjected to the following "Quality Control" measures
by personnel of each of the Sellers before the Mortgage Note is funded by any of
the Sellers:
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(i) for those Mortgage Loans not originated by any of
the Sellers, is subject to being selected at random for a review for
thoroughness and compliance (including truth-in-lending, good faith
estimates and other disclosures); and
(ii) with respect to which, all Mortgage Loan
Collateral is prepared by any of the Sellers and submitted to the
closing agent at the time of funding the related Mortgage Loan;
"Employee Plan" means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by each of the Sellers or any ERISA
Affiliate.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation, trade or business that is,
along with the Performance Guarantors, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Sections 414(b), (c), (m) and (o) of the Code, or Section 4001 of ERISA.
"Event of Default" has the meaning specified in Section 7.01.
"Facility" means the borrowing facility provided by the Lenders as
described in Section 2.1 of the Loan Agreement.
"Xxxxxx Xxx" means the government sponsored enterprise formerly known
as the Federal National Mortgage Association, or any successor thereto.
"FHA" means the Federal Housing Administration, or any successor
thereto.
"FHA Loan" means a Mortgage Loan, the ultimate payment of which is
partially or completely insured by the FHA or with respect to which there is a
current, binding and enforceable commitment for such insurance issued by the
FHA.
"FICO Score" means, with respect to the Obligor under a particular
Mortgage Loan, a credit rating established by Fair Xxxxx Corporation.
"Financial Officer" means (i) with respect to each of the Sellers, the
chief financial officer, treasurer or a vice president having the knowledge and
authority necessary to prepare and deliver the financial statements and reports
required pursuant to Section 5.02(b) and (ii) with respect to the Performance
Guarantors, the chief financial officer, the vice president - assistant
comptroller, vice president - assistant treasurer or the senior vice president -
comptroller.
"First Lien Mortgage Loan" means a loan secured by a perfected first
lien mortgage on real property.
"Fitch" means Fitch, Inc., and any successor thereto.
11
"Xxxxxxx Mac" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"Xxxxxx Mae" means the Government National Mortgage Association, or any
successor thereto.
"Governmental Authority" means any applicable nation or government, any
agency, department, state or other political subdivision thereof, or any
instrumentality thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Governmental Authority shall include, without limitation, each of Xxxxxxx Mac,
Xxxxxx Xxx, FHA, HUD, VA and Xxxxxx Mae.
"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, permit,
certificate, license, authorization or other requirement (including, without
limitation, any of the foregoing that relate to energy regulations and
occupational, safety and health standards or controls and any hazardous
materials laws) of any Governmental Authority that has jurisdiction over the
Sellers or any of their respective Properties.
"Group Bank" means (1) with respect to La Fayette, Calyon, each Bank
that has entered into an assignment and Acceptance with Calyon, including
Lloyds, and each assignee (directly or indirectly) of any such Bank, which
assignee has entered into an Assignment and Acceptance; (2) with respect to
Amsterdam, ABN AMRO, each Bank that has entered into an Assignment and
Acceptance with ABN AMRO and each assignee (directly or indirectly) of any such
Bank, which assignee has entered into an Assignment and Acceptance; (3) with
respect to Xxxxxx, XX, each Bank that has entered into an Assignment and
Acceptance with SG and each assignee (directly or indirectly) of any such Bank,
which assignee has entered into an Assignment and Acceptance; and (4) with
respect to Park Avenue, JPMorgan, each Bank that has entered into an Assignment
and Acceptance with JPMorgan and each assignee (directly or indirectly) of any
such Bank, which assignee has entered into an Assignment and Acceptance.
"Hedge" means a current, valid, binding, enforceable, written
commitment, including without limitation a forward purchase commitment, issued
by an Approved Hedge Counterparty, to purchase mortgage loans from one of the
Originators from time to time at a specified price (or a specified spread to an
agreed-upon index), which commitment is not subject to any term or condition (i)
that is not customary in commitments of like nature or (ii) that, in the
reasonably anticipated course of events, cannot be fully complied with prior to
the expiration thereof, in which a perfected security interest has been granted
to the Administrative Agent.
"Hedge Report" means, a report prepared by the Servicer prepared
pursuant to Section 3.6 of the Loan Agreement, showing, as of the close of
business on the last Business Day of each week, all Take-Out Commitments or
Xxxxxx obtained by the Originators to cover all closed loans owned by the
Originators or the Borrower, to the extent that such mortgage loans have been
pledged hereunder or pursuant to another lending arrangement, and certain
information
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with respect to such trades including such information as the Administrative
Agent may request, in the form of Exhibit K to the Loan Agreement. Each such
Take-Out Commitment or Hedge shall have been pledged to the Administrative
Agent; provided, however, that any Xxxxxx may have been pledged previously or
may be pledged in the future by the Originators on a pari passu basis.
"HUD" means the Department of Housing and Urban Development, or any
successor thereto.
"Indebtedness" means, for any Person, without duplication, and at any
time, (a) all obligations required by GAAP to be classified on such Person's
balance sheet as liabilities, (b) obligations secured (or for which the holder
of the obligations has an existing contingent or other right to be so secured)
by any Lien existing on property owned or acquired by such Person, (c)
obligations that have been (or under GAAP should be) capitalized for financial
reporting purposes, and (d) all guaranties, endorsements, and other contingent
obligations with respect to obligations of others.
"Indemnified Amounts" has the meaning specified in Section 8.01.
"Indemnified Party" has the meaning specified in Section 8.01.
"Interest Period" is defined the Loan Agreement.
"Issuer" means each of La Fayette Amsterdam, Xxxxxx and Park Avenue and
their respective successors and assigns.
"JPMorgan" means JPMorgan Chase Bank, as a Bank and as a Managing
Agent.
"Jumbo Loan" means a Mortgage Loan (other than a Conforming Loan) that
(1) is underwritten in a manner designed to be purchased by an Approved Take-Out
Investor (other than Xxxxxx Xxx, Xxxxxxx Mac or Xxxxxx Mae), (2) matches all
applicable requirements for purchase under the requirements of a Take-Out
Commitment or Hedge issued for the purchase of such Mortgage Loan, and (3)
differs from a Conforming Loan solely because the principal amount of such
Mortgage Loan exceeds the limit set for Conforming Loans by Xxxxxx Xxx or
Xxxxxxx Mac from time to time but shall not exceed $999,999; provided, however,
that a Jumbo Loan having an original principal balance in excess of $999,999 but
not more than $2,500,000 shall qualify as a Super Jumbo Loan. The term Jumbo
Loan includes Super Jumbo Loans.
"La Fayette" means La Fayette Asset Securitization LLC and its
successors and assigns.
"Lenders" means, collectively, the Issuers and the Banks.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (whether statutory, consensual or otherwise), or
other security arrangement of any kind (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 under the uniform commercial code or comparable law
of any jurisdiction in respect of any of the foregoing).
13
"Lloyds" has the meaning specified in the preamble of this Agreement.
"Loan Agreement" means the Amended and Restated Loan Agreement, dated
as of the date hereof, by and among the Buyer, as the Borrower, the Issuers
party thereto, the Banks party thereto, the Administrative Agent, the Managing
Agents and the Servicer, as amended, modified or supplemented from time to time.
"Loan to Value Ratio" means, with respect to any Mortgage Loan, the
fraction, expressed as a percentage found by dividing the original principal
balance of a Mortgage Loan by the value of the related mortgage property, such
value being measured by (i) the appraised value of such property at such time,
if the Mortgage Loan is a refinance of any existing lien or (ii) the lower of
the sales price of the related property at the time of origination of the
Mortgage Loan or the appraised value of such property at such time, if the
Mortgage Loan is a purchase money loan.
"Managing Agent" means, (a) with respect to La Fayette, Calyon or any
successor managing agent designated by such party; (b) with respect to
Amsterdam, ABN AMRO or any successor managing agent designated by such party;
(c) with respect to Park Avenue, JPMorgan or any successor managing agent
designated by such party; and (d) with respect to Xxxxxx, XX or any successor
managing agent designated by such party.
"Margin Deficit" is defined in Section 2.03(b) hereof.
"Market Value" means at the time determined, for any Mortgage Loan (a)
the market value of such Mortgage Loan determined by the Servicer based upon the
then most recent posted net yield for 30-day mandatory future delivery furnished
by Xxxxxx Xxx, Xxxxxxx Mac, Xxxxxx Xxx or another entity deemed most appropriate
by the Servicer and published and distributed by Telerate Mortgage Services, or,
if such posted net yield is not available from Telerate Mortgage Services, such
posted net yield obtained directly from Xxxxxx Mae, Xxxxxxx Mac, Xxxxxx Xxx or
another entity deemed most appropriate by the Servicer, or (b) if an appropriate
posted rate is not available, the value determined by the Servicer in good
faith, using commercially reasonable efforts, which efforts shall include
consulting with two or more entities that make a market in similar mortgage
loans, to determine such Market Value. Notwithstanding the foregoing, within
three (3) Business Days of the date upon which a Market Value determination is
provided, any Lender may dispute the Servicer's determination of Market Value in
writing to the Servicer and each of the Lenders. Upon receipt of such a notice,
the Servicer and the Lenders shall make a good faith effort to resolve the
discrepancy. If the discrepancy is not resolved within seven (7) days in a
manner satisfactory to each of the Lenders (an "Unresolved Dispute"), then the
Administrative Agent shall obtain a different market valuation (an "Additional
Determination"). At any time the Administrative Agent may, and upon an
Unresolved Dispute, shall, obtain an Additional Determination. If the
Administrative Agent shall have obtained an Additional Determination as of any
determination date (which Additional Determination may be from the
Administrative Agent or any Affiliate thereof) and the amount of the Additional
Determination as of such determination date is more than 0.50% less than the
amount of the aggregate Market Values determined by the Servicer on such
determination date, then, the amount of the Additional Determination shall be
used as the Market Value for purposes of clause (A)(2) and (A)(3) of the
definition of "Collateral Value." The Borrower shall be solely responsible for
the costs incurred with respect to such Additional Determinations. The
Administrative Agent shall
14
notify the Servicer of the variance between the Servicer's determination of the
Market Value and the Additional Determinations and the source(s) used by the
Administrative Agent to determine the Additional Determinations. Following such
notice and prior to the next determination date, either (i) the Servicer and the
Administrative Agent will determine a mutually acceptable, reasonable,
alternative valuation for the Market Value of such Mortgage Loan or (ii) the
Servicer shall use an amount equal to the Additional Determination as the Market
Value of such Mortgage Loan for subsequent determination dates until clause (i)
is satisfied in good faith.
"Material Adverse Effect" means, with respect to any Person, any
material adverse effect on (i) the validity or enforceability of this Agreement,
the Notes or any other Transaction Document, (ii) the business, operations,
total Property or financial condition of such Person, (iii) the Transferred
Mortgage Assets taken as a whole, (iv) the enforceability of the purchases of
Mortgage Assets under this Agreement free of any Adverse Claims, or (v) the
ability of such Person to fulfill its obligations under this Agreement or any
other Transaction Document.
"Maximum Facility Amount" is defined in the Loan Agreement.
"MERS" means Mortgage Electronic Registration Systems, Inc., a Delaware
corporation.
"MERS Designated Mortgage Loan" means a Mortgage Loan registered to or
by the related Originator on the MERS electronic mortgage registration system.
"Xxxxx'x" means Xxxxx'x Investors Service, Inc., and any successor
thereto.
"Mortgage" means a mortgage or deed of trust or other security
instrument creating a Lien on real property, on a standard form as approved by
Xxxxxx Mae, Xxxxxxx Mac or Xxxxxx Mae or such other form as any of the Sellers
determine is satisfactory for any Approved Take-Out Investor unless otherwise
directed by the Administrative Agent and communicated to the Collateral Agent.
"Mortgage Assets" means, collectively:
(a) any and all Mortgage Loans purchased by the Buyer
hereunder;
(b) any and all instruments, documents and other property
of every kind or description, of or in the name of any of the Sellers,
now or hereafter for any reason or purpose whatsoever, in the
possession or control of, or in transit to, the Collateral Agent;
(c) any and all general intangibles and Mortgage Loan
Collateral that relate in any way to the Mortgage Assets;
(d) any and all Take-Out Commitments and Xxxxxx
identified on Hedge Reports from time to time prepared by the Servicer
on behalf of any of the Sellers and the Buyer;
(e) any and all contract rights, chattel paper,
certificated securities, uncertificated securities, financial assets,
securities accounts or investment property which constitute proceeds of
the Mortgage Assets;
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(f) this Agreement, the Performance Guaranties and the
Subordination Agreement, including all moneys due or to become due
thereunder, claims of each of the Sellers arising out of or for breach
or default thereunder, and the right of each of the Sellers to compel
performance and otherwise exercise all remedies thereunder;
(g) any Advanced Funds; and
(h) any and all proceeds of any of the foregoing,
including all Collections.
"Mortgage File" means the mortgage documents pertaining to a particular
Mortgage Loan and any additional documents required to be included in or added
to the Mortgage File pursuant to the Loan Agreement.
"Mortgage Loan" means a loan evidenced by a Mortgage Note and secured
by a Mortgage, the beneficial interest of which has been acquired by the Buyer
from any of the Sellers by purchase pursuant to this Agreement (with the record
owner thereof being such Seller or, in the case of a MERS Designated Mortgage
Loan, MERS as nominee for such Seller, and its successors and assigns).
"Mortgage Loan Collateral" means all Mortgage Notes and related
Principal Mortgage Documents, Other Mortgage Documents and other Collateral.
"Mortgage Note" means a promissory note, on a standard form approved by
Xxxxxx Mae, Xxxxxxx Mac or Xxxxxx Mae or such other form as the Sellers
determine is satisfactory for any Approved Take-Out Investor unless otherwise
directed by the Administrative Agent and communicated to the Collateral Agent.
"Mortgage Origination Date" means, with respect to each Mortgage Loan,
the date (transmitted to the Collateral Agent) that is the later of (1) the date
of the Mortgage Note or (2) the date such Mortgage Loan was funded and disbursed
to or at the direction of the Obligor.
"Multiemployer Plan" means a multiemployer plan defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which a Seller or
any ERISA Affiliate is required to make contributions.
"Non-Conforming FICO Score Trigger Event" means, with respect to
Non-Conforming Loans, that (A)(i) the Non-Conforming Pool Weighted Average FICO
Score has been reported, in a Collateral Agent Daily Report, as less than 675
but equal to or more than 650, (ii) a period of ten (10) days has elapsed from
the date of receipt of such report by the Administrative Agent and (iii) the
Servicer has not provided to the Administrative Agent a revised Non-Conforming
Pool Weighted Average FICO Score that is at least 675 or (B)(i) the
Non-Conforming Pool Weighted Average FICO Score has been reported, in a
Collateral Agent Daily Report, as less than 650, (ii) a period of five (5) days
has elapsed from the date of receipt of such report by the Administrative Agent
and (iii) the Servicer has not provided to the Administrative Agent a revised
Non-Conforming Pool Weighted Average FICO Score that is at least 675.
"Non-Conforming Loan" means a Jumbo Loan or an Alt-A Loan.
16
"Non-Conforming Loan-to-Value Ratio Trigger Event" means, with respect
to Non-Conforming Loans, that (A)(i) the weighted average Loan-to-Value Ratio
has been reported, in a Collateral Agent Daily Report, as greater than 83% but
equal to or less than 90%, (ii) a period of ten (10) days has elapsed from the
date of receipt of such report by the Administrative Agent and (iii) the
Servicer has not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83% or (B)(i) the weighted
average Loan-to-Value Ratio has been reported, in a Collateral Agent Daily
Report, as greater than 90%, (ii) a period of five (5) days has elapsed from the
date of receipt of such report by the Administrative Agent and (iii) the
Servicer has not provided to the Administrative Agent a revised weighted average
Loan-to-Value Ratio that is equal to or less than 83%.
"Non-Conforming Pool Weighted Average FICO Score" means the ratio of
(a) the sum, for all Non-Conforming Loans, of the product for each
Non-Conforming Loan of (i) its FICO Score and (ii) its original principal
balance to (b) the sum of the original principal balances of all Non-Conforming
Loans.
"Note" means each or any of the promissory notes executed by the Buyer,
substantially in the form of Exhibit E of the Loan Agreement, together with all
renewals, extensions, and replacements for any such note.
"Obligations" means any and all present and future indebtedness,
obligations, and liabilities of the Buyer, as the borrower, to any of the
Lenders, the Collateral Agent, each Managing Agent, each Affected Party (as
defined in the Loan Agreement), each Indemnified Party and the Administrative
Agent, and all renewals, rearrangements and extensions thereof, or any part
thereof, arising pursuant to the Loan Agreement or any other Transaction
Document, and all interest and fees accrued thereon, and attorneys' fees and
other costs incurred in the drafting, negotiation, enforcement or collection
thereof, regardless of whether such indebtedness, obligations, and liabilities
are direct, indirect, fixed, contingent, joint, several or joint and several.
"Obligor" means (i) with respect to each Mortgage Note included in the
Collateral, the obligor on such Mortgage Note and (ii) with respect to any other
agreement included in the Mortgage Assets, any person from whom any of the
Sellers is entitled to performance.
"Originator Performance Guaranty" means the Amended and Restated
Originator Performance Guaranty, in the form attached the Loan Agreement as
Exhibit G-2, as confirmed by the Confirmation of Performance Guarantees, dated
as of even date herewith, made by the Performance Guarantors in favor of the
Buyer, as borrower, and assigned to the Administrative Agent for the benefit of
the Lenders.
"Other Mortgage Documents" is defined in Section 3.2(c) to the Loan
Agreement.
"Outstanding Balance" means as of any date of determination (A) with
respect to each Mortgage Loan, an amount equal to the lesser of: (i) the lesser
of the original principal amount or the acquisition price of such Mortgage Loan
paid by any of the Sellers on the closing and funding of such Mortgage Loan; and
(ii) for each Mortgage Loan that is a Conforming Loan, the amount determined by
multiplying (a) the weighted average purchase price (expressed as a
17
percentage) that Approved Take-Out Investors are committed to pay, pursuant to
Take-Out Commitments, for all Eligible Mortgage Loans, as shown on the most
recent Collateral Agent Daily Report, multiplied by the outstanding principal
balance of such Eligible Mortgage Loan.
"Park Avenue" has the meaning ascribed to it in the Loan Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Performance Guaranties" means, collectively, the Servicer Performance
Guaranty and the Originator Performance Guaranty.
"Performance Guarantors" means, together, American Home Mortgage
Holdings, Inc., a Delaware corporation, and AHMIC, and their respective
successors and assigns.
"Person" means any individual, corporation (including a business
trust), limited liability company, partnership, joint venture, association,
joint stock company, trust, unincorporated organization, Governmental Authority,
or any other form of entity.
"Pricing Rate" has the meaning specified in Section 2.02.
"Principal Mortgage Documents" is defined in Section 3.2(b) to the Loan
Agreement.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Purchase" means a purchase by the Buyer of Mortgage Assets from any of
the Sellers pursuant to Article II.
"Purchase Date" has the meaning specified in Section 2.02(a).
"Purchase Price" for any Purchase means an amount equal to the
Outstanding Balance of the Mortgage Assets that are the subject of such
Purchase.
"Purchase Request" has the meaning specified in Section 2.02(a).
"Purchased Mortgage Asset" means any Mortgage Asset which has been
purchased by the Buyer pursuant to Section 2.02.
"Repurchase Date" is defined in Section 2.02(a) hereto.
"Repurchase Price" the price at which the Purchased Mortgage Assets are
to be transferred from Buyer to any of the Sellers upon termination of a
transaction, which will be determined in each case as the sum of the Purchase
Price and the Price Differential as of the end of the related Interest Period.
"Requirement of Law" as to any Person means the articles of
incorporation, by-laws, certificate of formation and limited liability company
agreement or other organizational or governing documents of such Person, and any
law, statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or
18
other determination, direction or requirement (including, without limitation,
any of the foregoing that relate to energy regulations and occupational, safety
and health standards or controls and any hazardous materials laws) of any
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.
"S&P" means Standard & Poor's Rating Services, a Division of The
XxXxxx-Xxxx Companies, Inc., and any successor thereto.
"Servicer" means at any time the Person then authorized pursuant to
Section 11.1 of the Loan Agreement to administer and collect Mortgage Loans on
behalf of the Lenders. The initial Servicer shall be American Home Mortgage
Servicing, Inc., a Maryland corporation.
"Servicer Performance Guaranty" means the Amended and Restated Servicer
Performance Guaranty, in the form attached to the Loan Agreement as Exhibit G-1,
as confirmed by the Confirmation of Performance Guarantees, as of even date
herewith, made by the Performance Guarantors in favor of the Administrative
Agent for the benefit of the Lenders.
"Settlement Date" means the 15th day of each calendar month, or, if
such day is not a Business Day, the next succeeding Business Day, provided,
however, that on and after the Termination Date, the Administrative Agent may,
with the consent of the Managing Agents, by notice to the Buyer and the
Servicer, select other days to be Settlement Dates (including days occurring
more frequently than once per month).
"Subordination Agreement" means the Amended and Restated Subordination
Agreement, substantially in the form attached as Exhibit B to the Loan
Agreement, executed by the Performance Guarantors and certain of their
respective Affiliates in favor of the Buyer and the Administrative Agent for the
benefit of the holders of the obligations.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person, or one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries.
"Super Jumbo Loan" means a Jumbo Loan having an original principal
balance in excess of $999,999 but not more than $2,500,000.
"Take-Out Commitment" means a current, valid, binding, enforceable,
written commitment, issued by an Approved Take-Out Investor, to purchase
Mortgage Loans from one of the Sellers from time to time at a specified price
(or a specified spread to an agreed-upon index) which commitment is not subject
to any term or condition (i) that is not customary in commitments of like nature
or (ii) that, in the reasonably anticipated course of events, cannot be fully
complied with prior to the expiration thereof in which a perfected and
first-priority security interest has been granted by the Buyer to the
Administrative Agent.
"Tangible Net Worth" means, with respect to any Person, the excess of
total assets of such Person over the total liabilities of such Person determined
in accordance with GAAP, but excluding from the determination of total assets:
(a) all assets which would be classified as intangible assets under GAAP,
including, without limitation, goodwill (whether representing the
19
excess cost over book value of assets acquired or otherwise), patents,
trademarks, trade names, copyrights, franchises and deferred charges (including,
without limitation, unamortized debt discount and expense, organization costs
and research and product development costs), (b) loans or other extensions of
credit to officers, employees, shareholders or Affiliates of such Person (other
than the Servicer, the Sellers, the Performance Guarantors and American Home
Mortgage Acceptance, Inc.) and (c) investments in Subsidiaries of such Person
(other than the Servicer, the Sellers, the Performance Guarantors and American
Home Mortgage Acceptance, Inc.).
"Term" means three hundred sixty-four (364) days from the date of this
Agreement.
"Termination Date" means the earliest to occur of:
(a) November 21, 2006, or such earlier date determined in
accordance with Section 2.1(b) of the Loan Agreement, or
(b) the date on which the Maximum Facility Amount is terminated by
the Borrower pursuant to Section 2.1(d) of the Loan Agreement, and
(c) the date, on or after the occurrence of an Event of Default,
determined pursuant to Section 8.2 of the Loan Agreement.
"Transaction Document" has the meaning ascribed to such term in the
Loan Agreement.
"Transferred Mortgage Asset" means a Purchased Mortgage Asset.
"Transferred Mortgage Loan" means a Mortgage Loan included in the
Transferred Mortgage Assets.
"UCC" means the Uniform Commercial Code as adopted in the applicable
state, as the same may hereafter be amended.
"Underwriting Guidelines" means, with respect to each Originator, the
Originator's Underwriting Guidelines, a copy of which has been provided to the
Administrative Agent.
"VA" means the Department of Veterans Affairs, or any successor
thereto.
"VA Loan" means a Mortgage Loan, the payment of which is partially or
completely guaranteed by the VA under the Servicemen's Readjustment Act of 1944,
as amended, or Chapter 37 of Title 38 of the United States Code or with respect
to which there is a current binding and enforceable commitment for such a
guaranty issued by the VA.
"Wet Loans" is defined in Section 2.3(c) of the Loan Agreement.
Section 1.02. Other Terms.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC, and not
specifically defined herein, are used herein as defined in such Article 9. Any
inconsistency in the definitions between this
20
Agreement and the Master Repurchase Agreement shall be resolved in favor of the
definitions in this Agreement.
ARTICLE II
AMOUNTS AND TERMS OF PURCHASES
Section 2.01. Facility.
(a) The first sentence of Section 1 of the Master Repurchase
Agreement is amended in its entirety by replacing it with the following:
"From time to time prior to the occurrence and
continuance of an Event of Default and prior to the
Termination Date, any of the Sellers may present for transfer
to Buyer Mortgage Assets that are Eligible Mortgage Assets
against the transfer of funds by Buyer with a simultaneous
agreement by Buyer to transfer to such Seller such Assets at a
date certain or on demand, against the transfer of funds by
such Seller, and at each such time of presentation Buyer will
enter into such Transaction."
(b) Section 1 is hereby further amended by adding the following at
the end thereof:
"Without limiting any rights of Buyer under this
Master Repurchase Agreement, no Transaction shall be for a
Purchase Price such that the cash portion thereof will be less
than $25,000,000 and in integral multiple of $50,000 in excess
thereof."
(c) Every reference in the Master Repurchase Agreement to
"Securities" shall be replaced by "Mortgage Assets." Every reference in the
Master Repurchase Agreement to "Purchased Securities" shall be replaced by
"Purchased Mortgage Assets." Every reference in the Master Repurchase Agreement
to "Additional Purchased Securities" shall be replaced by "Additional Purchased
Mortgage Assets."
Section 2.02. Making Purchases.
(a) Subparagraph 3(b) of the Master Repurchase Agreement is
amended by deleting the subparagraph in its entirety and replacing it with the
following:
Purchases. Each Transaction shall be initiated by
request from any of the Sellers to the Buyer given no later
than 2:00 pm (eastern time) on the Business Day prior to the
date of Purchase. Each such request for a Purchase (each a
"Purchase Request") shall specify the date of such Purchase
(which shall be a Business Day), the Mortgage Assets included
in such Purchase and the Purchase Price for such Purchase. The
Buyer shall promptly notify such Seller whether it has
determined to make such Purchase and, if so, shall deliver a
written confirmation (each, a "Confirmation"). On the date of
each Purchase (each a "Purchase Date"), the Buyer shall, upon
satisfaction of the applicable conditions set forth in Article
III, pay the Purchase Price for such Purchase by means of any
21
one or a combination of the following: (i) a deposit in same
day funds to such Seller's account designated by such Seller
or (ii) an increase in the Deferred Purchase Price. The
allocation of the Purchase Price as among such methods of
payment shall be subject in each instance to the approval of
the Buyer and such Seller. If the Buyer and the Sellers do not
agree otherwise, the Purchaser Price shall be paid in cash.
The "Repurchase Date" for each Transaction shall be
the earliest of (i) the date set forth in the applicable
Confirmation, (ii) the date determined by application of
Paragraph 11 of the Master Repurchase Agreement and (iii) the
date that is 364 days after the related Purchase Date. The
"Pricing Rate" for each Transaction shall be set forth on the
Confirmation; provided that, upon the occurrence of and during
the continuance of an Event of Default, the Pricing Rate shall
equal the Default Rate. The Confirmation, together with this
Master Repurchase Agreement, shall constitute conclusive
evidence of the terms agreed between the Buyer and the Sellers
with respect to the Transaction to which the Confirmation
relates, unless with respect to the Confirmation specific
objection is made promptly after receipt thereof. In the event
of any conflict between the terms of such Confirmation and
this Master Repurchase Agreement, this Master Repurchase
Agreement shall prevail.
(b) Subparagraph 3(c) of the Master Repurchase Agreement is
amended by replacing the first sentence of Paragraph 3(c) with the following:
In the case of Transactions terminable upon demand, such
demand by any of the Sellers shall be for a repurchase of all Purchased
Mortgage Assets subject to the related Transaction and shall be made no
later than 11:00 a.m. New York City time on the Business Day
immediately preceding the day on which such termination will be
effective, which termination shall also be on a Business Day.
(c) Paragraph 3 of the Master Repurchase Agreement is amended by
adding the following language as a new Subparagraph 3(d):
This Master Repurchase Agreement shall continue in effect
until the expiration of the Termination Date.
Section 2.03. Margin Maintenance.
Paragraph 4 of the Master Repurchase Agreement is amended in its
entirety to read as follows:
(a) Daily until the expiration of the Termination Date (or less
frequently if the Buyer, in its sole and absolute discretion, so elects), each
of the Sellers, as applicable (or Servicer on Buyer's behalf) will determine (i)
the aggregate Collateral Value of all Purchased Mortgage Assets held by Buyer,
(ii) the Repurchase Price as of such date, and the Maximum Facility Amount as of
such date. Without limiting the foregoing, each of the Sellers shall deliver to
Buyer, at any time and from time to time, information in its possession in the
ordinary course of
22
its business with respect to the Purchased Mortgage Assets sold by it to assist
Buyer in ascertaining the Collateral Value of such Purchased Mortgage Assets.
(b) If, on any date, the aggregate Repurchase Price exceeds the
total Collateral Value of all Eligible Mortgage Assets (a "Margin Deficit"),
Buyer may, in its sole and absolute discretion, by notice to such Seller (a
"Margin Call"), require such Seller to transfer to Buyer cash or additional
Purchased Mortgage Assets that are reasonably acceptable to Buyer ("Additional
Purchased Mortgage Assets") to eliminate such deficiency.
(c) Upon receipt of notice from Buyer at or prior to 11:00 a.m.
New York City time (which may be transmitted by facsimile), each of the Sellers,
as applicable, in its sole discretion, shall transfer either cash or the
Additional Purchased Mortgage Assets no later than the close of business on the
Business Day immediately following the date on which a Margin Call is given. Any
cash transferred to Buyer pursuant hereto shall be held by Buyer until the
Repurchase Date and shall be applied against the Repurchase Price on the
Repurchase Date.
(d) Buyer's election, in its sole and absolute discretion, not to
make a Margin Call at any time there is a Margin Deficit shall not in any way
limit or impair its right to make a Margin Call at any time a Margin Deficit
exists.
Section 2.04. Collections.
Paragraph 5 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence thereof:
Notwithstanding the foregoing and except as provided in
Paragraph 11 of this Master Repurchase Agreement, each of the Sellers
shall hold for the benefit of, and in trust for, Buyer all income,
including without limitation all scheduled and unscheduled principal
and interest payments or any other income (including, without
limitation, tax escrow payments), received by or on behalf of any of
the Sellers with respect to such Purchased Mortgage Assets sold by it
(collectively, "Purchased Asset Income"). To the extent required under
the Loan Agreement, each of the Sellers shall deposit the Purchased
Asset Income (other than any Obligor's escrow payments) in the
Collection Account.
On each Settlement Date, the Buyer shall pay to each of the
Sellers accrued interest on the Deferred Purchase Price of the related
Purchased Mortgage Assets sold by it and the Buyer may, at its option,
prepay in whole or in part the principal amount of any such Deferred
Purchase Price; provided that each such payment shall be made solely
from (i) Collections of the related Transferred Mortgage Assets after
all other amounts then due from the Buyer under the Loan Agreement have
been paid in full and all amounts then required to be set aside by the
Buyer or the Servicer under the Loan Agreement have been so set aside
or (ii) excess cash flow from operations of the Buyer which is not
required to be applied to the payment of other obligations of the
Buyer; and provided further, that no such payment shall be made at any
time when an Event of Default shall have occurred and be continuing. At
such time following the Termination Date
23
when all principal, interest and other amounts owed by the Buyer under
the Loan Agreement shall have been paid in full, the Buyer shall apply,
on each Settlement Date, all Collections of Transferred Mortgage Assets
deposited to the Collection Account pursuant to this Paragraph 5 (and
not previously distributed) ratably as between each of the Sellers
first to the payment of accrued interest on each related Deferred
Purchase Price, and then to the reduction of the principal amount of
each related Deferred Purchase Price.
Notwithstanding any provision to the contrary in this
Paragraph 5, the Buyer and the Sellers may agree that any of the
Sellers may transfer to the Buyer all or a portion of the Income with
respect to Transferred Mortgage Assets under the agreed terms of any
Sale and for payments by such Seller to the Buyer based upon accruals
of that Income while the Buyer owns the Transferred Mortgage Assets.
Section 2.05. Repurchase or Substitution Procedures.
(a) Upon discovery by any of the Sellers or the Buyer of a breach
of any of the representations and warranties made by any of the Sellers in
Section 4.01(t) of this Agreement with respect to any Transferred Mortgage
Asset, such party shall give prompt written notice thereof to the other party,
as soon as practicable and in any event within three Business Days following
such discovery. Such Seller shall, upon not less than two Business Days' notice
from the Buyer or its assignee or designee, repurchase such Transferred Mortgage
Asset on the next succeeding Settlement Date for a repurchase price equal to the
Repurchase Price of such Transferred Mortgage Asset. Each repurchase of a
Transferred Mortgage Asset shall include the Mortgage Loan Collateral with
respect to such Transferred Mortgage Asset. The proceeds of any such repurchase
shall be deemed to be a Collection in respect of such Transferred Mortgage
Asset. If such Seller is not the Servicer, such Seller shall pay to the Servicer
for deposit to the Collection Account on or prior to the next Settlement Date
the Repurchase Price required to be paid pursuant to this subsection. If such
Seller is the Servicer, such Seller shall deposit such Repurchase Price to the
Collection Account on or prior to the next Settlement Date.
(b) Upon discovery by any of the Sellers or the Buyer of a breach
by any of the Sellers of its covenant in Section 5.23 of this Agreement with
respect to any Wet Loan, such party shall give prompt written notice thereof to
the other parties, as soon as practicable and in any event within three Business
Days following such discovery. Such Seller shall, upon not less than two
Business Days' notice from the Buyer or its assignee or designee or from the
Collateral Agent on its behalf, repurchase such Wet Loan for a repurchase price
equal to the Repurchase Price of such Wet Loan. Each repurchase of a Wet Loan
shall include the Mortgage Loan Collateral with respect to such Wet Loan. The
proceeds of any such repurchase shall be deemed to be a Collection in respect of
such Wet Loan. If such Seller is not the Servicer, such Seller shall pay to the
Servicer for deposit to the Collection Account on or prior to the repurchase
date the Repurchase Price required to be paid pursuant to this subsection. If
such Seller is the Servicer, such Seller shall deposit such Repurchase Price to
the Collection Account on or prior to the next Settlement Date.
24
(c) If a Mortgage Note has been withdrawn for correction pursuant
to Section 6.02 of this Agreement and the applicable Seller has not delivered
the corrected Mortgage Note to the Collateral Agent within twenty calendar days
after such withdrawal, such Seller shall, upon not less than two Business Days'
notice from the Buyer or its assignee or designee or from the Collateral Agent
on its behalf, repurchase the related Mortgage Loan for a repurchase price equal
to the Repurchase Price of such Mortgage Loan. Each repurchase of a Mortgage
Loan shall include the Mortgage Loan Collateral with respect to such Mortgage
Loan. The proceeds of any such repurchase shall be deemed to be a Collection in
respect of such Mortgage Loan. If such Seller is not the Servicer, such Seller
shall pay to the Servicer for deposit to the Collection Account on or prior to
the repurchase date the Repurchase Price required to be paid pursuant to this
subsection. If such Seller is the Servicer, such Seller shall deposit such
Repurchase Price to the Collection Account on or prior to the next Settlement
Date.
(d) To the extent that any of the events occur that require any of
the Sellers to repurchase pursuant to subsections 2.05(a), 2.05(b) and 2.05(c),
but only so long as a Margin Deficit does not exist, such Seller may elect not
to repurchase the effected purchased loans by delivering written notice to the
Buyer, its successors and assigns.
Section 2.06. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by any of the Sellers
hereunder shall be paid or deposited no later than 11:00 a.m. (eastern time) on
the day when due in same day funds to an account designated by the Buyer from
time to time, which account shall initially be the Collection Account.
(b) Any of the Sellers shall, to the extent permitted by law, pay
to the Buyer interest on any amount not paid or deposited by such Seller
(whether as Servicer or otherwise) when due hereunder at an interest rate per
annum equal to 2% per annum above the Alternate Base Rate, payable on demand.
(c) All computations of interest and all computations of fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
Section 2.07. Intent of the Sellers and the Buyer.
Paragraph 6 of the Master Repurchase Agreement is hereby deleted and
replaced with the following:
The Seller and the Purchaser intend that this Agreement and
all Transactions hereunder constitute "repurchase agreements" within
the meaning of Sections 559 and 362(b)(7) of the Bankruptcy Code. The
Sellers and the Buyer have structured this Agreement with the intention
that each Purchase of Mortgage Assets hereunder be treated as a sale of
such Mortgage Assets by the Sellers to the Buyer for all purposes. Each
of the Sellers and the Buyer shall record each
25
related Purchase on its books and records, and reflect each related
Purchase in its financial statements, in accordance with GAAP, and each
of the Sellers and the Buyer shall report each related Purchase on its
tax returns as required by applicable tax law. In the event that,
contrary to the mutual intent of the Sellers and the Buyer, any
Purchase of Mortgage Assets hereunder is not characterized as a sale or
absolute transfer, the Sellers shall, effective as of the date hereof,
be deemed to have granted (and the Sellers hereby grant) to the Buyer a
first priority security interest in and to any and all Mortgage Assets,
the related Mortgage Loan Collateral and the proceeds thereof to secure
the repayment of all amounts advanced to the Sellers hereunder with
accrued interest thereon, and this Agreement shall be deemed to be a
security agreement.
Section 2.08. No Segregation of Assets.
Paragraph 8 of the Master Repurchase Agreement is amended by deleting
Paragraph 8 in its entirety and replacing it with the following:
Upon transfer of the Mortgage Loans to Buyer as set forth in
Paragraph 3(a) of this Master Repurchase Agreement and until
termination of any related Transactions as set forth in Paragraphs 3(c)
or 11 of this Master Repurchase Agreement, ownership of each Mortgage
Loan, including each document in the related Mortgage File, is vested
in Buyer. Upon transfer of the Mortgage Loans to Buyer as set forth in
Paragraph 3(a) of this Master Repurchase Agreement and until
termination of any Transactions as set forth in paragraphs 3(c) or 11
of this Master Repurchase Agreement and prior to the recordation of the
assignments of mortgage by the Collateral Agent as provided for in the
Collateral Agency Agreement, record title in the name of the applicable
Seller or in the case of a MERS Designated Mortgage Loan MERS as
nominee for the beneficial owner to each Mortgage shall be retained
thereby in trust, for the benefit of Buyer, for the sole purpose of
facilitating the servicing and the supervision of the servicing of the
Mortgage Loans. Nothing in this Master Repurchase Agreement shall
preclude Buyer from engaging in repurchase transactions with the
Purchased Mortgage Assets or otherwise pledging, selling, assigning or
hypothecating the Purchased Mortgage Assets without the prior consent
of the applicable Seller, but no such transaction or provision hereof
or provision of the Collateral Agency Agreement shall relieve Buyer of
its obligations to transfer Purchased Mortgage Assets (and with respect
to the Mortgage Loans, the same Mortgage Loans and not substitutes
therefor) to such Seller pursuant and subject to Paragraphs 3, 4 or 11
hereof. Upon termination of any Transactions as set forth in Paragraph
3(c) of this Master Repurchase Agreement, Buyer agrees to execute
promptly endorsements of the mortgage notes, assignments of the
mortgages and UCC-3 assignments, releases or terminations related to
such Transactions, to the extent that such documents are prepared by
the applicable Seller for Buyer's execution, are delivered to Buyer by
such Seller and are necessary and appropriate, as reasonably determined
by such Seller, to reconvey, without recourse, to such Seller and
perfect title of like tenor to that conveyed to Buyer to the related
26
Mortgage Loans. Buyer shall provide cooperation in assisting and
directing the Collateral Agent to facilitate such preparation (without
expense to Buyer).
Notwithstanding anything to the contrary set forth in this
Master Repurchase Agreement, in no event shall Purchased Mortgage
Assets remain in the custody of any of the Sellers or any affiliate of
any of the Sellers, except as permitted under the Collateral Agency
Agreement.
Section 2.09. Substitution.
Paragraph 9 of the Master Repurchase Agreement is amended by deleting
the existing Paragraph 9 in its entirety and replacing it with the following
language:
(a) In the case of any Transaction for which the Repurchase Date
is other than the Business Day immediately following the Purchase Date, such
Seller shall have the right, subject to the proviso to this sentence, upon
notice to Buyer, which notice shall be given at or prior to noon (12:00 p.m.)
(New York time) on the preceding Business Day, to substitute substantially the
same Mortgage Assets for any Purchased Mortgage Assets; provided, however, that
Buyer, in its sole and absolute discretion, may elect, by the close of business
on the Business Day next following the Business Day on which notice is received
not to accept such substitution. In the event such substitution is accepted by
Buyer, such substitution shall be made by such Seller's transfer to Buyer of
additional Mortgage Assets, and after substitution, the substituted additional
Mortgage Loans shall be deemed to be Purchased Mortgage Assets. In the event
Buyer elects not to accept such substitution, Buyer shall offer such Seller the
right to terminate the Transaction. If such Seller elects to terminate such
Transaction (which election shall be made in writing within five (5) Business
Days of Buyer's offer to such Seller of the right to terminate the transaction),
the date of termination will be determined in accordance with Paragraph 3(c) of
the Master Repurchase Agreement.
(b) In the event any of the Sellers exercises its right to
substitute or terminate pursuant to subparagraph (a), the Seller shall be
obligated to pay to Buyer, by the close of the Business Day of such substitution
or termination, as the case may be, an amount equal to (A) Buyer's actual cost
(including all fees, expenses and commissions) of (i) entering into replacement
Transactions; and (ii) entering into or terminating hedge transactions, (B) to
the extent Buyer determines not to enter into replacement Transactions, the loss
incurred by Buyer directly arising or resulting from such substitution or
termination and (C) in the case of the termination of any Transaction, the
related Repurchase Price for such Purchased Mortgage Assets. The foregoing
amounts shall be determined and calculated solely by Buyer on a commercially
reasonable basis.
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.01. Conditions Precedent to Initial Purchase from the
Sellers.
The initial Purchase of Mortgage Assets from any of the Sellers
hereunder is subject to the conditions precedent that the Buyer shall have
received on or before the date of such
27
Purchase the following, each (unless otherwise indicated) dated such date, in
form and substance reasonably satisfactory to the Buyer:
(a) Certified copies of the resolutions of the Board of Directors
or the Managers of the applicable Seller approving this Agreement and certified
copies of all documents evidencing other necessary corporate or entity action
and governmental approvals, if any, with respect to this Agreement and the
Master Repurchase Agreement.
(b) A certificate of the Secretary or Assistant Secretary of the
applicable Seller certifying the names and true signatures of the officers of
such Seller authorized to sign this Agreement and the other documents to be
delivered by it hereunder.
(c) Opinions of counsel for the Sellers, as to such matters as the
Buyer may request.
(d) Fully executed originals of the Loan Agreement, and the
Collateral Agency Agreement.
Section 3.02. Conditions Precedent to All Purchases.
Each Purchase hereunder shall be subject to the further conditions
precedent that:
(a) prior to 12:00 noon (eastern time) on the Business Day prior
to the date of such Purchase, the Buyer and the Collateral Agent shall have
received a xxxx of sale and blanket assignment, in the form set forth in Exhibit
B-I or Exhibit B-II hereto, and duly executed and delivered by the applicable
Seller, with respect to the Mortgage Assets included in such Purchase;
(b) the Principal Mortgage Documents with respect to each Mortgage
Loan included in such Purchase, other than Wet Loans, shall have been physically
delivered to the possession of the Collateral Agent;
(c) on the date of such Purchase the following statements shall be
true (and any of the Sellers, by accepting the amount of such Purchase, shall be
deemed to have certified that):
(1) The representations and warranties contained in Section
4.01 are correct on and as of the date of such Purchase as
though made on and as of such date,
(2) No event has occurred and is continuing, or would result
from such Purchase, that constitutes an Event of Default or
would constitute a Default, and
(3) The Buyer shall not have delivered to the applicable
Seller a notice that the Buyer shall not make any further
Purchases hereunder.
28
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations of the Sellers.
Paragraph 10 of the Master Repurchase Agreement is amended by deleting
the existing language in its entirety and replacing it with the following: Each
of the Sellers represents and warrants as follows:
(a) Organization and Good Standing. It (i) is a corporation duly
incorporated and existing in good standing under the laws of the jurisdiction of
its incorporation, (ii) is duly qualified as a foreign entity and in good
standing in all jurisdictions in which its failure to be so qualified could have
a Material Adverse Effect, (iii) has the corporate or entity power and authority
to own its properties and assets and to transact the business in which it is
engaged and is or will be qualified in those states wherein it proposes to
transact business in the future and (iv) is in compliance with all Requirements
of Law.
(b) Authorization and Power. It has the corporate or entity power
and requisite corporate or entity authority to execute, deliver and perform this
Agreement and the other Transaction Documents to which it is a party; it is duly
authorized to and has taken all corporate or entity action necessary to
authorize it to, execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party and is and will continue to be duly
authorized to perform this Agreement and such other Transaction Documents.
(c) No Conflicts or Consents. Neither the execution and delivery
by it of this Agreement or the other Transaction Documents to which it is a
party, nor the consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or with the
terms and provisions thereof, will (i) contravene or conflict with any
Requirement of Law to which it is subject, or any indenture, mortgage, deed of
trust, or other agreement or instrument to which it is a party or by which it
may be bound, or to which its Property may be subject, or (ii) result in the
creation or imposition of any Lien on the Property of such Seller (other than
the sale of the Transferred Mortgage Assets as contemplated by this Agreement).
(d) Enforceable Obligations. This Agreement and the other
Transaction Documents to which it is a party have been duly and validly executed
by it and are its legal, valid and binding obligations, enforceable in
accordance with their respective terms, except as limited by Debtor Laws.
(e) Full Disclosure. Neither its financial statements nor any
Purchase Request, officer's certificate or statement delivered by it to the
Buyer in connection with this Agreement, contains or will contain any untrue
statement of material fact or omits or will omit to state a material fact
necessary to make such information not misleading.
(f) No Default. It is not in default under any loan agreement,
mortgage, security agreement or other material agreement or obligation to which
it is a party or by which any of its Property is bound, if such default would
also be a Default or an Event of Default (or, with notice
29
or the passage of time would become a Default or an Event of Default) under
Section 7.01(a) of this Agreement.
(g) Litigation.
(i) Except as set forth on Schedule III to this
Agreement, there are no actions, suits or proceedings,
including arbitrations and administrative actions, at law or
in equity, either by or before any Governmental Authority, now
pending or, to its knowledge, threatened by or against it or
any of its Subsidiaries, and pertaining to any Governmental
Requirement affecting its Property or rights or any of its
Subsidiaries.
(ii) Neither it nor any of its Subsidiaries is in
default with respect to any Governmental Requirements.
(iii) Such Seller is not liable on any judgment,
order or decree (or any series of judgments, orders, or
decrees) that could reasonably be expected to have a Material
Adverse Effect and that has not been paid, stayed or dismissed
within 60 days.
(h) Taxes. All tax returns required to be filed by it in any
jurisdiction have been filed, except where extensions of time to make those
filings have been granted by the appropriate taking authorities and the
extensions have not expired, and all taxes, assessments, fees and other
governmental charges upon it or upon any of its properties, income or franchises
have been paid prior to the time that such taxes could give rise to a Lien
thereon, unless protested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been established on its
books. There is no tax assessment or, to its best knowledge, proposed tax
assessment against it that would have a Material Adverse Effect.
(i) [Reserved]
(j) Permits, Patents, Trademarks, Etc.
(i) It has all permits and licenses necessary for the
operation of its business.
(ii) It owns or possesses (or is licensed or
otherwise has the necessary right to use) all patents,
trademarks, service marks, trade names and copyrights,
technology, know-how and processes, and all rights with
respect to the foregoing, that are necessary for the operation
of its business without any known conflict with the rights of
others. The consummation of the transactions contemplated
hereby will not alter or impair any of such rights.
(k) Status Under Certain Federal Statutes. It is not (i) a
"holding company," or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company," or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, (ii) a "public utility," as such term is defined in the
Federal Power Act, as amended, (iii) an "investment company," or a company
"controlled" by an
30
"investment company," within the meaning of the Investment Company Act of 1940,
as amended, or (iv) a "rail carrier," or a "person controlled by or affiliated
with a rail carrier," within the meaning of Title 49, U.S.C., and it is not a
"carrier" to which 49 U.S.C. ss. 11301(b)(1) is applicable.
(l) Securities Acts. It has not issued any unregistered securities
in violation of the registration requirements of the Securities Act of 1933, as
amended, or of any other Requirement of Law, and is not violating any rule,
regulation, or requirement under the Securities Act of 1933, as amended, or the
Securities and Exchange Act of 1934, as amended.
(m) No Approvals Required. Other than consents and approvals
previously obtained and actions previously taken, neither the execution and
delivery of this Agreement and the other Transaction Documents to which it is a
party, nor the consummation of any of the transactions contemplated hereby or
thereby requires the consent or approval of, the giving of notice to, or the
registration, recording or filing by it of any document with, or the taking of
any other action in respect of, any Governmental Authority that has jurisdiction
over it or any of its Property.
(n) Environmental Matters. There have been no past, and there are
no pending or, its knowledge, threatened, claims, complaints, notices, or
governmental inquiries against it regarding any alleged violation of, or
potential liability under, any environmental laws that could reasonably be
expected to have a Material Adverse Effect. It and its properties are in
compliance in all material respects with all environmental laws and related
licenses and permits, unless the failure to comply in all respects therewith
could reasonably be expected to have a Material Adverse Effect. No conditions
exist at, on or under any Property now or previously owned or leased by it that
could give rise to liability under any environmental law that could reasonably
be expected to have a Material Adverse Effect.
(o) Eligibility. Such Seller is approved and qualified and in good
standing as a lender or seller/servicer, as follows:
(i) Such Seller is a Xxxxxx Xxx approved
seller/servicer (in good standing) of mortgage loans, eligible
to originate, purchase, hold, sell and service mortgage loans
to be sold to Xxxxxx Mae.
(ii) Such Seller is a Xxxxxxx Mac approved
seller/servicer (in good standing) of mortgage loans, eligible
to originate, purchase, hold, sell and service mortgage loans
to be sold to Xxxxxxx Mac.
(iii) Such Seller is each an approved FHA servicer,
VA servicer and Xxxxxx Xxx issuer (in good standing) of
mortgage loans, eligible to originate, purchase, hold, sell
and service mortgage loans to be pooled into Xxxxxx Mae
mortgage-backed securities Pools and to issue Xxxxxx Xxx
mortgage-backed securities.
(p) Principal Office, Etc. The principal office, chief executive
office and principal place of business of (i) American Home Mortgage Corp. is at
000 Xxxxxxxxxxx
00
Xxxx, Xxxxxxxx, Xxx Xxxx 00000 and (ii) American Home Mortgage Servicing, Inc.
is at 000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (executive offices), and
its principal office is at 0000 Xxxxxx Xxxx., Xxxxx 000, Xxxxxx, Xxxxx 00000.
(q) Financial Condition.
(i) Each of the Sellers has delivered to the Buyer
(x) copies of the consolidated balance sheets of AHMIC, as of
June 30, 2005, and the related statements of income,
stockholder's equity and cash flows for the year ended on such
date, audited by independent certified accountants of
recognized national standing; and (y) copies of the balance
sheets of the American Home Mortgage Holdings, Inc., as of
June 30, 2005, and the related statements of income for the
six (6) months ended on such date (the "Interim Statements")
and all such financial statements fairly present the financial
condition of each of the Sellers as of their respective dates,
subject, in the case of the Interim Statements, to normal year
end adjustments and the results of operations of each of the
Sellers for the periods ended on such dates and have been
prepared in accordance with GAAP.
(ii) As of the date thereof, there are no
obligations, liabilities or Indebtedness (including contingent
and indirect liabilities and obligations or unusual forward or
long-term commitments) of any of the Sellers required to be
recorded under GAAP that are not reflected therein.
(iii) No change that constitutes a Material Adverse
Effect has occurred in the financial condition or business of
any of the Sellers since March 31, 2003.
(r) Employee Benefit Plans. (i) No Employee Plan of any of the
Sellers or any ERISA Affiliate has incurred an "accumulated funding deficiency"
(as defined in Section 302 of ERISA or Section 412 of the Code), (ii) neither
any of the Sellers nor any ERISA Affiliate has incurred liability under ERISA to
the PBGC, (iii) neither any of the Sellers nor any ERISA Affiliate has partially
or fully withdrawn from participation in a Multiemployer Plan, (iv) no Employee
Plan of any of the Sellers or any ERISA Affiliate has been the subject of
involuntary termination proceedings, (v) neither any of the Sellers nor any
ERISA Affiliate has engaged in any "prohibited transaction" (as defined in
Section 406 of ERISA or Section 4975 of the Code), and (vi) no "reportable
event" (as defined in Section 4043 of ERISA) has occurred in connection with any
Employee Plan of any of the Sellers or any ERISA Affiliate other than events for
which the notice requirement is waived under applicable PBGC regulations.
(s) Ownership. On the date of this Agreement, AHMIC holds
beneficial ownership, directly or indirectly of 100% of the issued and
outstanding shares of each class of the stock of each of the Sellers. American
Home Mortgage Corp. is the owner of 100% of the membership interests in the
Buyer.
(t) Eligible Mortgage Assets. Each Mortgage Asset purported to be
sold by any of the Sellers hereunder is an Eligible Mortgage Asset as of the
date of such sale, and each such Mortgage Asset, together with the related
Mortgage Loan Collateral, is owned (immediately prior to its sale hereunder) by
the applicable Seller free and clear of any Adverse Claim (other than any
Adverse Claim arising solely as the result of any action taken by the Buyer).
When
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Buyer acquires a Transferred Mortgage Asset by Purchase hereunder, it shall
acquire good and marketable title to such Transferred Mortgage Asset and the
related Mortgage Loan Collateral and Collections with respect thereto free and
clear of any Adverse Claim (other than any Adverse Claim arising solely as the
result of any action taken by the Buyer), and no effective financing statement
or other instrument similar in effect covering any Transferred Mortgage Asset,
any interest therein, the related Mortgage Loan Collateral or Collections with
respect thereto is on file in any recording office except such as may be filed
in favor of Buyer in accordance with this Agreement or in connection with any
Adverse Claim arising solely as the result of any action taken by the Buyer. In
addition, with respect to each Mortgage Loan sold to the Buyer that is
subsequently sold to Xxxxxxx Mac, such Seller hereby makes the representations
and warranties set forth in the Xxxxxxx Mac Selling Guide and such Seller's
Master Agreement and Mortgage Loan Purchase Agreement with Xxxxxxx Mac. In
addition, with respect to each Mortgage Loan sold to Buyer that is subsequently
sold to Xxxxxx Mae, such Seller hereby makes the representations and warranties
(collectively, the "Xxxxxx Xxx Representations and Warranties") set forth in the
Xxxxxx Mae Selling and Servicing Guides, the Mortgage Selling and Servicing
Contract between such Seller and Xxxxxx Xxx, and Master Agreement No. MC03136.1
by and among Xxxxxx Mae and such Seller, as amended from time to time, and all
subsequent master agreements entered into by and among Xxxxxx Xxx and such
Seller (collectively, the "Xxxxxx Mae Incorporated Documents") as though the
Xxxxxx Xxx Representations and Warranties were fully set forth herein. The
Xxxxxx Mae Incorporated Documents are incorporated herein by reference as though
fully set forth herein, and the Xxxxxx Xxx Representations and Warranties shall
survive the delivery of any Mortgage Loan to Xxxxxx Mae. Further, with respect
to each Non-Conforming Loan, such Seller hereby makes the representations and
warranties set forth in the related mortgage loan purchase agreement,
seller/servicer guide or other similar agreement with the applicable Approved
Take-Out Investor.
(u) No Intent to Hinder Creditors. The transfers of Transferred
Mortgage Assets by any of the Sellers to the Buyer pursuant to this Agreement,
and all other transactions between any of the Sellers and the Buyer, have been
and will be made in good faith and without intent to hinder, delay or defraud
creditors of any of the Sellers.
(v) No Adverse Selection. No selection procedure was utilized by
any of the Sellers in selecting the Transferred Mortgage Assets to be
transferred to the Buyer hereunder which any of the Sellers reasonably believes
to be adverse to the interests of the Buyer.
(w) Trade Names. Except as set forth on Schedule I hereto, the
Sellers are neither known by nor use any trade name or doing-business-as name.
(x) Origination of Mortgage Loans.
(i) Each Eligible Mortgage Loan was originated in
compliance with local, state and federal law applicable
thereto at the time of origination, including, without
limitation, required disclosures of points, charges and fees.
(ii) Each Eligible Mortgage Loan was originated using
credit policies in effect at the time of such origination,
which were designated to provide guidelines in underwriting
the creditworthiness of the Obligors and to determine
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the Obligors' ability to repay the debt. In accordance with
such policies, each of the Sellers considered, among other
things, the credit history of the Obligor and other credit
indicators such as income verification and/or debt-to-income
ratios of the Obligor. No Mortgage Loan was originated based
solely on an estimation of the value of the mortgaged property
without any consideration of the potential ability of the
Obligor to repay the amount owed under the Mortgage Loan.
(iii) No Mortgage Loan violates any of the provisions
of the Home Ownership and Equity Protection Act of 1994 (15
U.S.C. ss. 1602(aa)) or Regulation Z (12 C.F.R. 226.32).
(iv) No Obligor was required to purchase any credit
life, disability, accident or health insurance product as a
condition of obtaining the Mortgage Loan. No Obligor obtained
a prepaid single-premium credit life, disability, accident or
health policy in connection with the origination of the
Mortgage Loan.
(v) Each Mortgage Loan reported as an Eligible
Mortgage Loan is an Eligible Mortgage Loan.
ARTICLE V
COVENANTS
Section 5.01. Each of the Sellers shall at all times comply with the
covenants contained in this Article V, from the date hereof until the later of
the Termination Date and the date all of the Obligations are paid in full.
Section 5.02. Financial Statements and Reports.
Each of the Sellers shall furnish to the Buyer the following, all in
form and detail satisfactory to the Buyer:
(a) promptly after becoming available, and in any event within 120
days after the close of each fiscal year of AHMIC, such Person's audited
consolidated and consolidating balance sheets, as of the end of such fiscal
year, and the related statements of income, stockholders' equity and cash flows
of such Person for such year showing within such consolidated and consolidating
balance sheets and statements of income the balance sheet and statements of
income for the Sellers accompanied by (i) the related report of independent
certified public accountants which report shall be to the effect that such
statements have been prepared in accordance with GAAP applied on a basis
consistent with prior periods except for such changes in such principles with
which the independent public accountants shall have concurred and (ii) if
issued, the auditor's letter or report to management customarily given in
connection with such audit;
(b) promptly after becoming available, and in any event within 60
days after the end of each fiscal quarter, excluding the fourth fiscal quarter
of each fiscal year of AHMIC, the unaudited consolidated and consolidating
balance sheet of AHMIC as of the end of such fiscal quarter and related
statements of income, stockholders' equity and cash flows of AHMIC for
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such fiscal quarter and the period from the first day of the then current fiscal
year of AHMIC through the end of such fiscal quarter, showing within such
consolidating and consolidated balance sheets and statements of income the
balance sheet and statements of income for the Sellers certified by a Financial
Officer of the Performance Guarantor, to have been prepared in accordance with
GAAP applied on a basis consistent with prior periods, subject to normal
year-end adjustments;
(c) promptly and in any event within twenty (20) days after the
request of the Buyer at any time and from time to time, a certificate, executed
by a responsible officer of such Seller, setting forth all of such Seller's
warehouse borrowings and a description of the collateral related thereto;
(d) promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any "reportable event" defined in Article IV
of ERISA that such Seller files or that the Borrower, Originators or Servicer is
required to file under ERISA with the Internal Revenue Service, the PBGC or the
U.S. Department of Labor, the Borrower, Originators or Servicer receives from
the PBGC;
(e) immediately after becoming aware of the expiration,
forfeiture, termination, or cancellation of, or default under, any Take-Out
Commitment or Hedge, telephone notice thereof confirmed in writing within one
Business Day, together with a statement as to what action the Buyer proposes to
take with respect thereto; provided that no such notice need be given if such
Take-Out Commitment or Hedge, is replaced by another Take-Out Commitment or
Hedge within one Business Day;
(f) promptly after obtaining knowledge thereof, notice of any
Event of Default or Termination Date hereunder;
(g) at least ten Business Days prior to any change in such
Seller's name, a notice setting forth the new name and the effective date
thereof; and
(h) such other information concerning the business, properties or
financial condition of such Seller as the Buyer may reasonably request.
Section 5.03. Taxes and Other Liens.
Each of the Sellers shall pay and discharge promptly all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or upon any of its Property as well as all claims of any kind (including
claims for labor, materials, supplies and rent) that, if unpaid, might become a
Lien upon any or all of its Property; provided, however, the Sellers shall not
be required to pay any such tax, assessment, charge, levy or claim if the
amount, applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings diligently conducted by the applicable Seller
or on its behalf and if it shall have set up reserves therefor adequate under
GAAP.
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Section 5.04. Maintenance.
Each of the Sellers shall (i) maintain its corporate or entity
existence, rights and franchises and (ii) observe and comply with all
Governmental Requirements.
Section 5.05. Further Assurances.
(a) Each of the Sellers agrees from time to time, at its expense,
promptly to execute and deliver all further instruments and documents, and to
take all further actions, that may be necessary or desirable, or that the Buyer
or its assignee may request, to perfect, protect or more fully evidence the sale
of Mortgage Assets under this Agreement, or to enable the Buyer or its assignee
to exercise and enforce its respective rights and remedies under this Agreement.
Without limiting the foregoing, each of the Sellers will, upon the request of
the Buyer or its assignee, (i) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments and documents,
that may be necessary or desirable to perfect, protect or evidence such
Transferred Mortgage Assets; and (ii) deliver to the Buyer and/or the Collateral
Agent copies of all Mortgage Loan Collateral relating to the Transferred
Mortgage Assets and all records relating thereto, whether in hard copy or in
magnetic tape or diskette format.
(b) Each of the Sellers authorizes the Buyer or its assignee to
file financing or continuation statements, and amendments thereto and
assignments thereof, relating to the Transferred Mortgage Assets, the related
Mortgage Loan Collateral and the Collections with respect thereto without the
signature of any of the Sellers where permitted by law. A photocopy or other
reproduction of this Agreement shall be sufficient as a financing statement
where permitted by law.
Section 5.06. Insurance.
(a) Each of the Sellers shall maintain with financially sound and
reputable insurers, insurance with respect to its Properties and business
against such liabilities, casualties, risks and contingencies and in such types
and amounts as is customary in the case of Persons engaged in the same or
similar businesses and similarly situated, including, without limitation, a
fidelity bond or bonds in form and with coverage and with a company reasonably
satisfactory to the Buyer and with respect to such individuals or groups of
individuals as the Buyer may designate.
(b) Each of the Sellers for so long as one of the Sellers is the
Servicer of the Transferred Mortgage Assets shall cause (i) all improvements on
the land covered by each Mortgage related to any Transferred Mortgage Assets to
be kept continuously insured by responsible insurance companies against fire and
extended coverage hazards under policies, binders, letters, or certificates of
insurance, with a standard mortgagee clause in favor of the original mortgagee
and its successors and assigns or, in the case of a MERS Designated Mortgage
Loan, the beneficial owner of such mortgage loan, and (ii) each such policy to
be in an amount equal to the lesser of the maximum insurable value of the
improvements or the original principal amount of the Mortgage, without reduction
by reason of any co-insurance, reduced rate contribution, or similar clause of
the policies or binders.
(c) In the event that any of the Sellers shall obtain and maintain
a blanket policy issued by an issuer that has a Best rating acceptable to Xxxxxx
Xxx insuring against hazard losses
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on all of the Mortgage Loans, then, to the extent such policy provides coverage
in an amount equal to the amount required pursuant to Section 5.05(b) and
otherwise complies with all other requirements of Section 5.05(b), it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
5.05(b), it being understood and agreed that such policy may contain a
deductible clause, in which case any such Seller shall, in the event that there
shall not have been maintained on the related mortgaged property a policy
complying with Section 5.05(b), and there shall have been a loss which would
have been covered by such policy, deposit in the Collection Account the amount
not otherwise payable under the blanket policy because of such deductible
clause. In connection with its activities as servicer of the Mortgage Loans, the
applicable Seller agrees to prepare and present, on behalf of the Buyer, claims
under any such blanket policy in a timely fashion in accordance with the terms
of such policy. Upon request of the Buyer or its assigns, such Seller shall
cause to be delivered to the Buyer or its assigns a certified true copy of such
policy and shall obtain a statement from the insurer thereunder that such policy
shall in no event be terminated or materially modified without thirty days'
prior written notice to the Buyer or its assigns.
Section 5.07. Accounts and Records.
Each of the Sellers shall keep books of record and account in which
full, true and correct entries will be made of all material dealings or
transactions in relation to its business and activities, in accordance with
GAAP. Each of the Sellers shall maintain and implement administrative and
operating procedures (including, without limitation, an ability to re-create all
records pertaining to the performance of each of the Sellers' obligations under
the Take-Out Commitments and Xxxxxx and other agreements made with reference to
any Mortgage Loans in the event of the destruction of the originals of such
records) and keep and maintain all documents, books, records, computer tapes and
other information necessary or advisable for the performance by the Sellers of
their obligations. Each of the Sellers will keep and maintain all servicing
records, pursuant to all Governmental Requirements and as required by all
Approved Take-Out Investors.
Section 5.08. Periodic Visits.
Each of the Sellers shall permit any officer, employee or agent of the
Administrative Agent (including an independent certified public accountant
selected by the Administrative Agent) to visit (each such visit, a "Periodic
Visit") and inspect any of its Properties, examine its books of record and
accounts, documents (including without limitation computer tapes and disks),
telecopies and extracts from the foregoing, and discuss its affairs, finances
and accounts with its officers, accountants, and auditors, and to review the
business of originating the Mortgage Loans, the sale of the Mortgage Loans by
the Sellers to the Buyer, and the servicing of the Mortgage Loans by the
Servicer, including the Servicer's collections systems, all during reasonable
business hours and as often as the Administrative Agent may desire and no more
than twice a year unless an Event of Default has occurred and is continuing. The
Buyer agrees to pay the reasonable costs of reviews and inspections performed
pursuant to this Section 6.8, including the costs and expenses charged by the
certified public accountant in preparing and delivering to the Administrative
Agent with respect to the certified public accountant's review on a scope and in
a form reasonably acceptable to the Administrative Agent and each Managing Agent
(such report, a "Report of Visit").
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Section 5.09. Notice of Certain Events.
Each of the Sellers shall promptly notify the Buyer in writing upon (i)
the commencement of, or any determination in, any legal, judicial or regulatory
proceedings that, if adversely determined, could also be a Default or an Event
of Default under this Agreement; (ii) any dispute between any of the Sellers and
any Governmental Authority or any other Person that, if adversely determined,
could reasonably be expected to have a Material Adverse Effect; (iii) any change
in the business or financial condition of any of the Sellers, including, without
limitation, a Seller's insolvency that could reasonably be expected to have a
Material Adverse Effect; (iv) any event or condition known to it that, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect; (v) the receipt of any notice from, or the taking of any other action by
any Approved Take-Out Investor indicating an intent not to honor, or claiming a
default under a Take-Out Commitment that could reasonably be expected to have a
Material Adverse Effect if such Take-Out Commitment is not replaced with another
Take-Out Commitment or Hedge, together with a detailed statement by a
responsible officer of the applicable Seller specifying the notice given or
other action taken by such Approved Take-Out Investor and the nature of the
claimed default and what action such Seller is taking or proposes to take with
respect thereto, (vi) the receipt of any notice from, and or the taking of any
action by any Governmental Authority indicating an intent to cancel the
applicable Seller's right to be either a seller or servicer of such Governmental
Authority's insured or guaranteed Mortgage Loans and (vii) the receipt of any
notice of any final judgment or order for payment of money applicable to any of
the Sellers that could reasonably be expected to have a Material Adverse Effect.
Section 5.10. Performance of Certain Obligations.
Each of the Sellers shall perform and observe each of the provisions of
each Mortgage Loan transferred hereunder and the related Take-Out Commitment or
Hedge on its part to be performed or observed and will cause all things to be
done that are necessary to have each item of the Transferred Mortgage Assets
comply with the requirements of the related Take-Out Commitment or Hedge.
Section 5.11. Notice of Default.
Each of the Sellers shall furnish to the Buyer immediately upon
becoming aware of the existence of any Default or Event of Default, a written
notice specifying the nature and period of existence thereof and the action that
such Seller is taking or proposes to take with respect thereto.
Section 5.12. Compliance with Laws and Material Agreements.
Each of the Sellers shall comply with (a) all applicable law, rules,
regulations and orders, and (b) material agreements, indentures, mortgages and
corporate documents.
Section 5.13. Deposits of Proceeds.
Each of the Sellers shall not deposit or otherwise credit, or cause or
permit to be so deposited or credited, to the Collection Account, cash or cash
proceeds other than payments in respect of Take-Out Commitments and other
Collections of Transferred Mortgage Assets.
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Section 5.14. Closing Instructions.
Each of the Sellers agrees to indemnify and hold the Buyer and its
assignee harmless from and against any loss, including attorneys' fees and
costs, attributable to the failure of a title insurance company, agent or
approved attorney to comply with the disbursement or instruction letter or
letters of such Seller relating to any Mortgage Loan included in the Transferred
Mortgage Assets.
Section 5.15. Special Affirmative Covenants Concerning Transferred
Mortgage Assets.
(a) Each of the Sellers shall service or cause to be serviced
pursuant to the Loan Agreement all Mortgage Loans sold by it and included in the
Transferred Mortgage Assets in accordance with the standard requirements of the
issuers of Take-Out Commitments or Xxxxxx covering the same and all applicable
Xxxxxx Mae or Xxxxxxx Mac requirements, including without limitation taking all
actions necessary to enforce the obligations of the Obligors under such Mortgage
Loans. Each of the Sellers shall hold all escrow funds collected in respect of
Mortgage Loans, without commingling the same with any other non-escrow funds and
in accordance with applicable law, and apply the same for the purposes for which
such funds were collected.
(b) Each of the Sellers shall, no less than on an annual basis,
review financial statements, compliance with financial parameters, Xxxxxx
Mae/Xxxxxxx Mac approvals (if applicable) and state licenses of all Persons from
whom such Seller acquires Mortgage Loans.
Section 5.16. Limitations on Mergers and Dissolutions.
Each of the Sellers shall not (i) merge or consolidate with or into any
corporation or other entity, unless such Seller is the surviving entity of any
such merger or consolidation nor (ii) liquidate or dissolve.
Section 5.17. Fiscal Year.
The Sellers shall not change their fiscal year other than to conform
with changes that may be made to the Performance Guarantor's fiscal year and
then only after notice to the Buyer and after whatever amendments are made to
this Agreement as may be required by the Buyer in order that the reporting
criteria for the financial covenants contained in this Article V remain
substantially unchanged.
Section 5.18. Actions with Respect to Transferred Mortgage Assets.
The Sellers shall not:
(a) Compromise, extend, release, or adjust payments on any
Transferred Mortgage Loan, accept a conveyance of mortgaged Property in full or
partial satisfaction of any Mortgage debt or release any Mortgage securing or
underlying any Transferred Mortgage Loan except as permitted by the related
Approved Take-Out Investor or as contemplated in the servicing guidelines
distributed thereby;
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(b) Agree to the amendment or termination of any Take-Out
Commitment in which the Buyer has an interest or to substitution of a Take-Out
Commitment for a Take-Out Commitment in which the Buyer has an interest
hereunder; or
(c) Permit the payment instructions relating to a Take-Out
Commitment to provide for payment to any Person except directly to the
Collection Account.
Section 5.19. Tangible Net Worth.
The Sellers shall not:
(i) Permit at any time AHMIC's Tangible Net Worth to be less
than $685,000,000, plus 75% of the Net Cash Proceeds of any capital
stock (including preferred stock) issued by AHMIC after June 30, 2005.
(ii) Permit at any time the Tangible Net Worth of American
Home Mortgage Servicing, Inc. to be less than $30,000,000.
(iii) Permit at any time the Tangible Net Worth of American
Home Mortgage Corp. to be less than $21,000,000.
Section 5.20. Employee Benefit Plans.
The Sellers shall not permit any of the events or circumstances
described in Section 4.01(r) to exist or occur.
Section 5.21. Change of Principal Office and Organization.
The Sellers shall not move their principal offices, executive offices
or principal places of business from the addresses set forth in Section 4.1(p)
or organize under the law of any jurisdiction other than the State under which
they are organized as of the date hereof (whether changing their jurisdiction of
organization or organizing under an additional jurisdiction) without 30 days'
prior written notice to the Administrative Agent, which shall be accompanied by
copies of all necessary UCC-3 amendments, with evidence of filing thereon, to
all UCC-1 financing statements filed in connection with the Agreement.
Section 5.22. [Reserved].
Section 5.23. Delivery of Wet Loans.
Each of the Sellers shall deliver to the Collateral Agent, within nine
(9) Business Days after the date of origination of any Wet Loan from such
Seller, the Principal Mortgage Documents relating to such Wet Loan.
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Section 5.24. Change in Business.
The Sellers will not make any change in the character of its business
that would adversely affect the collectability of the Transferred Mortgage
Assets or the ability of any of the Sellers to perform its obligations under
this Agreement.
Section 5.25. Separate Conduct of Business.
Each of the Sellers will: (i) maintain separate corporate or entity
records and books of account from those of the Buyer; (ii) conduct its business
from an office separate from that of the Buyer; (iii) ensure that all oral and
written communications, including, without limitation, letters, invoices,
purchase orders, contracts, statements and applications, will be made solely in
its own name; (iv) have stationery and other business forms separate from those
of the Buyer; (v) not hold itself out as having agreed to pay, or as being
liable for, the obligations of the Buyer; (vi) not engage in any transaction
with the Buyer except as contemplated by this Agreement or as permitted by the
Loan Agreement; (vii) continuously maintain as official records the resolutions,
agreements and other instruments underlying the transactions contemplated by
this Agreement; and (viii) disclose on its annual financial statements (A) the
effects of the transactions contemplated by this Agreement in accordance with
GAAP and (B) that the assets of the Buyer are not available to pay the creditors
of such Seller.
Section 5.26. Sales, Liens, Etc.
Except for the sales of Transferred Mortgage Assets contemplated
herein, the Sellers will not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Transferred Mortgage Asset or Mortgage Loan Collateral, or
Collections related thereto, or upon or with respect to any account to which any
Collections of any Transferred Mortgage Assets are sent, or assign any right to
receive income in respect thereof.
Section 5.27. Operations and Properties.
Each of the Sellers shall act prudently and in accordance with
customary industry standards in managing and operating its Property and shall
continue to underwrite, hedge and sell Mortgage Loans in the same diligent
manner it has applied in the past and take no greater credit or market risks
than are currently being borne by it.
Section 5.28. Performance Guarantor Credit Rating.
If at any time any of the senior debt of AHMIC, which is publicly held,
shall fail to bear a rating of at least BB by S&P, Ba2 by Xxxxx'x or BB by
Fitch, each of the Sellers shall give the Buyer or its assigns written notice of
such change in rating, within two Business Days of the date on which such change
is announced by either of these rating agencies.
Section 5.29. Xxxxxx.
Each of the Sellers shall obtain, and maintain in full force and
effect, Xxxxxx, as of each determination, with an aggregate purchase price at
least equal to the total of the original principal
41
balances of the Sellers' entire portfolio of Mortgage Loans plus the Buyer's
entire portfolio of Mortgage Loans. Each of such Take-Out Commitments shall
reflect only those terms and conditions as are permitted hereunder or are
acceptable to the Administrative Agent. Each of the Sellers shall obtain, and
maintain in full force and effect, forward purchase commitments (which may
include options to sell Mortgage Loans to Approved Take-Out Investors, so long
as the Approved Take-Out Investor is bound thereby) issued by Approved Take-Out
Investors and obligating such Approved Take-Out Investors to purchase a portion
of such Seller's subsequently acquired Mortgage Loans.
Section 5.30. Environmental Compliance.
Each of the Sellers shall use and operate all of its facilities and
properties in compliance with all environmental laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and handle
all hazardous materials in compliance with all applicable environmental laws.
Section 5.31. Approved Take-Out Investor Concentration Limits.
The Sellers covenant that, at any time:
(a) the portion of the total Collateral Value that may be
attributable to any single Approved Take-Out Investor listed on Schedule II
pursuant to one or more Take-Out Commitments shall not exceed the concentration
limit for such Approved Take-Out Investor as set forth on Schedule II (as the
same may be updated from time to time), and
(b) the portion of Mortgage Loans covered by a single Approved
Take-Out Investor with (i) a rating of its short-term debt of A-3 or lower (or,
if a short-term rating is not available, a rating of long-term debt of BBB- or
lower) by S&P, a rating of its short-term debt of P-3 or lower (or, if a
short-term rating is not available, a rating of the long-term debt of Baa3 or
lower) by Xxxxx'x or a rating of its short-term debt of F3 or lower (or, if a
short-term rating is not available, a rating of long-term debt of BBB- or lower)
by Fitch (it being understood that if the ratings assigned by S&P, Xxxxx'x and
Fitch are split, the lowest rating will control, and it being understood that if
only one Rating Agency has assigned a rating, that rating will control) shall
not exceed fifteen percent (15%) of the Maximum Facility Amount.
ARTICLE VI
COVENANTS
Section 6.01. Servicing.
So long as the Loan Agreement remains in effect, the servicing,
administration and collection of the Transferred Mortgage Assets will be
conducted by the Person designated as the Servicer pursuant to the Loan
Agreement and in the manner provided in the Loan Agreement. If the Loan
Agreement is terminated, the parties hereto agree to enter into a servicing
arrangement on terms substantially similar to those contained in the Loan
Agreement. The parties
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acknowledge that American Home Mortgage Servicing, Inc. has been designated as
the initial Servicer pursuant to the terms and provisions of the Loan Agreement.
Section 6.02. Releases of Mortgage Notes for Servicing.
The Buyer (or the Servicer on behalf of the Buyer) may from time to
time request, in writing, that the Collateral Agent deliver a Mortgage Note that
constitutes Transferred Mortgage Assets for correction or servicing actions
under the Collateral Agent's "Trust Receipt and Security Agreement Letter", in
the form provided for in the Collateral Agency Agreement, as and to the extent
permitted pursuant to Section 3.5 of the Collateral Agency Agreement.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default.
(a) Section 11 is amended by deleting such Section in its entirety
and substituting the following therefor:
(i) any of the Sellers fails to make (A) any payment required
under Section 2.03 or 2.04 by the day that such payment is due, (B)
payment, when due, of any cost, expense, indemnity payment or other
amount due hereunder, and such failure continues for five calendar days
after written notice thereof; or, (C) while one of the Sellers is
acting as the Servicer, the Servicer fails to make any payment or
deposit to be made by it under this Agreement or the Master Repurchase
Agreement when such payment is due if such failure is not cured within
five calendar days of the due date of such payment as deposit; or
(ii) any of the Sellers or, while one of the Sellers is acting
as the Servicer, the Servicer fails to keep or perform any covenant or
material obligations contained in this Agreement or the Master
Repurchase Agreement (other than as referred to in clause (i) above)
and such failure continues unremedied beyond the expiration of any
applicable grace or notice period which may be expressly provided for
in such covenant or material obligations; or
(iii) [Reserved]
(iv) any warranty or representation by or on behalf of any of
the Sellers contained in this Agreement or the Master Repurchase
Agreement or any statement warranty or representation in any Purchase
Request, officer's certificate or other writing furnished in connection
with this Agreement, proves to have been incorrect or misleading in any
material respect as of the date made or deemed made, provided that a
breach of a representation or covenant that affects an individual
Mortgage Loan shall not constitute an Event of Default unless made
knowingly or intentionally ; or
43
(v) (i) any of the Sellers, the Servicer (so long as the
Servicer and one of the Sellers are the same entity) or either
Performance Guarantor fails to make when due or within any applicable
grace period any payment on any other Indebtedness with an unpaid
principal balance of over $1,500,000.00 with respect to each Seller or
the Servicer ($10,000,000 in the case of a Performance Guarantor); or
(ii) any event or condition occurs under any provision contained in any
such obligation or any agreement securing or relating to such
obligation (or any other breach or default under such obligation or
agreement occurs) if the effect thereof is to cause or permit with the
giving of notice or lapse of time or both the holder or trustee of such
obligation to cause such obligation to become due prior to its stated
maturity; or (iii) any such obligation becomes due (other than by
regularly scheduled payments) prior to its stated maturity; or (iv) any
of the foregoing occurs with respect to any one or more items of
Indebtedness of any of the Sellers, the Servicer (so long as the
Servicer and one of the Sellers are the same entity) or either
Performance Guarantor with unpaid principal balances exceeding, in the
aggregate, $1,500,000.00 with respect to each Seller or the Servicer
($10,000,000 in the case of a Performance Guarantor); or
(vi) any Purchase of Mortgage Assets hereunder and the
Mortgage Loan Collateral and the Collections with respect thereto shall
for any reason cease to constitute valid and perfected ownership of
such Mortgage Assets, Mortgage Loan Collateral and Collections free and
clear of any Adverse Claim and any of the Sellers fails to repurchase
such Mortgage Assets pursuant to Section 2.04; or
(vii) any of the Sellers shall generally not pay its debts as
they become due, or shall admit in writing its inability to pay its
debts, or shall make a general assignment for the benefit of creditors;
or
(viii) any of the Sellers shall (A) apply for or consent to
the appointment of a receiver, trustee, Collateral Agent, intervenor or
liquidator of it or of all or a substantial part of its assets, (B)
file a voluntary petition in bankruptcy, (C) file a petition or answer
seeking reorganization or an arrangement with creditors or to take
advantage of any Debtor Laws, (D) file an answer admitting the material
allegations of, or consent to, or default in answering, a petition
filed against it in any bankruptcy, reorganization or insolvency
proceeding, or (E) take corporate action for the purpose of effecting
any of the foregoing; or
(ix) an involuntary petition or complaint shall be filed
against any of the Sellers seeking bankruptcy or reorganization of any
of the Sellers or the appointment of a receiver, custodian, trustee,
intervenor or liquidator of any of the Sellers, or all or substantially
all of the assets of any of the Sellers, and such petition or complaint
shall not have been dismissed within 60 days of the filing thereof; or
an order, order for relief, judgment or, decree shall be entered by any
court of competent jurisdiction or other competent authority approving
a petition or complaint seeking reorganization of any of the Sellers or
appointing a receiver, custodian, trustee, intervenor or liquidator of
any of the Sellers, or of all or substantially all of assets of any of
the Sellers; or
(x) an Event of Default shall have occurred under the Loan
Agreement;
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(each of the foregoing, an "Event of Default") then, and in any such event, the
Buyer may, by notice to the applicable Seller, take either or both of the
following actions: (A) declare the Termination Date to have occurred (in which
case the Termination Date shall be deemed to have occurred) and (B) if the Event
of Default relates to one of the Sellers that is also the Servicer, subject to
the provisions of the Loan Agreement, designate another Person to succeed such
Seller as Servicer (without payment of any servicer termination fees); provided,
that, automatically upon the occurrence of any event (without any requirement
for the passage of time or the giving of notice) described in clauses (vii),
(viii) or (ix) of this Paragraph 7.01(a), the Termination Date shall occur. Upon
any such declaration or designation or upon such automatic termination, the
Buyer shall have, in addition to the rights and remedies under this Agreement,
all other rights and remedies with respect to the Transferred Mortgage Assets
provided after default under the UCC and under other applicable law, which
rights and remedies shall be cumulative.
(b) The parties hereto recognize that each of the Sellers'
obligations to Buyer under this Agreement and the Master Repurchase Agreement
are special, unique and of extraordinary character. If an Event of Default
occurs hereunder, each of the Sellers agrees that Buyer may enforce this
Agreement and the Master Repurchase Agreement by a proceeding for specific
performance or other equitable remedy including, without limitation, a
proceeding in which replevin or injunction is sought by Buyer. Each of the
Sellers hereby waives to the fullest extent permitted by law any and all rights
it may have by statute, constitution or otherwise, to (i) assert the defense of
adequacy of a remedy at law that might be asserted as a bar to such proceeding,
and (ii) the fixing, imposition or posting of a bond or other security by Buyer
as a condition to obtaining any equitable relief sought by Buyer, which relief
each of the Sellers further agrees may be obtained ex parte without prior notice
to any of the Sellers provided a hearing is substantially provided the
applicable Seller within a reasonable time after any ex parte relief may be
granted Buyer. Each of the Sellers further agrees that the rights and remedies
hereunder are cumulative, and are not exclusive of any rights, powers,
privileges, or remedies, now or thereafter existing, at law, or in equity or
otherwise.
Section 7.02. Remedies.
(a) If an Event of Default occurs with respect to any of the
Sellers, the following rights and remedies are available to the Buyer:
(i) At the option of the Buyer, exercised by written notice to
the applicable Seller (which option shall be deemed to have been
exercised, even if no notice is given, immediately upon the occurrence
of an Act of Insolvency), the Repurchase Date for each Transaction
hereunder shall be deemed immediately to occur.
(ii) If the Buyer exercised or is deemed to have exercised the
option referred to in subsection (a)(i) of this Section:
(A) the applicable Seller's obligations
hereunder to repurchase all Purchased
Mortgage Assets in such Transactions shall
thereupon become immediately due and
payable, and
45
(B) to the extent permitted by applicable law,
the Repurchase Price with respect to each
such Transaction shall be increased by the
aggregate amount obtained by daily
application of, on a 360 day per year basis
for the actual number of days during the
period from and including the date of the
exercise or deemed exercise of such option
to but excluding the date of payment of the
Repurchase Price as so increased, (x) the
greater of the Prime Rate or the Pricing
Rate for each such Transaction to (y) the
Repurchase Price for such Transaction as of
the Repurchase Date as determined pursuant
to subsection (a)(i) of this Section
(decreased as of any day by (I) any proceeds
from the sale of Purchased Mortgage Assets
applied to the Repurchase Price pursuant to
subsection (a)(iii) of this Section, and
(II) any amounts applied to the Repurchase
Price pursuant to subsection (a)(iii) of
this Section).
(iii) The Buyer may (A) immediately sell, without notice or demand
of any kind, at a public or private sale and at such price or
prices as the Buyer may reasonably deem satisfactory any or
all Mortgage Assets subject to a Transaction hereunder or (B)
in its sole discretion elect, in lieu of selling all or a
portion of such Purchase Assets, to give the applicable Seller
credit for such Purchase Assets in an amount equal to the
Collateral Value of the Purchased Mortgage Assets against the
aggregate unpaid Repurchase Price and any other amounts owing
by the applicable Seller hereunder. The proceeds of any
disposition of Purchased Mortgage Assets shall be applied
first to the costs and expenses incurred by the Buyer in
connection with the defaulting Seller's default; second to
Buyer's costs (including fees and expenses of counsel to
Buyer) of cover and/or related hedging or similar transactions
(including any transaction described in paragraph 8 of the
Master Repurchase Agreement); third to the Repurchase Price;
and fourth to any other outstanding obligation of the
applicable Seller to the Buyer or its affiliates.
(iv) The parties recognize that it may not be possible to purchase
or sell all of the Purchased Mortgage Assets on a particular
Business Day, or in a transaction with the same purchaser, or
in the same manner because the market for such Purchased
Mortgage Assets may not be liquid. In view of the nature of
the Purchased Mortgage Assets, the parties agree that
liquidation of a Transaction or the underlying Purchased
Mortgage Assets does not require a public purchase or sale and
that a good faith private purchase or sale shall be deemed to
have been made in a commercially reasonable manner.
Accordingly, Buyer may elect, in its sole discretion, the time
and manner of liquidating any Purchased Mortgage Assets and
nothing contained herein shall (A) obligate Buyer to liquidate
any Purchased Mortgage Assets on the occurrence of an Event of
Default or to liquidate all Purchased Mortgage Assets in the
same manner or on the same Business Day or (B) constitute a
waiver of any right or remedy of Buyer. However, in
recognition of the parties' agreement that the Transactions
hereunder have been entered into in consideration of and in
reliance upon the fact that all Transactions hereunder
constitute a single business and contractual relationship and
that each Transaction has been entered into in consideration
of the other Transactions, the parties further
46
agree that Buyer shall liquidate all Transactions hereunder
upon the occurrence of an Event of Default as quickly as is
prudently possible in the good faith judgment of Buyer.
(v) Buyer shall, without regard to the adequacy of the security
for any of the Sellers' obligations under this Agreement and
the Master Repurchase Agreement, 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 Mortgage Assets or
any portion thereof, and collect the payments due with respect
to the Purchase Assets or any portion thereof. The Sellers
shall pay all costs and expenses incurred by Buyer in
connection with the appointment and activities of such
receiver.
(vi) Buyer shall have all the rights and remedies provided herein,
provided by applicable federal, state, foreign, and local laws
(including, without limitation, the rights and remedies of a
secured party under the Uniform Commercial Code of the State
of New York, to the extent that the Uniform Commercial Code is
applicable, and the right to offset any mutual debt and
claim), in equity, and under any other agreement between Buyer
and any of the Sellers.
(vii) Buyer may exercise one or more of the remedies available to
Buyer immediately upon the occurrence of an Event of Default
and, except to the extent provided in subsections (a)(i) and
(iii) of this Section, at any time thereafter without notice
to any of the Sellers. All rights and remedies arising under
this Agreement and the Master Repurchase Agreement as amended
from time to time hereunder are cumulative and not exclusive
of any other rights or remedies which Buyer may have.
(viii) In addition to its rights hereunder, Buyer shall have the
right to proceed against any assets of any of the Sellers
which may be in the possession of Buyer or its designee
(including the Custodian), including the right to liquidate
such assets and to set off the proceeds against monies owed by
any of the Sellers to Buyer pursuant to this Agreement and the
Master Repurchase Agreement. Buyer may set off cash, the
proceeds of the liquidation of the Purchased Mortgage Assets
or proceeds thereof, and all other sums or obligations owed by
the Buyer to the Sellers against all of Seller's obligations
to Buyer, whether under this Agreement and the Master
Repurchase Agreement, under a Transaction, or under any other
agreement between the parties, or otherwise, whether or not
such obligations are then due, without prejudice to Buyer's
rights to recover any deficiency. Any cash, proceeds, or
property in excess of any amounts due, or which Buyer
reasonably believes may become due, to it from any of the
Sellers shall be returned to the applicable Seller after
satisfaction of all obligations of each of the Sellers to
Buyer.
(ix) Buyer may enforce its rights and remedies hereunder without
prior judicial process or hearing, and each of the Sellers
hereby expressly waives any defense any of the Sellers might
otherwise have to require Buyer to enforce its rights by
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judicial process. Each of the Sellers also waives any defense
any of the Sellers might otherwise have arising from the use
of nonjudicial process, enforcement and sale of all or any
portion of the Repurchase Items, or from any other election of
remedies. Each of the Sellers 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.
(x) Notwithstanding anything to the contrary herein, the Buyer
shall have no right to proceed against any assets of any of
the Sellers other than the Purchased Mortgage Assets in the
event of a default in any of the Sellers' obligations to
repurchase any Purchased Mortgage Assets pursuant to Section
3(b) or 3(c) of the Master Repurchase Agreement, as modified
by this Agreement. Such obligations of the Sellers to
repurchase Purchased Mortgage Assets pursuant to Section 3(b)
and 3(c) of the Master Repurchase Agreement, as modified by
this Agreement, shall be recourse solely to the Purchased
Mortgage Assets, in the aggregate, and the Sellers shall have
no obligation in respect of any deficiencies. By contrast,
each of the Sellers' obligations to repurchase Purchased
Mortgage Assets pursuant to Section 2.5 hereunder shall be
recourse to the assets of any of the Sellers.
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnities by the Sellers.
Without limiting any other rights which the Buyer may have hereunder or
under applicable law, each of the Sellers hereby agrees to indemnify the Buyer
and its assigns and transferees (each, an "Indemnified Party") from and against
any and all damages, claims, losses, liabilities and related costs and expenses,
including attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts"), awarded against or incurred
by any Indemnified Party arising out of or as a result of this Agreement or the
purchase of any Transferred Mortgage Assets or in respect of any Transferred
Mortgage Asset or any related Mortgage Loan Collateral, including, without
limitation, arising out of or as a result of:
(a) the inclusion, or purported inclusion, in any Purchase of any
Mortgage Asset that is not an Eligible Mortgage Asset on the date of such
Purchase, or the characterization in any statement made by any of the Sellers of
any Transferred Mortgage Asset as an Eligible Mortgage Asset which is not an
Eligible Mortgage Asset as of the date of such statement;
(b) any representation or warranty or statement made or deemed
made by any of the Sellers (or any of its officers) under or in connection with
this Agreement, which shall have been incorrect when made;
(c) the failure by any of the Sellers to comply with any
applicable law, rule or regulation with respect to any Transferred Mortgage
Asset or the related Mortgage Loan
48
Collateral, or the failure of any Transferred Mortgage Asset or the related
Mortgage Loan Collateral to conform to any such applicable law, rule or
regulation;
(d) the failure to vest in the Buyer absolute ownership of the
Mortgage Assets that are, or that purport to be, the subject of a Purchase under
this Agreement and the Mortgage Loan Collateral and Collections in respect
thereof, free and clear of any Adverse Claim;
(e) the failure of any of the Sellers to have filed, or any delay
in filing, financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with respect to
any Mortgage Assets that are, or that purport to be, the subject of a Purchase
under this Agreement and the Mortgage Loan Collateral and Collections in respect
thereof, whether at the time of any Purchase or at any subsequent time;
(f) any claim by any Obligor arising out of any of the Sellers'
activities in connection with originating or purchasing any Transferred Mortgage
Asset or any offset by any Obligor against any of the Sellers arising out of
acts by any of the Sellers;
(g) any failure of the Sellers, as Seller or Servicer, to perform
its duties or obligations in accordance with the provisions hereof or to perform
its duties or obligations under any Mortgage Loan Collateral related to a
Transferred Mortgage Asset;
(h) the commingling of Collections of Transferred Mortgage Assets
by any of the Sellers or any designee of any of the Sellers, as Servicer or
otherwise, at any time with other funds of any of the Sellers or any Affiliate
of any of the Sellers;
(i) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases or the ownership of Transferred
Mortgage Assets or the Mortgage Loan Collateral or Collections with respect
thereto or in respect of any Transferred Mortgage Asset or related Mortgage Loan
Collateral;
(j) any failure of any of the Sellers to comply with its covenants
contained in Section 5.01; or
(k) any claim brought by any Person other than an Indemnified
Party arising from any activity by any of the Sellers or any Affiliate of any of
the Sellers in servicing, administering or collecting any Transferred Mortgage
Asset.
It is expressly agreed and understood by the parties hereto (i) that
the foregoing indemnification is not intended to, and shall not, constitute a
guarantee of the collectability or payment of the Transferred Mortgage Assets
and (ii) that nothing in this Section 8.01 shall require any of the Sellers to
indemnify any Person (A) for Mortgage Assets which are not collected, not paid
or uncollectible on account of the insolvency, bankruptcy, or financial
inability to pay of the applicable Obligor, (B) for damages, losses, claims or
liabilities or related costs or expenses resulting from such Person's gross
negligence or willful misconduct, or (C) for any income taxes or franchise taxes
incurred by such Person arising out of or as a result of this Agreement or in
respect of any Transferred Mortgage Asset or any related Mortgage Loan
Collateral.
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ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement or consent to
any departure by any of the Sellers therefrom shall be effective unless in a
writing signed by the Buyer, and by any assignee of the Buyer if the amendment
or waiver in any way affects any right, remedy or obligation of the Buyer to
such assignee, and, in the case of any amendment, also signed by each of the
Sellers, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of the Buyer or any assignee to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
Section 9.02. Notices, Etc.
Any notice, demand or request required or permitted to be given under
or in connection with this Agreement, the Notes or the other Transaction
Documents (except as may otherwise be expressly required therein) shall be in
writing and shall be mailed by first class or express mail, postage prepaid, or
sent by telex, telegram, telecopy or other similar form of rapid transmission,
confirmed by mailing (by first class or express mail, postage prepaid) written
confirmation at substantially the same time as such rapid transmission, or
personally delivered to an officer of the receiving party. With the exception of
certain administrative and collateral reports that may be directed to specific
departments of the Administrative Agent, all such communications shall be
mailed, sent or delivered to the parties hereto at their respective addresses as
set forth on the signature page hereto, or at such other addresses or to such
officer's, individual's or department's attention as any party may have
furnished the other parties in writing. Any communication so addressed and
mailed shall be deemed to be given when so mailed, except with respect to
notices and requests given pursuant to Sections 2.3 and 3.3 of the Loan
Agreement. Communications related thereto shall not be effective until actually
received by the Collateral Agent, the Administrative Agent, the Issuer or the
Borrower, as the case may be; and any notice so sent by rapid transmission shall
be deemed to be given when receipt of such transmission is acknowledged, and any
communication so delivered in person shall be deemed to be given when receipted
for by, or actually received by, an authorized officer of the Collateral Agent,
the Administrative Agent or the Borrower, as the case may be.
Section 9.03. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the benefit
of each of the Sellers, the Buyer and their respective successors and assigns;
provided, however, that the Sellers may not assign their rights or obligations
hereunder or any interest herein without the prior written consent of the Buyer,
or as provided in the next sentence and any attempted assignment shall be null
and void. In connection with any sale or assignment by the Buyer of all or a
portion of the Transferred Mortgage Assets, the buyer or assignee (including
Xxxxxx Xxx, Xxxxxxx Mac or any other Approved Take-Out Investor or other
purchaser to whom rights under this
50
Agreement may be assigned but only with respect to an assignment made following
and during the continuance of an Event of Default), as the case may be, shall,
to the extent specifically provided in connection with its purchase or
assignment, under a master agreement or otherwise (in the case of Mortgage Loans
delivered to Xxxxxx Mae), have all rights and remedies of the Buyer under this
Agreement (as if such buyer or assignee, as the case may be, were the Buyer
hereunder) and without limitation of the foregoing, all representations and
warranties (including Xxxxxx Xxx Representations and Warranties in the case of
Mortgage Loans delivered to Xxxxxx Mae) made by each of the Sellers to Buyer
shall be directly enforceable by such buyer or assignee, except to the extent
specifically provided in the agreement between the Buyer and such buyer or
assignee, as the case may be.
(b) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time, after the Termination Date, when all
of the Obligations are paid in full; provided, however, that rights and remedies
with respect to any breach of any representation and warranty made by each of
the Sellers pursuant to Article IV and the provisions of Article VIII and
Sections 9.04 and 9.05 shall be continuing and shall survive any termination of
this Agreement.
Section 9.04. Costs, Expenses and Taxes, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the
Buyer pursuant to Article VIII hereof, each of the Sellers agrees to pay on
demand all costs and expenses in connection with the preparation, execution and
delivery of this Agreement and the other documents and agreements to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Buyer with respect thereto and with
respect to advising the Buyer as to its rights and remedies under this
Agreement, and the each of Sellers agrees to pay all reasonable costs and
expenses, if any (including counsel fees and expenses), in connection with the
enforcement of this Agreement and the other documents to be delivered hereunder
excluding, however, any costs of enforcement or collection of Transferred
Mortgage Assets which are not paid on account of the insolvency, bankruptcy or
financial inability to pay of the applicable Obligor.
(b) In addition, each of the Sellers agrees to pay any and all
stamp and other taxes and fees payable in connection with the execution,
delivery, filing and recording of this Agreement or the other documents or
agreements to be delivered hereunder, and each of the Sellers agrees to save
each Indemnified Party harmless from and against any liabilities with respect to
or resulting from any delay in paying or omission to pay such taxes and fees.
Section 9.05. No Proceedings.
Each of the Sellers hereby agrees that it will not institute against
the Buyer any proceeding of the type referred to in Section 7.01(a)(viii) or
(ix) so long as there shall not have elapsed one year plus one day since the
later of (i) the Termination Date and (ii) the date on which all of the
Obligations are paid in full.
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Section 9.06. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW WHICH SHALL APPLY HERETO).
Section 9.07. Third Party Beneficiary.
Each of the parties hereto hereby acknowledges that the Buyer may
assign or grant a security interest in all or any portion of its rights under
this Agreement and that such assignees may (except as otherwise agreed to by
such assignees) further assign or grant a security interest in their rights
under this Agreement, and each of the Sellers hereby consents to any such
assignments or grants of security interests. All such assignees, including
parties to the Loan Agreement in the case of assignment or the grant of a
security interest to such parties, shall be third party beneficiaries of, and
shall be entitled to enforce the Buyer's rights and remedies under, this
Agreement to the same extent as if they were parties thereto, except to the
extent specifically limited under the terms of their assignment. Notwithstanding
any provision to the contrary contained in this Agreement, with respect to each
Mortgage Loan sold to Buyer that is subsequently sold to Xxxxxx Xxx, in addition
to the other rights and remedies granted herein, Xxxxxx Mae shall have, and may
exercise any and all rights and remedies that are available to Xxxxxx Xxx under
the Xxxxxx Mae Incorporated Documents as a result of a breach of any of the
Xxxxxx Xxx Representations and Warranties. Xxxxxx Mae's definition or
determination of what event constitutes a breach shall be determinable by Xxxxxx
Xxx under the terms of the Xxxxxx Mae Incorporated Documents. All rights and
remedies granted herein are cumulative and non-exclusive, and the exercise of
any one shall not preclude the exercise of others.
Section 9.08. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement.
Section 9.09. Repurchase Transactions.
Buyer may in its sole discretion engage in repurchase transactions with
the Purchased Mortgage Assets or pledge or hypothecate the Purchased Mortgage
Assets with a counterparty of Buyer's choice; provided, however, that no such
transaction by Buyer shall relieve Buyer of its obligations to any of the
Sellers in connection with the repurchase by any of the Sellers of any Purchased
Mortgage Assets in accordance with the terms of this Agreement and that, upon
demand by any of the Sellers, Buyer shall redeliver to such Seller such
repurchased Purchased Mortgage Assets as are specifically identified by such
Seller free and clear of any liens or encumbrances created, or permitted or
suffered to be created, by Buyer.
Section 9.10. Consent to Jurisdiction; Waiver of Immunities.
EACH PARTY HERETO HEREBY ACKNOWLEDGES AND AGREES THAT:
52
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS,
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT.
TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE
OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID TO EXECUTION,
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN
CONNECTION WITH THIS AGREEMENT.
53
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SELLER AND SERVICER: AMERICAN HOME MORTGAGE SERVICING, INC.
By: /s/ Xxxx X. Xxxx
-----------------------------------------
Name: Xxxx X. Xxxx
-----------------------------------------
Title: Executive Vice President, General Counsel
-----------------------------------------
& Secretary
-----------------------------------------
c/o American Home Mortgage Holdings, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
SELLER: AMERICAN HOME MORTGAGE CORP.
By: /s/ Xxxx X. Xxxx
-----------------------------------------
Name: Xxxx X. Xxxx
-----------------------------------------
Title: Executive Vice President, General Counsel
-----------------------------------------
& Secretary
-----------------------------------------
c/o American Home Mortgage Holdings, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
BUYER: AHM SPV I, LLC
By: /s/ Xxxx X. Xxxx
-----------------------------------------
Name: Xxxx X. Xxxx
-----------------------------------------
Title: Secretary
-----------------------------------------
c/o American Home Mortgage Holdings, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
54
