EXECUTION COPY
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SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
Between
CDC MORTGAGE CAPITAL INC., as Buyer
and
AMERICAN HOME MORTGAGE CORP.,
AMERICAN HOME MORTGAGE INVESTMENT CORP.,
AMERICAN HOME MORTGAGE ACCEPTANCE, INC.
AMERICAN HOME MORTGAGE HOLDINGS, INC., and
COLUMBIA NATIONAL, INCORPORATED, collectively, as Seller
Dated as of June 1, 2004
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TABLE OF CONTENTS
Page
1. APPLICABILITY............................................................1
2. DEFINITIONS..............................................................1
3. INITIATION; TERMINATION.................................................24
4. MARGIN AMOUNT MAINTENANCE...............................................32
5. INCOME PAYMENTS.........................................................32
6. REQUIREMENTS OF LAW.....................................................33
7. SECURITY INTEREST.......................................................35
8. PAYMENT, TRANSFER AND CUSTODY...........................................36
9. HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS.............................37
10. SELLER REPRESENTATIONS..................................................37
11. COVENANTS OF SELLER.....................................................42
12. EVENTS OF DEFAULT.......................................................49
13. REMEDIES................................................................51
14. INDEMNIFICATION AND EXPENSES............................................54
15. RECORDING OF COMMUNICATIONS.............................................55
16. SINGLE AGREEMENT........................................................55
17. NOTICES AND OTHER COMMUNICATIONS........................................55
18. ENTIRE AGREEMENT; SEVERABILITY..........................................56
19. NON-ASSIGNABILITY.......................................................56
20. TERMINABILITY...........................................................56
21. GOVERNING LAW...........................................................57
22. Submission To Jurisdiction; Waivers.....................................57
23. NO WAIVERS, ETC.........................................................58
24. SERVICING...............................................................58
25. INTENT..................................................................59
26. PERIODIC DUE DILIGENCE REVIEW...........................................60
27. BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT.................................60
28. MISCELLANEOUS...........................................................62
29. CONFIDENTIALITY.........................................................62
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30. CONFLICTS...............................................................63
31. Set-Off.................................................................63
32. Obligations Joint and Several...........................................63
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EXHIBITS
SCHEDULE 1 Representations and Warranties Re:
Mortgage Loans
SCHEDULE 2 Jurisdictions of Incorporation and
Organizational Identification
Numbers of Seller Entities
EXHIBIT I Transaction Request
EXHIBIT II Underwriting Guidelines
EXHIBIT III Form of Opinion Letter
EXHIBIT IV UCC Filing Jurisdictions
EXHIBIT V Form of Account Agreement
EXHIBIT VI Form of True Sale Certification
EXHIBIT VII Form of Servicer Notice
EXHIBIT VIII Form of Request for Additional
Transactions For Excess Margin
EXHIBIT IX Form of Compliance Report
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SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT
This is a SECOND AMENDED AND RESTATED MASTER REPURCHASE
AGREEMENT, dated as of June 1, 2004, among AMERICAN HOME MORTGAGE CORP., a
New York corporation ("AHMC"), AMERICAN HOME MORTGAGE INVESTMENT CORP., a
Maryland corporation ("AHMIC"), AMERICAN HOME MORTGAGE ACCEPTANCE, INC., a
Maryland corporation ("AHMA"), AMERICAN HOME MORTGAGE HOLDINGS, INC., a
Delaware corporation ("AHMH"), COLUMBIA NATIONAL, INCORPORATED, a Maryland
corporation ("CNI" and, collectively with AHMC, AHMIC, AHMA and AHMH, the
"Seller" and each a "Seller Entity") and CDC MORTGAGE CAPITAL INC., a
New York corporation ("Buyer").
1. APPLICABILITY
From time to time the parties hereto may enter into transactions
("Committed Transactions") in which Seller agrees to transfer to Buyer
Mortgage Loans against the transfer of funds by Buyer, with a simultaneous
agreement by Buyer to transfer to Seller such Mortgage Loans on demand by
Buyer against the transfer of funds by Seller. Additionally, from time to
time the Buyer is prepared to consider entering into additional
transactions ("Uncommitted Transactions") in which Seller agrees to
transfer to Buyer Mortgage Loans against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such Mortgage
Loans on demand by Buyer, against the transfer of funds by Seller. Each
such Committed Transaction and Uncommitted Transaction shall be referred
to herein as a "Transaction" and shall be governed by this Agreement,
unless otherwise agreed in writing.
2. DEFINITIONS
As used herein, the following terms shall have the following meanings (all
terms defined in this Section 2 or in other provisions of this Agreement
in the singular to have the same meanings when used in the plural and vice
versa). Terms otherwise not defined herein shall have the meanings
assigned thereto in the Custodial and Disbursement Agreement.
"Account Agreement" shall mean a letter agreement among each Seller
Entity, Buyer, and the Bank substantially in the form of Exhibit V
attached hereto.
"Act of Insolvency" shall mean, with respect to any Person, (i) the filing
of a petition, commencing, or authorizing the commencement of any case or
proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law relating to the protection of creditors, or
suffering any such petition or proceeding to be commenced by another which
is consented to, not timely contested or results in entry of an order for
relief; (ii) the seeking or consenting to the appointment of a receiver,
trustee, custodian or similar official for such Person or any substantial
part of the property of such Person; (iii) the appointment of a receiver,
conservator, or manager for such Person by any governmental agency or
authority having the jurisdiction to do so; (iv) the making or offering by
such Person of a composition with its creditors or a general assignment
for the benefit of creditors; (v) the admission by such Person of its
inability to pay its debts
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or discharge its obligations as they become due or mature; or (vi) that
any governmental authority or agency or any person, agency or entity
acting or purporting to act under governmental authority shall have taken
any action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the property of such Person, or
shall have taken any action to displace the management of such Person or
to curtail its authority in the conduct of the business of such Person.
"Affiliate" shall mean with respect to any Person, any "affiliate" of such
Person, as such term is defined in the Bankruptcy Code.
"Agreement" shall mean this Master Repurchase Agreement, as the same may
be further amended, supplemented or otherwise modified in accordance with
the terms hereof.
"AHMA" shall mean American Home Mortgage Acceptance, Inc., a Maryland
corporation and its successors in interest.
"AHMC" shall mean American Home Mortgage Corp., a New York corporation
and its successors in interest.
"AHMH" shall mean American Home Mortgage Holdings, Inc., a Delaware
corporation and its successors in interest.
"AHMIC" shall mean American Home Mortgage Investment Corp., a Maryland
corporation and its successors in interest.
"ALTA" shall mean the American Land Title Association.
"Alt-A Mortgage Loan" shall mean an Eligible Asset which is a Mortgage
Loan made to a Mortgagor of "A" or "A-" credit quality, which is a secured
by a lien on a single-family Residential Dwelling and for which the
related Mortgagor has a FICO score of greater than 600. In no event shall
any Mortgage Loan be an "Alt-A Mortgage Loan" if the related Mortgagor
does not have a FICO score of at least 600 as of the date of origination.
"Alt-A First Mortgage Loan" shall mean an Eligible Asset which is an Alt-A
Mortgage Loan and a First Lien Mortgage Loan.
"Alt-A Second Mortgage Loan" shall mean an Eligible Asset which is an
Alt-A Mortgage Loan and a Second Lien Mortgage Loan.
"Appraised Value" shall mean the value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value
of the Mortgaged Property (or the related residential dwelling unit in the
Underlying Mortgaged Property, in the case of a Co-op Loan).
"Asset Schedule and Exception Report" shall have the meaning assigned
thereto in the Custodial and Disbursement Agreement.
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"Asset Value" shall mean as of any date of determination with respect to
(A) each Eligible Asset that is not a Repurchased Mortgage Loan, a HELOC,
an Alt-A Second Mortgage Loan or a Sub-Prime Second Mortgage Loan, the
Purchase Percentage applicable to such Eligible Asset multiplied by the
lesser of (a) the Market Value of such Mortgage Loan as of such date and
(b) the outstanding principal balance of such Eligible Asset as of such
date, (B) each Repurchased Mortgage Loan, 60% of the least of (a) 90% of
the Market Value of such Mortgage Loan as of such date, (b) the
outstanding principal balance of such Eligible Asset as of such date and
(c) the Repurchased Appraised Value of such Mortgage Loan and (C) each
Eligible Asset that is a HELOC, an Alt-A Second Mortgage Loan or a
Sub-Prime Second Mortgage Loan, the Purchase Percentage applicable to such
Eligible Asset multiplied by the lesser of (a) the Market Value of such
Mortgage Loan as of such date and (b) the outstanding principal balance of
such Eligible Asset as of such date; provided, that, the following
additional limitations on Asset Value shall apply:
(1) after giving effect to any requested Transaction, the aggregate
Asset Value of all Alt-A Mortgage Loans and Sub-Prime Mortgage Loans owned
hereunder by Buyer as of such date of determination may not exceed the
Non-Conforming Sub- Limit;
(2) after giving effect to any requested Transaction, the aggregate
Asset Value of all Sub-Prime Mortgage Loans owned hereunder by Buyer as of
such date of determination may not exceed the Sub-Prime Sub-Limit;
(3) after giving effect to any requested Transaction, the aggregate
Asset Value of all Sub-Prime Second Lien Mortgage Loans owned hereunder by
Buyer as of such date of determination may not exceed the Sub-Prime Second
Lien Sub-Limit;
(4) after giving effect to any requested Transaction, the aggregate
Asset Value of all Sub-Prime Mortgage Loans made to "C" or "D" credit
quality Mortgagors owned hereunder by Buyer as of such date of
determination may not exceed the Credit Sub-Limit;
(5) after giving effect to any requested Transaction, the aggregate
Asset Value of all Mortgage Loans which are Manufactured Housing Mortgage
Loans owned hereunder by Buyer as of such date of determination may not
exceed the Manufactured Housing Sub-Limit;
(6) after giving effect to any requested Transaction, the aggregate
Asset Value of all Mortgage Loans which are not occupied by the related
Mortgagor as its primary residence (as determined on the origination date)
owned hereunder by Buyer as of such date of determination may not exceed
the N/O/O Sub-Limit;
(7) after giving effect to any requested Transaction, the aggregate
Asset Value of all Repurchased Mortgage Loans owned hereunder by Buyer as
of such date of determination may not exceed the Repurchased Mortgage Loan
Sub-Limit;
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(8) after giving effect to any requested Transaction, the aggregate
Asset Value of all Co-op Loans owned hereunder by Buyer as of such date of
determination may not exceed the Co-op Sub-Limit;
(9) after giving effect to any requested Transaction, the aggregate
Asset Value of all Super Jumbo Mortgage Loans owned hereunder by Buyer as
of such date of determination may not exceed the Super Jumbo Sub-Limit;
(10) after giving effect to any requested Transaction, the aggregate
Asset Value of all Fannie Mae Flex 100 Mortgage Loans owned hereunder by
Buyer as of such date of determination may not exceed the Fannie Mae Flex
100 Sub-Limit;
(11) after giving effect to any requested Transaction, the aggregate
Asset Value of all Interest-Only Loans owned hereunder by Buyer as of such
date of determination may not exceed the Interest-Only Sub-Limit;
(12) after giving effect to any requested Transaction, the aggregate
Asset Value of all Wet-Ink Mortgage Loans owned hereunder by Buyer as of
such date is determination may not exceed the Wet-Ink Sub-Limit;
(13) after giving effect to any requested Transaction, the aggregate
Asset Value of all Co-op Loans that are Super Jumbo Mortgage Loans, Jumbo
Mortgage Loans owned hereunder by Buyer as of such date of determination
may not exceed the Co-op Jumbo Sub-Limit;
(14) with respect to each Check Funded Loan, the Asset Value shall
be deemed zero until at least one check set forth on the related Check
Funding Schedule has been presented for payment and paid in accordance
with the procedures set forth in the Custodial and Disbursement Agreement
and the Check Disbursement Agreement; provided that for purposes of
Section 3(n) and Section 4 hereof, the Asset Value shall be equal to no
more than amounts that have previously been paid in respect of checks with
respect to such Check Funded Loan;
(15) with respect to each Official Check Funded Loan, the Asset
Value shall be deemed zero until the official check set forth on the
related Official Check Funding Schedule has been presented for payment and
paid in accordance with the procedures set forth in the Custodial and
Disbursement Agreement and the Official Check Disbursement Agreement;
provided that for purposes of Section 3(n) and Section 4 hereof, the Asset
Value shall be equal to no more than amounts that have previously been
paid in respect of checks with respect to such Official Check Funded Loan;
(16) after giving effect to any requested Transaction, the aggregate
Asset Value of all HELOCs owned hereunder by Buyer as of such date of
determination may not exceed the HELOC Sub-Limit; and
(17) the Asset Value shall be deemed to be zero with respect to each
Mortgage Loan (i) in respect of which there is a breach of a
representation and warranty set forth in Schedule 1 (assuming each
representation and warranty is made as of the date the Asset
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Value is determined), (ii) other than with respect to a Repurchased Loan,
in respect of which there is a delinquency in the payment of principal
and/or interest which continues for a period in excess of twenty-nine (29)
calendar days (without regard to any applicable grace periods), (iii)
which has not been repurchased by Seller by the earlier to occur of (A)
the Termination Date and (B) except with respect to Repurchased Mortgage
Loans, the 90th day after the date on which it is first purchased by
Buyer, and with respect to Repurchased Mortgage Loans, the 180th day after
the date on which such Mortgage Loan becomes a Repurchased Mortgage Loan,
(iv) which has been released from the possession of Custodian under the
Custodial and Disbursement Agreement to any Person other than Buyer for a
period in excess of forty-five (45) calendar days with respect to releases
pursuant to Section 5(c), (v) which has been released from the possession
of Custodian under the Custodial and Disbursement Agreement to Seller for
a period in excess of ten (10) calendar days with respect to releases
pursuant to Sections 5(a) and 5(b), (vi) which exceed the Sub-Limit for
the related Class or otherwise or (vii) which is a Wet-Ink Mortgage Loan,
for which Custodian has failed to receive the related Mortgage Documents
by the tenth 10th Business Day following the applicable Purchase Date;
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the assignment of the
Mortgage to Buyer.
"Bank" shall mean Deutsche Bank National Trust Company, a national banking
association, and its successors in interest, or such other depository
institution as may be acceptable to Buyer in its sole discretion, and
their respective successors in interest.
"Bank Charter Event" shall mean the date on which AHMH acquires Valley
Bancorp, Inc. and its wholly owned subsidiary, Valley Bank of Maryland.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of 1978, as
amended from time to time.
"Business Day" shall mean any day other than (i) a Saturday or Sunday or
(ii) a day on which banks in the State of New York (or state in which any
of Custodian, Disbursement Agent, Seller or Buyer is located) is
authorized or obligated by law or executive order to be closed.
"Buyer" shall mean CDC Mortgage Capital Inc., a New York corporation, and
its successors in interest and assigns.
"Capital Lease Obligations" shall mean, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP, and, for purposes of
this Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with GAAP.
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"Cash" shall mean all cash and Cash Equivalents, as shown on the balance
sheet of the Seller prepared in accordance with GAAP.
"Cash Equivalents" shall mean (a) securities with maturities of 90 days or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of 90 days or less
from the date of acquisition and overnight bank deposits of any commercial
bank having capital and surplus in excess of $500,000,000, (c) repurchase
obligations of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than seven days with
respect to securities issued or fully guaranteed or insured by the United
States Government, (d) commercial paper of a domestic issuer rated at
least A-1 or the equivalent thereof by Standard and Poor's Ratings Group
("S&P") or P-1 or the equivalent thereof by Moody's Investors Service,
Inc. ("Moody's") and in either case maturing within 90 days after the day
of acquisition, (e) securities with maturities of 90 days or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth
or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case
may be) are rated at least A by S&P or A by Moody's, (f) securities with
maturities of 90 days or less from the date of acquisition backed by
standby letters of credit issued by any commercial bank satisfying the
requirements of clause (b) of this definition or (g) shares of money
market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
"Check Disbursement Account" shall have the meaning specified in the Check
Disbursement Agreement.
"Check Disbursement Agreement" shall mean the amended and restated Letter
Agreement, dated as of the date hereof, among each Seller Entity, Buyer,
Disbursement Agent, Deutsche Bank Trust Company Delaware and Deutsche Bank
Trust Company Americas as may be amended from time to time.
"Check Funded Loan" shall mean an Eligible Asset funded pursuant to the
Check Disbursement Agreement.
"Check Funding Schedule" shall have the meaning specified in the Check
Disbursement Agreement.
"Class" shall mean each group of Mortgage Loans where each Mortgage Loan
within such group qualifies as at least one of the following: "Conforming
Mortgage Loan", "Jumbo Mortgage Loan", "Alt-A First Mortgage Loan", "Alt-A
Second Mortgage Loan", "Sub-Prime First Mortgage Loan", "Sub-Prime Second
Mortgage Loan", "Wet-Ink Mortgage Loan", "HELOC" or "Repurchased Mortgage
Loan"; provided, that a Mortgage Loan may be within more than one Class as
of any date of determination.
"Closed End Loan" shall mean a Mortgage Loan which is not a HELOC.
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"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collection Account" shall mean the account established by the Bank
subject to an Account Agreement, into which all Income shall be deposited.
"Combined Loan-to-Value Ratio or CLTV" shall mean with respect to any
Second Lien Mortgage Loan, the sum of (a) the original principal balance
of such Second Lien Mortgage Loan or, with respect to any HELOC, the
original Credit Limit, and (b) the outstanding principal balance of any
related first lien loan as of the date of origination of such Second Lien
Mortgage Loan, divided by the lesser of (i) the Appraised Value of the
related Mortgage Property as of the date of origination of such Second
Lien Mortgage Loan and (ii) if the related Mortgaged Property was
purchased within twelve (12) months of the origination of such Second Lien
Mortgage Loan, the purchase price of such Mortgaged Property.
"Committed Transaction" as defined in the recitals hereto.
"Commitment Fee" shall mean the fee payable by Seller to Buyer pursuant to
Section 3(a)(7) equal to 0.075% of the Maximum Committed Amount.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with Seller within the meaning
of Section 4001 of ERISA or is part of a group which includes Seller and
which is treated as a single employer under Section 414 of the Code.
"Confirmation" shall have the meaning specified in Section 3(c).
"Conforming Mortgage Loan" shall mean an Eligible Asset which is insured
by, and meets all criteria of, Fannie Mae, Freddie Mac, the FHA or the VA
which is secured by a first lien on the related Mortgaged Property.
"Co-op" shall mean a private, cooperative housing corporation, having only
one class of stock outstanding, which owns or leases land and all or part
of a building or buildings, including apartments, spaces used for
commercial purposes and common areas therein and whose board of directors
authorizes the sale of stock and the issuance of a Co-op Lease.
"Co-op Lease" shall mean with respect to a Co-op Loan, the lease with
respect to a dwelling unit occupied by the Mortgagor and relating to the
stock allocated to the related dwelling unit.
"Co-op Loan" shall mean an Eligible Asset that is a Conforming Mortgage
Loan, except with respect to the outstanding principal balance at
origination, secured by the pledge of stock allocated to a dwelling unit
in a Co-op and a collateral assignment of the related Co-op Lease.
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"Co-op Security Agreement" shall mean the agreement creating a first lien
security interest in the stock allocated to a dwelling unit in the
residential cooperative housing corporation that was pledged to secure
such Co-op Loan and the related Co-op Lease.
"Co-op Sub-Limit" shall mean $16,000,000.
"Co-op Jumbo Sub-Limit" shall mean $8,000,000.
"Credit Limit" shall mean, with respect to each HELOC, the maximum amount
permitted under the terms of the related Credit Line Agreement.
"Credit Line Agreement" shall mean, with respect to each HELOC, the
related home equity line of credit agreement, account agreement and
promissory note (if any) executed by the related mortgagor and any
amendment or modification thereof.
"Credit Sub-Limit" shall mean $3,000,000.
"Custodial and Disbursement Agreement" shall mean that amended and
restated custodial and disbursement agreement, dated as of the date
hereof, by and among Buyer, Seller, Disbursement Agent and Custodian, as
the same shall be modified and supplemented and in effect from time to
time.
"Custodial Identification Certificate" shall have the meaning assigned
thereto in the Custodial and Disbursement Agreement.
"Custodian" shall mean Deutsche Bank National Trust Company, a national
banking association, and its successors in interest, as custodian under
the Custodial and Disbursement Agreement, and any successor Custodian
under the Custodial and Disbursement Agreement.
"DDA Account" shall have the meaning specified in the Check Disbursement
Agreement.
"Default" shall mean an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"Disbursement Agent" shall mean Deutsche Bank National Trust Company, a
national banking association, and its successors in interest, as
disbursement agent under the Custodial and Disbursement Agreement, and any
successor Disbursement Agent under the Custodial and Disbursement
Agreement.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Draw" shall mean, with respect to each HELOC, an additional borrowing by
the Mortgagor subsequent to the Cut-off Date in accordance with the
related Credit Line Agreement, which borrowing shall be funded by the
Seller.
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"Due Diligence Review" shall mean the performance by Buyer of any or all
of the reviews permitted under Section 26 with respect to any or all of
the Mortgage Loans, as desired by Buyer from time to time.
"Effective Date" shall mean the date upon which the conditions precedent
set forth in Section 3(a) shall have been satisfied.
"Electronic Agent" shall mean MERSCORP, INC., and its successors in
interest.
"Electronic Tracking Agreement" shall mean the Electronic Tracking
Agreement, in a form substantially similar to the form set forth in Annex
19 to the Custodial and Disbursement Agreement, to be entered into among
Buyer, each Seller Entity, Electronic Agent and MERS, if any, as the same
shall be amended, supplemented or otherwise modified from time to time;
provided that if no Mortgage Loans are or will be MERS Designated Mortgage
Loans, all references herein to the Electronic Tracking Agreement shall be
disregarded.
"Electronic Transmission" shall mean the delivery of information in an
electronic format acceptable to the applicable recipient thereof. An
Electronic Transmission shall be considered written notice for all
purposes hereof (except when a request or notice by its terms requires
execution). Any document that requires signature that is delivered by
Electronic Transmission via email that includes the sender's name shall
satisfy such signature requirement.
"Eligible Asset" shall mean a Mortgage Loan, including a Wet-Ink Mortgage
Loan, (i) as to which the representations and warranties in Schedule 1
attached hereto are true and correct, (ii) which is underwritten strictly
in accordance with Seller's Underwriting Guidelines, a copy of which is
attached hereto as Exhibit II or with such exceptions as Buyer shall
approve pursuant to Section 3(b)(9) or meets all underwriting criteria of,
Fannie Mae, Freddie Mac, the FHA or the VA, and (iii) which is secured by
a Residential Dwelling.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that is
a member of any group of organizations (i) described in Section 414(b) or
(c) of the Code of which Seller is a member and (ii) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA
and Section 412(n) of the Code, described in Section 414(m) or (o) of the
Code of which Seller is a member.
"Escrow Instruction Letter" shall have the meaning assigned thereto in the
Custodial and Disbursement Agreement.
"Eurodollar Rate" shall mean, with respect to each day a Transaction is
outstanding (and reset on each day a Transaction is outstanding), the rate
per annum equal to the rate appearing at page 5 of the Telerate Screen as
one-month LIBOR at or about 9:00 a.m.,
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New York City time, on such date (and if such date is not a Business Day,
the Eurodollar Rate in effect on the Business Day immediately preceding
such date), and if such rate shall not be so quoted, the average rate per
annum at which three mutually acceptable banks are offered Dollar deposits
at or about 8:00 a.m., New York City time, on such date by prime banks in
the interbank eurodollar market where the eurodollar and foreign currency
exchange operations in respect of its Transactions are then being
conducted for delivery on such day for a period of thirty (30) days and in
an amount comparable to the amount of the Transactions to be outstanding
on such day. The Eurodollar Rate shall be reset by Buyer as described
above and Buyer's determination of Eurodollar Rate shall be conclusive
upon the parties absent manifest error on the part of Buyer.
"Event of Default" has the meaning specified in Section 12.
"Excess Margin" has the meaning specified in Section 3(q).
"Existing Financing Facilities" shall mean the Morgan Facility, the UBS
Warburg Facility, the RFC Facility, the Freddie Facility and the Greenwich
Capital Facility, as may be amended and/or restated from time to time, and
all other documents or agreements executed in connection therewith, or
replacement facilities with financial covenants that are no less favorable
to Buyer and with financial institutions approved by the Buyer.
"Fannie Mae" shall mean the Federal National Mortgage Association, and its
successors in interest.
"Fannie Mae Flex 100 Mortgage Loan" shall mean an Eligible Asset which
meets all criteria of the Fannie Mae Flex 100 program.
"Fannie Mae Flex 100 Sub-Limit" shall mean $2,000,000.
"Foreclosed Loan" shall mean a loan the property securing which has been
foreclosed upon by Seller.
"Freddie Facility" means the financing facility between the Seller and
Freddie Mac, as may be amended from time to time, and all other documents
or agreements executed in connection therewith, or replacement facilities
with substantially similar terms (including, but not limited to, amounts
and rates) with financial institutions approved by Buyer.
"Freddie Mac" shall mean the Federal Home Loan Mortgage Corporation, and
its successors in interest.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial,
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regulatory or administrative functions of or pertaining to government and
any court or arbitrator having jurisdiction over Seller, any of its
Subsidiaries or any of their properties.
"Greenwich Capital Facility" means the Whole Loan Purchase and Sale
Agreement, dated as of January 1, 2004, by and between AHMC, CNI and
Greenwich Capital Financial Products, Inc.
"Guarantee" shall mean, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person
or in any manner providing for the payment of any Indebtedness of any
other Person or otherwise protecting the holder of such Indebtedness
against loss (whether by virtue of partnership arrangements, by agreement
to keep-well another Person, to purchase assets, goods, securities or
services, or to agree to take-or-pay arrangement or otherwise); provided
that the term "Guarantee" shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii)
obligations to make servicing advances for delinquent taxes and insurance,
or other obligations in respect of a Mortgaged Property, or other
principal and interest advances made in the ordinary course of servicing
the Mortgage Loans. The amount of any Guarantee of a Person shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by such Person in good faith. The terms
"Guarantee" and "Guaranteed" used as verbs shall have correlative
meanings.
"HELOC" shall mean a home equity revolving line of credit secured by a
Mortgage, deed of trust or other instrument creating a second lien on the
related Mortgaged Property, which lien secures the related Credit Line
Agreement and which related first lien is also an Eligible Asset subject
to an outstanding Transaction under this Agreement at any time that such
HELOC is requested to be, or is, subject to an outstanding Transaction
under this Agreement.
"HELOC Sub-Limit" shall mean $30,000,000.
"Income" shall mean, with respect to any Mortgage Loan at any time, all
collections and proceeds on or in respect of the Mortgage Loans,
including, without limitation, any principal thereof then payable and all
interest or other distributions payable thereon less any related servicing
fee(s) charged by Servicer.
"Indebtedness" shall mean, for any Person: (a) obligations created, issued
or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise,
to repurchase such Property from such Person); (b) obligations of such
Person to pay the deferred purchase or acquisition price of Property or
services, other than trade accounts payable (other than for borrowed
money) arising, and accrued expenses incurred, in the ordinary course of
business so long as such trade accounts payable are payable within 90 days
of the date the respective goods are delivered or the respective services
are rendered; (c) Indebtedness of others secured by a Lien on the Property
of such Person, whether or not the respective Indebtedness so
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secured has been assumed by such Person; (d) obligations (contingent or
otherwise) of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) obligations of such Person under
repurchase agreements, sale/buy-back agreements or like arrangements; (f)
Indebtedness of others Guaranteed by such Person; (g) all obligations of
such Person incurred in connection with the acquisition or carrying of
fixed assets by such Person; (h) Indebtedness of general partnerships of
which such Person is secondarily or contingently liable (other than by
endorsement of instruments in the course of collection), whether by reason
of any agreement to acquire such indebtedness to supply or advance sums or
otherwise; and (i) Capital Lease Obligations of such Person.
"Interest-Only Loan" shall mean any Mortgage Loan as to which scheduled
payments only include interest for an initial period of not more than 10
years, after which such Mortgage Loan will fully amortize to maturity.
"Interest-Only Sub-Limit" shall mean $90,000,000.
"Interest Rate Protection Agreement" shall mean, with respect to any or
all of the Mortgage Loans, any short sale of US Treasury securities, or
futures contract, or options related contract, or interest rate swap, cap
or collar agreement or similar arrangement providing for protection
against fluctuations in interest rates or the exchange of nominal interest
obligations, either generally or under specific contingencies and
acceptable to Buyer.
"Interim Funder" shall mean, with respect to each MERS Designated Mortgage
Loan, the Person named on the MERS(R) System as the interim funder
pursuant to the MERS Procedures Manual.
"Investor" shall mean, with respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the investor pursuant to the
MERS Procedures Manual.
"Jumbo Mortgage Loans" shall mean an Eligible Asset which meets all
criteria of Fannie Mae or Freddie Mac except that the outstanding
principal balance thereof at origination was in excess of Fannie Mae or
Freddie Mac's guidelines which is secured by a first lien on the related
Mortgaged Property.
"Late Payment Fee" has the meaning specified in Section 5(b).
"Lien" shall mean any mortgage, lien, pledge, charge, security interest or
similar encumbrance.
"Loan-to-Value Ratio" or "LTV" means with respect to any Mortgage Loan,
the ratio of the original outstanding principal amount (or with respect to
a HELOC, the Credit Limit) of such Mortgage Loan at the time of
origination to the lesser of (a) the Appraised Value of the related
Mortgaged Property at origination of such Mortgage Loan and (b) if the
related Mortgaged Property was purchased within twelve (12) months of the
origination of such Mortgage Loan, the purchase price of the related
Mortgaged Property.
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"Manufactured Housing Sub-Limit" shall mean $2,000,000.
"Margin Base" shall mean the aggregate Asset Value of all Purchased Assets
which are Eligible Assets.
"Margin Deficit" has the meaning specified in Section 4.
"Market Value" shall mean, as of any date in respect of any Mortgage Loan,
the price at which such Mortgage Loan could readily be sold as determined
by Buyer, which price may be determined to be zero. Buyer's determination
of Market Value shall be conclusive upon the parties absent manifest error
on the part of Buyer.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
Property, business, operations, financial condition or prospects of any
Seller Entity, (b) the ability of any Seller Entity to perform its
respective obligations under any of the Repurchase Documents to which it
is a party, (c) the validity or enforceability of any of the Repurchase
Documents, (d) the rights and remedies of Buyer under any of the
Repurchase Documents, (e) the timely payment of any amounts payable under
the Repurchase Documents, or (f) the Asset Value of the Purchased Assets.
"Maximum Amount" shall mean $450,000,000.
"Maximum Committed Amount" shall mean $200,000,000.
"Maximum Uncommitted Amount" shall mean $250,000,000.
"MERS" shall mean Mortgage Electronic Registration Systems, Inc., and
its successors in interest.
"MERS Designated Mortgage Loan" shall mean a Mortgage Loan for which the
Seller has designated or will designate MERS as, and has taken or will
take such action as is necessary to cause MERS to be, the mortgagee of
record, as nominee for the Seller, in accordance with the MERS Procedure
Manual.
"MERS Procedure Manual" shall mean the MERS Procedures Manual attached as
Exhibit B to the Electronic Tracking Agreement, as it may be amended,
supplemented or otherwise modified from time to time.
"MERS Report" shall mean the schedule listing MERS Designated Mortgage
Loans and other information prepared by the Electronic Agent pursuant to
the Electronic Tracking Agreement.
"MERS(R) System" shall mean the Electronic Agent's mortgage electronic
registry system, as more particularly described in the MERS Procedures
Manual.
"Morgan Facility" means the Amended and Restated Master Loan and Security
Agreement, dated as of November 26, 2003, by and among AHMC, AHMIC, AHMA,
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AHMH, CNI, the Lenders from time parties thereto and Morgan Stanley
Mortgage Capital Inc. r.
"Mortgage" shall mean with respect to a Mortgage Loan that is not a Co-op
Loan, the mortgage, deed of trust or other instrument securing a Mortgage
Note, which creates a first lien or second lien on a fee simple
Residential Dwelling securing the Mortgage Note and with respect to a
Co-op Loan, the Co-op Security Agreement.
"Mortgage File" shall have the meaning assigned thereto in the Custodial
and Disbursement Agreement.
"Mortgage Loan" shall mean a mortgage loan or HELOC originated in
accordance with the Underwriting Guidelines which Custodian has been
instructed to hold for Buyer pursuant to the Custodial and Disbursement
Agreement, including any Wet-Ink Mortgage Loan listed on a Transaction
Request, and which Mortgage Loan includes, without limitation, (i) a
Mortgage Note and related Mortgage or Credit Line Agreement, and (ii) all
right, title and interest of Seller in and to the Mortgaged Property
covered by such Mortgage.
"Mortgage Note" shall mean the original executed promissory note or other
evidence of the indebtedness of a Mortgagor with respect to a Mortgage
Loan.
"Mortgaged Property" shall mean, with respect to a Mortgage Loan that is
not a Co-op Loan, a fee simple interest in the real property (including
all improvements, buildings, fixtures, building equipment and personal
property thereon and all additions, alterations and replacements made at
any time with respect to the foregoing) and all other collateral securing
repayment of the debt evidenced by a Mortgage Note. With respect to a
Co-op Loan, the stock allocated to a dwelling unit in the residential
cooperative housing corporation that was pledged to secure such Co-op Loan
and the related Co-op Lease.
"Mortgagee" shall mean the record holder of a Mortgage Note secured by a
Mortgage.
"Mortgagor" shall mean the obligor or obligors on a Mortgage Note,
including any person who has assumed or guaranteed the obligations of the
obligor thereunder.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been or are required to
be made by Seller or any ERISA Affiliate and that is covered by Title IV
of ERISA.
"N/O/O Sub-Limit" shall mean $3,000,000.
"Net Income" shall mean, with respect to any Person for any period, the
net income of such Person for such period as determined in accordance with
GAAP.
"Non-Conforming Sub-Limit" shall mean $60,000,000.
"Official Check Disbursement Account" shall have the meaning specified in
the Official Check Disbursement Agreement.
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"Official Check Disbursement Agreement" shall mean the amended and
restated Letter Agreement, dated as of the date hereof, among each Seller
Entity, Buyer, Disbursement Agent, Deutsche Bank Trust Company Delaware
and Deutsche Bank Trust Company Americas as may be amended from time to
time relating to "official" or "certified" checks.
"Official Check Funded Loan" shall mean an Eligible Asset funded pursuant
to the Official Check Disbursement Agreement.
"Official Check Funding Schedule" shall have the meaning specified in the
Official Check Disbursement Agreement.
"Payment Calculation Date" shall mean the tenth (10th) day of each month.
"Payment Date" shall mean two (2) Business Days after the Payment
Calculation Date.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Periodic Advance Repurchase Payment" has the meaning specified in Section
5(b).
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality
or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by any Seller or any ERISA Affiliate and covered by Title IV of
ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any day a Transaction is
outstanding or any other amount under this Agreement or any other
Repurchase Document that is not paid when due to Buyer at the stated
Repurchase Date or otherwise when due (a "Post-Default Day"), a rate per
annum on a 360 day per year basis during the period from and including the
due date to but excluding the date on which such amount is paid in full
equal to 4% per annum plus the Prime Rate on such Post-Default Day.
"Price Differential" means, with respect to any Transaction hereunder as
of any date, the aggregate amount obtained by daily application of the
Pricing Rate for such Transaction to the Purchase Price for such
Transaction on a 360 day per year basis for the actual number of days
during the period commencing on (and including) the Purchase Date for such
Transaction and ending on (but excluding) the Repurchase Date (reduced by
any amount of such Price Differential previously paid by Seller to Buyer
with respect to such Transaction).
"Pricing Rate" shall mean with respect to any Class of Mortgage Loans and
any date of determination a rate per annum equal to the sum of (a) the
Eurodollar Rate applicable on such date plus (b) the Pricing Spread for
such Class applicable on such date.
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"Pricing Spread" shall mean (a) with respect to each Committed Transaction
with respect to any Class of Mortgage Loan, the rate per annum
corresponding to such Class as set forth in the table below:
Class Pricing Spread
----------------------------------- --------------
Conforming Mortgage Loan 0.75%
Jumbo Mortgage Loan 0.75%
Super Jumbo Mortgage Loan 0.75%
Alt-A First Lien Mortgage Loan 0.85%
Alt-A Second Lien Mortgage Loan 0.85%
HELOC 0.90%
Sub-Prime First Lien Mortgage Loan 0.95%
Sub-Prime Second Lien Mortgage Loan 0.95%
Wet-Ink Mortgage Loans 1.00%
Repurchased Loans 1.75%
and (b) with respect to each Uncommitted Transaction, a percentage to be
determined by Buyer in its sole discretion; provided, that should a
Mortgage Loan qualify for more than one Class as of any date of
determination, then the Pricing Spread, subject to clause (b), shall be
the Pricing Spread of the Class for which such Mortgage Loan qualifies
that produces the greatest Pricing Rate.
"Prime Rate" shall mean the prime rate announced to be in effect from time
to time, as published as the average rate in The Wall Street Journal.
"Property" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Agreement" shall mean any purchase agreement by and between
Seller and any third party, including without limitation, any Affiliate of
Seller, pursuant to which Seller has purchased assets subsequently sold to
Buyer hereunder.
"Purchase Date" shall mean the date on which Purchased Assets are
transferred by Seller to Buyer or its designee (including Custodian).
"Purchase Percentage" shall mean, with respect to each Committed
Transaction with respect to any Class of Mortgage Loan, the applicable
percentage corresponding to such Class as set forth in the table below:
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Purchase
Class Percentage
------------------------------- ------------
Conforming Mortgage Loan 98%
Jumbo Mortgage Loan 98%
Super Jumbo Mortgage Loan 98%
Alt-A First Lien Mortgage Loan 98%
Alt-A Second Lien Mortgage Loan 95%
Sub-Prime First Lien Mortgage 98%
Loan
Sub-Prime Second Lien Mortgage 95%
Loan
HELOC 95%
provided that with respect to each Uncommitted Transaction, such
percentage as is acceptable to Buyer in its sole discretion and set forth
in the related Confirmation; provided further that should a Mortgage Loan
qualify for more than one Class, then the Purchase Percentage, subject to
the preceding proviso, shall be the Purchase Percentage of the Class for
which such Mortgage Loan qualifies which produces the lowest percentage.
"Purchase Price" shall mean on each Purchase Date, the price at which
Purchased Assets are transferred by Seller to Buyer or its designee
(including Custodian) which shall equal the Asset Value for such Purchased
Assets on the Purchase Date.
"Purchased Assets" shall mean the Mortgage Loans sold by Seller to Buyer
in a Transaction.
"Purchased Items" has the meaning specified in Section 7.
"Qualified Originator" means an originator of Mortgage Loans acceptable to
Buyer in its sole discretion.
"Regulations T, U and X" shall mean Regulations T, U and X of the Board of
Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.
"REIT" shall mean a real estate investment trust, as defined in Section
856(a) of the Code.
"REIT Distribution Requirement" shall mean distributions reasonably
necessary for AHMIC to maintain its REIT Status and not be subject to
corporate level tax based on income or to excise tax under Section 4981 of
the Code.
"REIT Status" shall mean, with respect to any Person, such Person's status
as a real estate investment trust, as defined in Section 856(a) of the
Code, that satisfies the conditions and limitations set forth in Section
856(b) and 856(c) of the Code.
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"REO Property" shall mean real property acquired by Seller, including a
Mortgaged Property acquired through foreclosure of a Mortgage Loan or by
deed in lieu of such foreclosure.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or a successor provision thereof, other than those events
as to which the thirty day notice period is waived under subsections .13,
.14, .16, .18, .19 or .20 of PBGC Reg. ss. 2615 or one or more successor
provision thereof.
"Repurchase Date" shall mean the date on which Seller is to repurchase the
Purchased Assets from Buyer as specified in the related Confirmation
including any date determined by application of the provisions of Sections
3 or 13 which date shall be specified as "open" unless otherwise requested
by Seller and agreed by Buyer; provided that in no event shall the
Repurchase Date be in excess of 364 days after the Purchase Date. If the
Transaction is "open", the Repurchase Date shall be one (1) Business Day
after the date upon which either Buyer (in its sole discretion) or the
Seller (in its sole discretion) provides to the other written notice of
its intention to sell or repurchase, as applicable, the applicable
Mortgage Loans; provided that the Repurchase Date (with respect to any
Committed Transaction) for a repurchase arising due to the failure of the
Seller to satisfy the condition set forth in Section 3(b)(20) shall be no
later than 30 days after the date upon which the Buyer provides notice of
its intention to terminate this facility; and provided further that the
Repurchase Date shall not, in any event, exceed 364 days from the date
hereof.
"Repurchase Documents" shall mean this Agreement, the Custodial and
Disbursement Agreement, the Account Agreement, the Check Disbursement
Agreement and the Official Check Disbursement Agreement and all other
documents or agreements executed connection therewith.
"Repurchase Obligations" shall have the meaning specified in Section 7(b).
"Repurchase Price" means the price at which Purchased Assets are to be
transferred from Buyer or its designee (including Custodian) to Seller
upon termination of a Transaction, which will be determined in each case
(including Transactions terminable upon demand) as the sum of the Purchase
Price and the Price Differential as of the date of such determination
decreased by all cash, Income and Periodic Advance Repurchase Payments
(including Late Payment Fees, if any) actually received by Buyer pursuant
to Sections 5(a) or 5(b), respectively.
"Repurchased Appraised Value" shall mean the value set forth in an
appraisal made no earlier than 30 days prior to the Purchase Date of a
Repurchased Mortgage Loan by an appraiser satisfactory to Buyer in its
sole discretion, as the value of the Mortgaged Property.
"Repurchased Mortgage Loan" shall mean an Eligible Asset with a current
outstanding principal balance not in excess of $750,000 which is a
Conforming Mortgage Loan, a Jumbo Mortgage Loan, an Alt-A First Lien
Mortgage Loan or a Sub-Prime First Mortgage Loan but in each case is not a
Wet-Ink Mortgage Loan or a Second Lien
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Mortgage Loan, which has previously been sold to a warehouse lender under
a gestation or similar facility and is required to be repurchased
thereunder by the Seller for which Seller has obtained an appraisal by an
appraiser satisfactory to Buyer in its sole discretion not earlier than 30
days prior to the requested Purchase Date for such Mortgage Loan. In no
event shall Buyer be required to purchase a "Repurchased Mortgage Loan"
(a) unless Seller has delivered to Buyer an appraisal meeting the criteria
in the preceding sentence, (b) if such Mortgage Loan is the subject of a
contested foreclosure, (c) if such Mortgage Loan has an obligor that has
filed for bankruptcy relief, or (d) if such Mortgage Loan is the subject
of any fraud or suspected fraud on the part of the obligor thereunder.
"Repurchased Mortgage Loan Sub-Limit" shall mean $4,000,000; provided
however, that if the aggregate Purchase Price of all Transactions
outstanding hereunder on such date of determination is less than
$75,000,000 after giving effect to any requested Transactions, then the
Repurchased Mortgage Loan Sub-Limit shall mean 2% of the aggregate
Purchase Price of all Transactions outstanding hereunder on such date of
determination.
"Request for Additional Transactions for Excess Margin" shall have the
meaning specified in Section 3(q)(1).
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Residential Dwelling" shall mean any one of the following: (i) a detached
single family dwelling, (ii) a two-to-four family dwelling, (iii) a
co-operative unit, (iv) a unit in a condominium project, or (v) a detached
single family dwelling in a planned unit development. Mortgaged Properties
that consist of the following property types are not Residential
Dwellings: (a) log homes, (b) earthen homes, (c) underground homes, (d)
mobile homes, (e) any dwelling situated on more than ten acres of property
and (f) any dwelling situated on a leasehold estate.
"Responsible Officer" shall mean, as to any Person, the chief executive
officer, the chief financial officer, the treasurer or the chief operating
officer of such Person.
"RFC Facility" means the First Amended and Restated Warehousing Credit,
Term Loan and Security Agreement, dated as of May 30, 2003, among AHMC,
CNI, the Lenders party thereto, Residential Funding Corporation, U.S. Bank
National Association and Manufacturers and Traders Trust Company.
"Second Lien Mortgage Loan" shall mean an Eligible Asset secured by a lien
on the Mortgaged Property, which is subject to one prior lien on such
Mortgaged Property.
"Security Agreement" shall mean with respect to any Mortgage Loan, any
contract, instrument or other document related to security for repayment
thereof (other than the related Mortgage and Mortgage Note), executed by
the Mortgagor and/or others in
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connection with such Mortgage Loan, including without limitation, any
security agreement, guaranty, title insurance policy, hazard insurance
policy, chattel mortgage, letter of credit or certificate of deposit or
other pledged accounts, and any other documents and records relating to
any of the foregoing.
"Seller" shall mean, collectively, AHMC, AHMIC, AHMA, AHMH and CNI, and
their respective successors in interest.
"Seller Asset Schedule" shall have the meaning assigned thereto in the
Custodial and Disbursement Agreement.
"Seller-Related Obligations" shall mean any obligations, representations,
warranties and covenants of Seller hereunder and under any other
arrangement between Seller or an Affiliate of Seller on the one hand and
Buyer or an Affiliate of Buyer on the other hand.
"Servicer" shall have the meaning specified in Section 24.
"Servicer Account" shall mean any account established by Servicer in
connection with the servicing of the Mortgage Loans.
"Servicer Notice" shall mean the notice from each Seller Entity to
Servicer, substantially in the form of Exhibit VII attached hereto.
"Servicing Agreement" has the meaning specified in Section 24.
"Servicing File" means with respect to each Mortgage Loan, the file
retained by Seller consisting of originals of all documents in the
Mortgage File which are not delivered to a Custodian and copies of all
documents in the Mortgage File set forth in Section 2 of the Custodial and
Disbursement Agreement.
"Servicing Records" has the meaning specified in Section 24.
"Settlement Agent" shall mean, with respect to any Transaction, the entity
approved by Buyer, in its sole discretion, which may be a title company,
escrow company or attorney in accordance with local law and practice in
the jurisdiction where the related Wet-Ink Mortgage Loan is being
originated, to which the proceeds of such Transaction are to be wired
pursuant to Section 3.
"Sub-Limit" shall mean each of the Non-Conforming Sub-Limit, the Sub-Prime
Sub-Limit, the Sub-Prime Second Lien Sub-Limit, the Credit Sub-Limit, the
Manufactured Housing Sub-Limit, the N/O/O Sub-Limit, the Co-op Sub-Limit,
the Fannie Mae Flex 100 Sub-Limit, the Super Jumbo Sub-Limit, the HELOC
Sub-Limit and the Repurchased Mortgage Loan Sub-Limit. For purpose of
determining a violation of a Sub-Limit hereunder, (1) at no time shall the
aggregate of the Asset Value of all Mortgage Loans subject to outstanding
transactions hereunder violate any single Sub-Limit and (2) to the extent
that there are both Committed Transactions and Uncommitted Transactions
outstanding hereunder, at no time shall the aggregate Asset Value of
Mortgage Loans subject to (a) a Committed Transaction be in excess of the
applicable
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Sub-Limit Percentage or (b) an Uncommitted Transaction be in excess of the
applicable Sub-Limit Percentage.
"Sub-Limit Percentage" shall mean the aggregate Asset Value multiplied by
a percentage equal to the percentage of all outstanding Transactions which
are Committed Transactions or Uncommitted Transactions, as applicable.
"Sub-Prime First Mortgage Loan" shall mean an Eligible Asset which is a
Sub-Prime Mortgage Loan and a First Lien Mortgage Loan.
"Sub-Prime Mortgage Loan" shall mean an Eligible Asset which is a Mortgage
Loan made to a Mortgagor of less than "A-" credit quality secured by a
lien on a single-family Residential Dwelling.
"Sub-Prime Second Lien Sub-Limit" shall mean $5,000,000.
"Sub-Prime Second Mortgage Loan" shall mean an Eligible Asset which is a
Sub-Prime Mortgage Loan and a Second Lien Mortgage Loan.
"Sub-Prime Sub-Limit" shall mean $30,000,000.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership, limited liability company or other entity of which at least a
majority of the securities or other ownership interests having by the
terms thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such
corporation, partnership, limited liability company or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership
or other entity shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned
or controlled by such Person or one or more Subsidiaries of such Person or
by such Person and one or more Subsidiaries of such Person.
"Super Jumbo Mortgage Loan" shall mean an Eligible Asset which is a Jumbo
Mortgage Loan with an outstanding principal balance at origination of
greater than or equal to $1,000,000 but less than or equal to $5,000,000.
"Super Jumbo Sub-Limit" shall mean $30,000,000.
"Tangible Net Worth" shall mean as to any Person, as of a particular date,
(a) all amounts which would be included under capital on a balance
sheet of such Person at such date, determined in accordance with GAAP,
less
(b) (i) amounts owing to such Person from Affiliates, or from
officers, employees, partners, members, directors, shareholders or other
Persons similarly affiliated with such Person or its respective
Affiliates, (ii) intangible assets, and (iii) the value of REO Property
and Foreclosed Loans.
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"Termination Date" shall mean the date which is 364 days from the date
hereof, which date shall be June 1, 2005 or such earlier date on which
this Agreement shall terminate in accordance with the provisions hereof or
by operation of law, as may be extended pursuant to Section 3(o).
"Termination Fee" shall mean a fee payable by Seller to Buyer in
accordance with Section 20 hereof equal to 0.10% per annum on the Maximum
Committed Amount for the period commencing on the date of such termination
through and including June 1, 2005.
"Test Period" shall have the meaning specified in Section 11(m).
"Total Indebtedness" shall mean with respect to any Person, for any
period, the aggregate Indebtedness of such Person during such period less
the amount of any nonspecific balance sheet reserves maintained in
accordance with GAAP.
"Transaction" has the meaning specified in Section 1.
"Transaction Request" means a request from Seller to Buyer, in the form
attached as Exhibit I hereto, to enter into a Transaction, which may be
delivered via Electronic Transmission.
"True Sale Certification" shall mean a true sale certification in the form
of Exhibit VI attached hereto.
"Trust Receipt" shall mean a trust receipt issued by Custodian to Buyer
confirming Custodian's possession of certain Mortgage Files which are held
by Custodian for the benefit of Buyer or the registered holder of such
trust receipt.
"UBS Warburg Facility" means the Amended and Restated Mortgage Loan
Purchase Agreement, dated as of February 6, 2004, by and among UBS Real
Estate Securities Inc., AHMIC, AHMA, AHMH, AHMC and CNI; the Amended and
Restated Mortgage Loan Repurchase Agreement, dated as of February 6, 2004,
by and among UBS Real Estate Securities Inc., AHMIC, AHMA, AHMH, AHMC and
CNI; the Amended and Restated Mortgage Loan Custodial Agreement, dated as
of February 6, 2004, by and among UBS Real Estate Securities Inc.,
Deutsche Bank National Trust Company, AHMIC, AHMA, AHMH, AHMC and CNI; the
Amended and Restated Mortgage Loan Participation Agreement, dated as of
February 6, 2004, by and among UBS Real Estate Securities Inc., AHMIC,
AHMA, AHMH, AHMC and CNI; and the Amended and Restated Custodial
Agreement, dated as of February 6, 2004, by and among UBS Real Estate
Securities Inc., Deutsche Bank National Trust Company, AHMIC, AHMA, AHMH,
AHMC and CNI, each as may be amended from time to time.
"Uncommitted Transaction" as defined in the recitals hereto.
"Underlying Mortgaged Property" shall mean with respect to each Co-op
Loan, the underlying real property owned by the related residential
cooperative housing corporation.
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"Underwriting Guidelines" shall mean (i) with respect to each Mortgage
Loan other than a Conforming Mortgage Loan or a Jumbo Mortgage Loan, the
underwriting guidelines delivered by Seller to Buyer on or prior to the
Effective Date and as may be modified or supplemented from time to time
thereafter as approved by Buyer in its sole discretion attached hereto as
Exhibit II and (ii) with respect to each Conforming Mortgage Loan and
Jumbo Mortgage Loan, the guidelines set forth in the applicable guide
published by Fannie Mae, Freddie Mac, the FHA or the VA setting forth the
requirements each Mortgage Loan needs to satisfy in order to be eligible
for purchase or insurance by Fannie Mae, Freddie Mac, the FHA or the VA,
as applicable, or any other set of criteria established by Fannie Mae,
Freddie Mac, the FHA or the VA, as applicable, that a Mortgage Loan must
satisfy in order to be eligible for purchase or insurance by Fannie Mae,
Freddie Mac, the FHA or the VA, as applicable, in each case, except with
respect to the outstanding principal balance of a Jumbo Mortgage Loan.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial Code
as in effect on the date hereof in the State of New York; provided that if
by reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interest in any Purchased
Items is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "Uniform Commercial Code" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection.
"VA" shall mean the Veterans Administration, an agency of the United
States of America, or any successor thereto including the Administrator of
Veterans Affairs.
"Wet-Ink Mortgage Loan" shall mean an Eligible Asset which is sold to
Buyer simultaneously with or one day prior to the origination thereof by
Seller, which origination is in accordance with the Underwriting
Guidelines and is funded in part or in whole with proceeds of the sale of
the Eligible Asset to Buyer advanced directly to a Settlement Agent or
with respect to a Check Funded Loan, pursuant to the Custodial and
Disbursement Agreement and Check Disbursement Agreement or Official Check
Disbursement Agreement, as applicable.
"Wet-Ink Sub-Limit" shall mean with respect to (i) all Committed
Transactions on any of the first five (5) Business Days and the last three
(3) Business Days of each calendar month $100,000,000 and at all other
times, $80,000,000 and (ii) Uncommitted Transactions on any of the first
five (5) Business Days and the last three (3) Business Days of each
calendar month $175,000,000 and at all other times $150,000,000.
3. INITIATION; TERMINATION
(a) Conditions Precedent to Effective Date. It is a condition precedent to the
Effective Date hereof, and Buyer's obligations hereunder are subject to
the satisfaction of the condition precedent that Buyer shall have received
from Seller any fees and expenses payable hereunder, and all of the
following documents, each of which shall be satisfactory in form and
substance to Buyer and its counsel:
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(1) The following Repurchase Documents delivered to Buyer:
(A) Master Repurchase Agreement. This Second Amended and
Restated Master Repurchase Agreement duly completed and
executed by the parties thereto. In addition, Seller shall
have taken such other action as Buyer shall have requested in
order to perfect the security interests created pursuant to
this Agreement, including filing of UCC financing statements
in form and substance satisfactory to Buyer;
(B) Custodial and Disbursement Agreement. The Second
Amended and Restated Custodial and Disbursement Agreement,
duly executed and delivered by each party thereto. In
addition, Seller shall have taken such other action as Buyer
shall have requested in order to transfer the Purchased Assets
pursuant to this Agreement;
(C) Check Disbursement Agreement. The Amended and
Restated Check Disbursement Agreement, duly executed and
delivered by each party thereto.
(D) Official Check Disbursement Agreement. The Amended
and Restated Official Check Disbursement Agreement duly
executed and delivered by each party thereto.
(E) Consents and Waivers. Any and all consents and
waivers required under the Existing Financing Facilities; and
(F) UCC Financing Statements. UCC Financing Statements
naming each Seller Entity as Debtor and Buyer as Secured Party
and describing the Purchased Items.
(2) Opinions of Counsel. An opinion or opinions of outside counsel to
each Seller Entity, substantially in the form of Exhibit III;
(3) Organizational Documents. A good standing certificate and certified
copies of the charter and by-laws (or equivalent documents) of each
Seller Entity and of all corporate or other authority for each
Seller Entity with respect to the execution, delivery and
performance of the Repurchase Documents and each other document to
be delivered by each Seller Entity from time to time in connection
herewith (and Buyer may conclusively rely on such certificate until
it receives notice in writing from such Seller Entity, as applicable
to the contrary);
(4) Underwriting Guidelines. A copy of Seller's current Underwriting
Guidelines, and any material changes to the Underwriting Guidelines
made since the Underwriting Guidelines were last delivered to Buyer;
(5) Other Documents. Such other documents as Buyer may reasonably
request, in form and substance reasonably acceptable to Buyer; and
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(6) Commitment Fee. Seller shall have paid to Buyer the Commitment Fee.
(b) Conditions Precedent to all Transactions. Buyer's obligation to enter
into each Committed Transaction (including the initial Transaction)
and, in the event Buyer chooses, in its sole discretion, to enter into
an Uncommitted Transaction pursuant to Section 3(c) below, Buyer's
obligation to enter into each Uncommitted Transaction, is subject to
the satisfaction of the following further conditions precedent, both
immediately prior to entering into such Transaction and also after
giving effect to the consummation thereof and the intended use of the
proceeds of the sale:
(1) Seller shall have delivered a Transaction Request via Electronic
Transmission in accordance with the procedures set forth in Section
3(c).
(2) no Default or Event of Default shall have occurred and be continuing
under the Repurchase Documents;
(3) after giving effect to the requested Transaction, the aggregate
outstanding Purchase Price of the Transactions outstanding shall not
exceed the Maximum Amount;
(4) both immediately prior to the requested Transaction and also after
giving effect thereto and to the intended use thereof, the
representations and warranties made by Seller in Section 10, shall
be true, correct and complete on and as of such Purchase Date in all
material respects with the same force and effect as if made on and
as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date);
(5) after giving effect to the requested Transaction, the aggregate
outstanding Purchase Price of the Transactions outstanding shall not
exceed the Asset Value of all the Purchased Assets subject to
outstanding Transactions;
(6) subject to Buyer's right to perform one or more Due Diligence
Reviews pursuant to Section 26, Buyer shall have completed its due
diligence review of the Mortgage File for each Purchased Asset, and
such other documents, records, agreements, instruments, mortgaged
properties or information relating to such Purchased Asset as Buyer
in its sole discretion deems appropriate to review and such review
shall be satisfactory to Buyer in its sole discretion;
(7) with respect to any Eligible Asset to be purchased hereunder on the
related Purchase Date which is not serviced by the Seller, Seller
shall have provided to Buyer a copy of the related Servicing
Agreement, certified as a true, correct and complete copy of the
original, together with a Servicer Notice, fully executed by Seller
and the Servicer;
(8) Buyer shall have received all fees and expenses of counsel to Buyer
as contemplated by Section 14(b) and, to the extent Seller is
required hereunder to reimburse Buyer for such amounts, Buyer shall
have received the reasonable costs and expenses incurred by it in
connection with the entering into of any
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Transaction hereunder, including, without limitation, costs
associated with due diligence recording or other administrative
expenses necessary or incidental to the execution of any Transaction
hereunder, which amounts, at Buyer's option, may be withheld from
the sale proceeds of any Transaction hereunder;
(9) Buyer shall have approved, in its sole discretion, all exceptions to
the Underwriting Guidelines;
(10) none of the following shall have occurred and/or be continuing:
(A) an event or events shall have occurred in the good
faith determination of Buyer resulting in the effective
absence of a "repo market" or comparable "lending market" for
financing debt obligations secured by mortgage loans or
securities or an event or events shall have occurred resulting
in Buyer not being able to finance Purchased Assets through
the "repo market" or "lending market" with traditional
counterparties at rates which would have been reasonable prior
to the occurrence of such event or events; or
(B) an event or events shall have occurred resulting in
the effective absence of a "securities market" for securities
backed by mortgage loans or an event or events shall have
occurred resulting in Buyer not being able to sell securities
backed by mortgage loans at prices which would have been
reasonable prior to such event or events; or
(C) there shall have occurred a material adverse change
in the financial condition of Buyer which affects (or can
reasonably be expected to affect) materially and adversely the
ability of Buyer to fund its obligations under this Agreement;
(11) with respect to each Eligible Asset that is not a Wet-Ink Mortgage
Loan, Buyer shall have received from Custodian on each Purchase Date
an Asset Schedule and Exception Report, dated the Purchase Date,
duly completed and with exceptions acceptable to Buyer in its sole
discretion in respect of Eligible Assets to be purchased hereunder
on such Business Day;
(12) Buyer shall have received from Seller a Warehouse Lender's Release
Letter substantially in the form attached to the Custodial and
Disbursement Agreement (or such other form acceptable to Buyer) or a
Seller's Release Letter substantially in the form attached to the
Custodial and Disbursement Agreement (or such other form acceptable
to Buyer) covering each Eligible Asset to be sold to Buyer;
(13) prior to the purchase of any Mortgage Loan acquired (by purchase or
otherwise) by Seller from any third party, including without
limitation, any Affiliate of Seller, Buyer shall have received a
True Sale Certification;
(14) Buyer shall not have determined that the introduction of, or a
change in, any Requirement
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of Law or in the interpretation or administration of any Requirement
of Law applicable to Buyer has made it unlawful, and no Governmental
Authority shall have asserted that it is unlawful, for Buyer to
enter into Transactions;
(15) the Repurchase Date for such Transaction is not later than the
Termination Date;
(16) after giving effect to the requested Committed Transaction, the
aggregate amount of outstanding Committed Transactions shall not
have Purchase Prices in excess of the Maximum Committed Amount;
(17) after giving effect to the requested Uncommitted Transaction, the
aggregate amount of outstanding Uncommitted Transactions shall not
have Purchase Prices in excess of the Maximum Uncommitted Amount;
(18) to the extent there are any MERS Designated Mortgage Loans, Buyer
shall have received from Seller a copy of a fully executed
Electronic Tracking Agreement;
(19) Buyer shall have received from Seller, with respect to MERS
Designated Mortgage Loans, a MERS Report reflecting Seller as
Investor and no Person named in the Interim Funder field for each
such MERS Designated Mortgage Loan;
(20) immediately prior to the requested Transaction and also after giving
effect thereto and to the intended use of the proceeds thereof, the
Tangible Net Worth of AHMIC and its consolidated Subsidiaries shall
be at least $500,000,000; provided, however, that in no event shall
the Seller's failure to meet such Tangible Net Worth test result in
any Non-Use Fee or Termination Fee to the Seller hereunder; and
(21) immediately prior to the requested Transaction and also after giving
effect thereto and to the intended use of the proceeds thereof,
Seller shall not permit, for any period of three (3) consecutive
calendar months, Net Income of AHMIC and its consolidated
Subsidiaries for such period determined on a monthly basis, before
income taxes for such period and distributions made during such
period, to be less than $1.00.
With respect to any failure of condition precedent to any Transaction
resulting from the failure of Buyer to approve any replacement facility to
the Existing Facilities, in no event shall such failure result in any
Non-Use Fee or Termination Fee to the Seller hereunder.
Each Transaction Request delivered by Seller hereunder shall constitute a
certification by Seller that all the conditions set forth in this Section
3(b) have been satisfied (both as of the date of such notice or request
and as of the date of such purchase) and shall be deemed to be a request
for a Committed Transaction; provided that after giving effect to the
requested Committed Transaction, the aggregate amount of outstanding
Committed Transactions shall not have Purchase Prices in excess of the
Maximum Committed Amount, in which case such request shall be deemed a
request for an Uncommitted Transaction.
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(c) This Agreement is not a commitment by Buyer to enter into Uncommitted
Transactions with Seller but rather sets forth the procedures to be
used in connection with periodic requests for Buyer to enter into
Uncommitted Transactions with Seller. Seller hereby acknowledges that
Buyer is under no obligation to agree to enter into, or to enter into,
any Uncommitted Transaction pursuant to this Agreement. Seller shall
request a Transaction by delivering to Custodian, Disbursement Agent
and Buyer via Electronic Transmission a request in the form of
Exhibit I attached hereto (a "Transaction Request") in accordance with
the timeframe set forth in Section 3(a) of the Custodial and
Disbursement Agreement. Such Transaction Request shall describe the
Purchased Assets in a Seller Asset Schedule and set forth (i) the
Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date,
(iv) the Pricing Rate applicable to the Transaction, (v) the applicable
Purchase Percentages, (vi) the applicable Class or Classes for each
Mortgage Loan for which Seller is requesting the Transaction and
(vii) additional terms or conditions not inconsistent with this
Agreement.
With respect to any request for an Uncommitted Transaction, unless
otherwise agreed in writing, upon receipt of the Transaction Request,
Buyer may, in its sole discretion, agree to enter into that portion of the
requested Transaction representing a request for an Uncommitted
Transaction, and such agreement shall be evidenced by a Confirmation to be
delivered to Seller on the Purchase Date as described below.
On each Purchase Date, Buyer shall forward to Seller a confirmation (a
"Confirmation") by Electronic Transmission setting forth with respect to
each Transaction funded on such date, (1) the mortgage loan number, (2)
the Purchase Price for such Purchased Assets, (3) the Market Value of the
related Mortgage Loans as of the date of such Confirmation, (4) the
outstanding principal amount of the related Mortgage Loans, (5) the
Repurchase Date, (6) the Pricing Rate and (7) the Class designations of
such Purchased Assets. Buyer shall forward to Seller a revised
Confirmation by Electronic Transmission notifying Seller as to any changes
made by Buyer in the Pricing Spread, Purchase Percentage or Reduction
Amount pursuant to the terms hereof.
On each date that all the documents set forth in Section 2(a)(i) of the
Custodial and Disbursement Agreement are received by the Custodian with
respect to any Wet-Ink Mortgage Loan, and Custodian delivers to Buyer a
Trust Receipt attaching an Asset Schedule and Exception Report with
respect to such Eligible Assets, Buyer shall forward to Seller a new
Confirmation by Electronic Transmission setting forth the following
information, updated to reflect the revised Pricing Rate, and, if
applicable, Market Value as a result of the conversion of such Mortgage
Loan, (1) the mortgage loan number, (2) the Purchase Price for such
Purchased Assets, (3) the Market Value of the related Mortgage Loans, (4)
the outstanding principal amount of the related Mortgage Loans, (5) the
Repurchase Date, (6) the Pricing Rate and (7) the Class designations of
such Purchased Assets.
In the event Seller disagrees with any terms of the Confirmation, Seller
shall notify Buyer in writing of such disagreement within one (1) Business
Day after receipt of such Confirmation unless a corrected Confirmation is
sent by Buyer. An objection sent by Seller must state specifically that it
is an objection, must specify the provision(s) being
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objected to by Seller, must set forth such provision(s) in the manner that
Seller believes they should be stated, and must be received by Buyer no
more than one (1) Business Day after the Confirmation was received by
Seller.
(d) Any Confirmation by Buyer shall be deemed to have been received by Seller
on the date actually received by Seller.
(e) Except as set forth in Section 3(c), each Confirmation, together with
this Agreement, shall constitute conclusive evidence of the terms
agreed between Buyer and Seller with respect to the Transaction to
which the Confirmation relates, and Seller's acceptance of the related
proceeds shall constitute Seller's agreement to the terms of such
Confirmation. It is the intention of the parties that each Confirmation
shall not be separate from this Agreement but shall be made a part of
this Agreement.
(f) On the Repurchase Date, termination of a Transaction will be effected
by transfer to Seller or its designee of the Purchased Assets (and any
Income in respect thereof received by Buyer not previously credited or
transferred to, or applied to the obligations of, Seller pursuant to
Section 5) which amount shall be netted against the simultaneous
receipt of the Repurchase Price by Buyer. To the extent a net amount is
owed to one party, the other party shall pay such amount to such party.
Seller is obligated to obtain the Mortgage Files from Buyer or its
designee (including Custodian) at Seller's expense on the Repurchase
Date. Any payment made by Seller to repurchase Purchased Assets shall
be first applied to repurchase Purchased Assets under Uncommitted
Transactions until all outstanding Uncommitted Transactions have been
terminated; it being understood that it is the intention of the parties
hereto that at no time shall there be any outstanding Uncommitted
Transactions when the aggregate amount of the Purchase Price with
respect to all outstanding Committed Transactions is less than the
Maximum Committed Amount.
(g) Subject to the terms and conditions of this Agreement, during the term of
this Agreement Seller may sell to Buyer, repurchase from Buyer Eligible
Assets hereunder and resell to Buyer Repurchased Mortgage Loans that are
Eligible Assets hereunder.
(h) In no event shall a Transaction be entered into when any Default or Event
of Default has occurred and is continuing or when the Repurchase Date for
such Transaction would be later than the Termination Date.
(i) With respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan,
Seller shall deliver to Custodian the Mortgage File pertaining to each
Eligible Asset to be purchased by Buyer no later than the time set forth
in the Custodial and Disbursement Agreement.
(j) With respect to each Eligible Asset that is not a Wet-Ink Mortgage
Loan, pursuant to the Custodial and Disbursement Agreement, Custodian
shall deliver to Buyer and Seller an Asset Schedule and Exception
Report with respect to the Eligible Assets which Seller has requested
Buyer purchase on such Purchase Date, and no later than 5 p.m., New
York City time, on each Purchase Date, Custodian shall deliver to Buyer
a Trust Receipt in respect of all such Eligible Assets purchased by
Buyer on such Purchase Date. Subject to
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the provisions of this Section 3 and Section 11 of the Custodial and
Disbursement Agreement, the Purchase Price for each Eligible Asset that is
not a Wet-Ink Mortgage Loan will be made available to Seller by
Disbursement Agent transferring, the aggregate amount of such Purchase
Price in accordance with the Custodial and Disbursement Agreement.
(k) With respect to each Eligible Asset that is a Wet-Ink Mortgage Loan,
Seller shall cause the Settlement Agent to send the Custodian a
facsimile of the associated Escrow Instruction Letter on each Purchase
Date. Subject to the provisions of this Section 3 and Section 11 of the
Custodial and Disbursement Agreement, the Purchase Price for each
Eligible Asset which is a Wet-Ink Mortgage Loan will then be made
available to Seller by Disbursement Agent transferring the aggregate
amount of such Purchase Price in accordance with the Custodial and
Disbursement Agreement. Seller shall deliver the Mortgage File related
thereto and the original Escrow Instruction Letter to Custodian, for
receipt by Custodian no later than ten (10) Business Days following the
Purchase Date
(l) Seller may repurchase Purchased Assets without penalty or premium, but
subject to the last sentence of this Section 3(l), on any date. The
Repurchase Price payable for the repurchase of any such Purchased Asset
shall be reduced as provided in Section 5(d). If Seller intends to make
such a repurchase, Seller shall give one (1) Business Day's prior
written notice thereof to Buyer, designating the Purchased Assets to be
repurchased. If such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein, and, on
receipt, such amount shall be applied to the Repurchase Price for the
designated Purchased Assets. The amount of the original Purchase Price
of the Purchased Assets thus repurchased shall be available for
subsequent Transactions subject to the terms of this Agreement. If any
Purchased Asset is repurchased on any date other than the Repurchase
Date for such Transaction, Seller shall pay to Buyer any amount
determined by Buyer, in its sole discretion, as necessary to compensate
Buyer for any additional losses, costs or expenses which it may
reasonably incur as a result of such repurchase, including, without
limitation, any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by
Buyer to fund or maintain such Transaction.
(m) Seller agrees to pay to Buyer on the first Business Day following the
6 month anniversary of the Effective Date and every 6 month anniversary
thereafter, a non-use fee (the "Non-Use Fee"), equal to 10 basis points
(0.10%) per annum on the average daily amount of the unutilized portion
of the Maximum Committed Amount during the immediately ended 6-month
period for which such payment is made, if the average daily amount of
unutilized portion of the Maximum Committed Amount is in excess of 50%
of the Maximum Committed Amount, such payment to be made in Dollars, in
immediately available funds, without deduction, set-off or
counterclaim, to Buyer at the account set forth in Section 8(a) hereof.
Notwithstanding the foregoing, Seller will not be obligated to pay a
Non-Use Fee in connection with the failure to satisfy the condition set
forth in Section 3(b)(20) or 3(b)(21).
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(n) On any day on which the Margin Base exceeds the aggregate outstanding
Purchase Price of all Transactions, so long as no Default or Event of
Default has occurred and is continuing:
(1) Seller may prepare a Request for Additional Transactions for Excess
Margin in the form of Exhibit VIII attached hereto ("Request for
Additional Transactions for Excess Margin"), (A) specifying (i) the
increase in Purchase Price for all outstanding Transactions and the
requested Purchase Date, (ii) the Excess Margin with respect to all
outstanding Transactions before giving effect to the requested
Transaction, (iii) the remaining Excess Margin after giving effect
to the requested Transaction, and (iv) the aggregate outstanding
Purchase Price of the Transactions after giving effect to the
requested Transaction, and (B) including a certification that, upon
the consummation of the additional Transactions, the Margin Base
will be equal to or greater than the aggregate outstanding Purchase
Price of all Transactions, and the excess of the Margin Base over
the aggregate outstanding Purchase Price, after giving effect to the
Transaction, shall be the "Excess Margin".
(2) Seller shall transmit via Electronic Transmission the Request for
Additional Transactions for Excess Margin to Disbursement Agent and
Buyer prior to 12:00 noon, New York City time, on the requested
Purchase Date. Upon confirming that the Request for Additional
Transactions for Excess Margin correctly reflects the information
set forth in Section 3(n)(1) and that, after giving effect to the
requested Transaction, the amount of the Margin Base would be equal
to or greater than the aggregate outstanding Purchase Prices of all
Transactions, Buyer shall cause Disbursement Agent to remit the
additional Purchase Price in the amount set forth in such Request
for Additional Transactions for Excess Margin and send a revised
Confirmation with respect to such Purchased Assets. In the event
that Buyer's assessment of the Margin Base would alter the
information set forth in any Request for Additional Transactions for
Excess Margin, Buyer shall promptly notify Seller in writing of such
assessment.
(3) Buyer shall not be obligated to remit or cause Disbursement Agent to
remit the additional Purchase Price requested pursuant to a Request
for Additional Transactions for Excess Margin which (i) Buyer
reasonably determines is based on erroneous information or would
result in a Transaction other than in accordance with the terms of
this Agreement, or (ii) does not reflect Buyer's current
determination of Market Value as provided in the definition thereof.
(o) At the request of Seller made at least 90 days, but in no event earlier
than 360 days, prior to the then current Termination Date, Buyer may in
its sole discretion extend the Termination Date for a period of 364
additional days or such other period to be determined by Buyer in its
sole discretion by giving written notice of such extension to Seller no
later than sixty (60) days after Buyer's receipt of Seller's request.
Any failure by Buyer to deliver such notice of extension shall be
deemed to be Buyer's determination not to extend the then current
Termination Date.
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4. MARGIN AMOUNT MAINTENANCE
(a) If at any time the Margin Base is less than the aggregate Purchase
Price for all outstanding Transactions (a "Margin Deficit"), then Buyer
may by notice to Seller (as such notice is more particularly set forth
below, a "Margin Deficit Notice") require Seller to transfer to Buyer
or its designee (including Custodian) cash to be applied to reduce the
Purchase Price with respect to all outstanding Transactions such that
the aggregate Asset Value of the Purchased Assets will thereupon equal
or exceed the aggregate Purchase Price for all outstanding
Transactions. If Buyer delivers a Margin Deficit Notice to Seller on or
prior to 10 a.m., New York City time, on any Business Day, then Seller
shall transfer such cash to Buyer no later than 5 p.m. New York City
time, on such Business Day. In the event Buyer delivers a Margin
Deficit Notice to Seller after 10 a.m., New York City time, on any
Business Day, Seller shall be required to transfer such cash no later
than 5 p.m., New York City time, on the subsequent Business Day. All
cash transferred to Buyer pursuant to this Section 4(a) shall be
deposited in the account set forth in Section 8(a) hereof and shall be
deemed to reduce the aggregate Purchase Price with respect to all
outstanding Transactions.
(b) Buyer's election, in its sole and absolute discretion, not to deliver a
Margin Deficit Notice at any time there is a Margin Deficit shall not in
any way limit or impair its right to deliver a Margin Deficit Notice at
any time a Margin Deficit exists.
5. INCOME PAYMENTS
(a) Where a particular Transaction's term extends over an Income payment date
on the Purchased Assets subject to that Transaction such Income shall be
the property of Buyer. Buyer agrees that until a Default or an Event of
Default has occurred and Buyer otherwise directs as contemplated in each
Servicer Notice, each Servicer that is not Seller shall be permitted to
continue to remit Income in accordance with the respective Servicing
Agreement. In the event that Seller is the Servicer of any Mortgage Loans,
Buyer agrees that until a Default or an Event of Default has occurred,
Seller shall be permitted to continue to remit or retain Income with
respect to such Mortgage Loans in accordance with its current existing
business practice. Upon notice of a Default or an Event of Default to
Seller hereunder or to Servicer pursuant to a Servicer Notice, Seller
shall, and pursuant to the Servicer Notice, Servicer shall be required to,
deposit promptly all Income in a deposit account (the title of which shall
indicate that the funds therein are being held in trust for Buyer) (the
"Collection Account") with the Bank and which is subject to the Account
Agreement. All funds in the Collection Account may be withdrawn by Buyer
and applied as determined by Buyer. Seller may not give any instruction
with respect to the Collection Account after a Default or an Event of
Default.
(b) Notwithstanding that Buyer and Seller intend that the Transactions
hereunder be sales to Buyer of the Purchased Assets, Seller shall pay
to Buyer the accreted value of the Price Differential (less any amount
of such Price Differential previously paid by Seller to Buyer) of each
Transaction through but not including the Payment Calculation Date
(each such payment, a "Periodic
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Advance Repurchase Payment") on each Payment Date. Buyer shall deliver to
Seller, via Electronic Transmission, notice of the required Periodic
Advance Repurchase Payment on or prior to the second Business Day
preceding each Payment Date. If Seller fails to make all or part of the
Periodic Advance Repurchase Payment by 5:00 p.m., New York City time, on
the Payment Date, Seller shall be obligated to pay to Buyer (in addition
to, and together with, the Periodic Advance Repurchase Payment) interest
on the unpaid amount of the Periodic Advance Repurchase Payment at a rate
per annum equal to the Post-Default Rate (the "Late Payment Fee") until
the overdue Periodic Advance Repurchase Payment is received in full by
Buyer.
(c) Seller shall hold or cause to be held for the benefit of, and in trust
for, Buyer all income, including without limitation all Income received
by or on behalf of Seller with respect to such Purchased Assets. All
such Income shall be held in trust for Buyer, shall constitute the
property of Buyer and shall not be commingled with other property of
Seller, any affiliate of Seller or the applicable Servicer except as
expressly permitted above in this Section 5. Funds deposited in the
Collection Account during any month shall be held therein, in trust for
Buyer.
(d) Buyer shall offset against the Repurchase Price of each such
Transaction all Income and Periodic Advance Repurchase Payments
actually received by Buyer for such Transaction pursuant to
Sections 5(a) and 5(b) as of the applicable Repurchase Date,
respectively, excluding any Late Payment Fees paid pursuant to
Section 5(b); it being understood that the Late Payment Fees are
properties of Buyer that are not subject to offset against the
Repurchase Price.
6. REQUIREMENTS OF LAW
(a) If any Requirement of Law (other than with respect to any amendment made
to Buyer's certificate of incorporation and by-laws or other
organizational or governing documents) or any change in the interpretation
or application thereof or compliance by Buyer with any request or
directive (whether or not having the force of law) from any central bank
or other Governmental Authority made subsequent to the date hereof:
(1) shall subject Buyer to any tax of any kind whatsoever with respect
to this Agreement or any Transaction (excluding net income taxes) or
change the basis of taxation of payments to Buyer in respect
thereof;
(2) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of,
advances, or other extensions of credit by, or any other acquisition
of funds by, any office of Buyer which is not otherwise included in
the determination of the Eurodollar Rate hereunder;
(3) shall impose on Buyer any other condition;
and the result of any of the foregoing is to increase the cost to
Buyer, by an amount which Buyer deems to be material, of entering,
continuing or maintaining any Transaction or to reduce any amount
due or owing hereunder in respect thereof, then, in any such case,
Seller shall promptly pay Buyer such additional
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amount or amounts as calculated by Buyer in good faith as will
compensate Buyer for such increased cost or reduced amount
receivable.
(b) If Buyer shall have determined that the adoption of or any change in
any Requirement of Law (other than with respect to any amendment made
to Buyer's certificate of incorporation and by-laws or other
organizational or governing documents) regarding capital adequacy or in
the interpretation or application thereof or compliance by Buyer or any
corporation controlling Buyer with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have
the effect of reducing the rate of return on Buyer's or such
corporation's capital as a consequence of its obligations hereunder to
a level below that which Buyer or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration
Buyer's or such corporation's policies with respect to capital
adequacy) by an amount deemed by Buyer to be material, then from time
to time, Seller shall promptly pay to Buyer such additional amount or
amounts as will compensate Buyer for such reduction.
(c) Any payments made by Seller to Buyer shall be free and clear of, and
without deduction or withholding for, any taxes; provided, however,
that if Seller shall be required by law to deduct or withhold any taxes
from any sums payable to Buyer, then Seller shall (A) make such
deductions or withholdings and pay such amounts to the relevant
authority in accordance with applicable law, (B) pay to Buyer the sum
that would have been payable had such deduction or withholding not been
made, and (C) at the time the Price Differential is paid, pay to Buyer
all additional amounts as specified by Buyer to preserve the after-tax
yield Buyer would have been received had such tax not been imposed.
(d) If Buyer becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify Seller of the event by reason of which
it has become so entitled. A certificate as to any additional amounts
payable pursuant to this Section 6(d) submitted by Buyer to Seller shall
be conclusive in the absence of manifest error.
7. SECURITY INTEREST
(a) Each of the following items or types of property, whether now owned or
hereafter acquired, now existing or hereafter created and wherever
located, is hereinafter referred to as the "Purchased Items": all
Mortgage Loans, all rights under each Purchase Agreement (but not the
obligations thereunder), all Interest Rate Protection Agreements, all
Mortgage Files, including without limitation all promissory notes, all
Servicing Records relating to the Mortgage Loans, all Servicing
Agreements relating to the Mortgage Loans and any other collateral
pledged hereunder or otherwise relating to such Mortgage Loans,
together with all files, documents, instruments, surveys, certificates,
correspondence, appraisals, computer programs, computer storage media,
accounting records and other books and records relating thereto, all
mortgage guaranties and insurance (issued by governmental agencies or
otherwise) and any mortgage insurance certificate or other document
evidencing such mortgage guaranties or insurance relating to any
Mortgage Loan, all servicing fees to which such Seller is entitled and
servicing and other rights relating to the Mortgage Loans, all Servicer
Accounts established
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pursuant to any Servicing Agreement and all amounts on deposit therein,
from time to time, all Purchase Agreements or other agreements or
contracts relating to, constituting, or otherwise governing, any or all of
the foregoing to the extent they relate to the Purchased Assets including
the right to receive principal and interest payments with respect to the
Purchased Assets and the right to enforce such payments, the Collection
Account and all monies from time to time on deposit in the Collection
Account, the DDA Account and all monies from time to time on deposit in
the DDA Account, the Check Disbursement Account and all monies from time
to time on deposit in the Check Disbursement Account, all "general
intangibles", "accounts", "chattel paper", "deposit accounts" and
"investment property" as defined in the Uniform Commercial Code as in
effect from time to time relating to or constituting any and all of the
foregoing, and any and all replacements, substitutions, distributions on
or proceeds of any and all of the foregoing.
(b) Buyer and Seller intend that the Transactions hereunder be sales to
Buyer of the Purchased Assets and not loans from Buyer to Seller
secured by the Purchased Assets. However, in order to preserve Buyer's
rights under this Agreement in the event that a court or other forum
recharacterizes the Transactions hereunder as loans and as security for
the performance by Seller of all of Seller's obligations to Buyer
hereunder and the Transactions entered into hereunder ("Repurchase
Obligations") and the Seller-Related Obligations, each Seller Entity
hereby assigns, pledges and grants a security interest in all of its
right, title and interest in, to and under the Purchased Items and the
Purchased Assets to Buyer to secure the Repurchase Obligations and the
Seller-Related Obligations, including without limitation the repayment
of all amounts owing to Buyer hereunder. The assignment, pledge and
grant of security interest contained herein shall be, and each Seller
Entity hereby represents and warrants to Buyer that it is, a first
priority perfected security interest. Each Seller Entity agrees to mark
its computer records and tapes to evidence the interests granted to
Buyer hereunder. All Purchased Items shall secure the payment of all
obligations of Seller now or hereafter existing under this Agreement,
including, without limitation, Seller's obligation to repurchase
Purchased Assets, or if such obligation is so recharacterized as a
loan, to repay such loan, for the Repurchase Price and to pay any and
all other amounts owing to Buyer hereunder.
(c) Pursuant to the Custodial and Disbursement Agreement, Custodian shall hold
the Mortgage Files as exclusive bailee and agent for Buyer pursuant to the
terms of the Custodial and Disbursement Agreement and shall deliver to
Buyer Trust Receipts each to the effect that Custodian has reviewed such
Mortgage Files in the manner and to the extent required by the Custodial
and Disbursement Agreement and identifying any deficiencies in such
Mortgage Files as so reviewed.
8. PAYMENT, TRANSFER AND CUSTODY
(a) Unless otherwise mutually agreed in writing, all transfers of funds to
be made by Seller hereunder shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to Buyer
at the following account maintained by Buyer; Account No. GLA 111569,
account name SER, Bank of New York, ABA No. 021000018, Attn: Eric
Seyffer, not later than 3 p.m., New York City time, on the date on
which such
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payment shall become due (and each such payment made after such time shall
be deemed to have been made on the next succeeding Business Day). Seller
acknowledges that it has no rights of withdrawal from the foregoing
account.
(b) On the Purchase Date for each Transaction, ownership of the Purchased
Assets shall be transferred to Buyer or its designee (including
Custodian) against the simultaneous transfer of the Purchase Price as
set forth in Section 11 of the Custodial and Disbursement Agreement not
later than 6 p.m., New York City time, simultaneously with the delivery
to Custodian of the Purchased Assets relating to each Transaction.
Seller hereby sells, transfers, conveys and assigns to Buyer or its
designee (including Custodian) without recourse, but subject to the
terms of this Agreement, all the right, title and interest of Seller in
and to the Purchased Assets together with all right, title and interest
in and to the proceeds of any related Purchased Items.
(c) In connection with such sale, transfer, conveyance and assignment, on or
prior to each Purchase Date, Seller shall deliver or cause to be delivered
and released to Buyer or its designee (including Custodian) (i) the
Custodial Identification Certificate and (ii) the documents identified in
the Custodial and Disbursement Agreement.
(d) Any Mortgage Files not delivered to Buyer or its designee (including
Custodian) are and shall be held in trust by Seller or its designee for
the benefit of Buyer as the owner thereof. Seller or its designee shall
maintain a copy of the Mortgage File and the originals of the Mortgage
File not delivered to Buyer or its designee (including Custodian). The
possession of the Mortgage File by Seller or its designee is at the
will of Buyer for the sole purpose of servicing the related Purchased
Asset, and such retention and possession by Seller or its designee is
in a custodial capacity only. Each Mortgage File retained or held by
Seller or its designee shall be segregated on Seller's books and
records from the other assets of Seller or its designee and the books
and records of Seller or its designee shall be marked appropriately to
reflect clearly the sale of the related Purchased Asset to Buyer.
Seller or its designee shall release its custody of the Mortgage File
only in accordance with written instructions from Buyer, unless such
release is required as incidental to the servicing of the Purchased
Assets or is in connection with a repurchase of any Purchased Asset by
Seller.
9. HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS
Title to all Purchased Assets and Purchased Items shall pass to Buyer and
Buyer shall have free and unrestricted use of all Purchased Assets and
Purchased Items. Nothing in this Agreement shall preclude Buyer from
engaging in repurchase transactions with the Purchased Assets and
Purchased Items or otherwise pledging, repledging, transferring,
hypothecating, or rehypothecating the Purchased Assets and Purchased
Items, all on terms that Buyer may determine in its sole discretion.
Nothing contained in this Agreement shall obligate Buyer to segregate any
Purchased Assets and Purchased Items delivered to Buyer by Seller.
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10. SELLER REPRESENTATIONS
Each of the Seller Entities, jointly and severally, represents and
warrants to Buyer that as of the Purchase Date for the purchase of any
Purchased Assets by Buyer from Seller and as of the date of this Agreement
and any Transaction hereunder and at all times while the Repurchase
Documents and any Transaction hereunder is in full force and effect:
(a) Acting as Principal. Seller will engage in such Transactions as principal
(or, if agreed in writing in advance of any Transaction by the other party
hereto, as agent for a disclosed principal);
(b) Solvency. Neither the Repurchase Documents nor any Transaction
thereunder are entered into in contemplation of insolvency or with
intent to hinder, delay or defraud any of Seller's creditors. The
transfer of the Mortgage Loans subject hereto and the obligation to
repurchase such Mortgage Loans is not undertaken with the intent to
hinder, delay or defraud any of Seller's creditors. None of the Seller
Entities is insolvent within the meaning of 11 U.S.C. Section 101(32)
or any successor provision thereof and the transfer and sale of the
Mortgage Loans pursuant hereto and the obligation to repurchase such
Mortgage Loan (i) will not cause any Seller Entity to become insolvent,
(ii) will not result in any Seller Entity having unreasonably small
capital, and (iii) will not result in debts that would be beyond
Seller's ability to pay as the same mature. Seller received reasonably
equivalent value in exchange for the transfer and sale of the Purchased
Assets and Purchased Items subject hereto;
(c) No Broker. Seller has not dealt with any broker, investment banker, agent,
or other person, except for Buyer and Milestone Merchant Partners, who may
be entitled to any commission or compensation in connection with the sale
of Purchased Assets pursuant to this Agreement;
(d) Ability to Perform. Seller does not believe, nor does it have any reason
or cause to believe, that it cannot perform each and every covenant
contained in the Repurchase Documents;
(e) No Defaults. No Default or Event of Default has occurred and is continuing
hereunder;
(f) Legal Name; Existence; Organizational Identification Number. Each
Seller Entity's exact legal name is, and for the immediately preceding
four months has been, American Home Mortgage Corp., American Home
Mortgage Investment Corp., American Home Mortgage Acceptance, Inc.,
American Home Mortgage Holdings, Inc. or Columbia National,
Incorporated, as applicable, or such other legal name with respect to a
Seller Entity or Entities as may be provided to Buyer by such Seller
Entity or Entities from time to time by not less than ten (10) days
prior written notice to Buyer. Seller shall cooperate with Buyer in
filing amendments to financing statements in connection with any such
name changes. Each Seller Entity (i) is, and for the immediately
preceding twelve months (or, if such Seller Entity was formed within
the preceding twelve months, since the date of its formation) has been,
a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation; (ii) has all
requisite
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corporate or other power, and has all governmental licenses,
authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted, except
where the lack of such licenses, authorizations, consents and approvals
would not be reasonably likely to have a Material Adverse Effect; and
(iii) is qualified to do business and is in good standing in all other
jurisdictions in which the nature of the business conducted by it makes
such qualification necessary, except where failure so to qualify could not
be reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect. The jurisdiction of incorporation and the
corresponding organizational identification number for each Seller Entity
are as set forth on Schedule 2 attached hereto.
(g) Financial Condition. Seller has heretofore furnished to Buyer a copy of
(a) AHMIC's consolidated balance sheet and the consolidated balance
sheets of AHMIC's consolidated Subsidiaries for the fiscal year ended
December 31, 2003, and the related AHMIC consolidated statements of
income and retained earnings and of cash flows for AHMIC and AHMIC's
consolidated Subsidiaries for such fiscal year, each audited by and
with the unqualified opinion thereon of Deloitte and Touche LLP and
(b) AHMIC's consolidated balance sheet and the consolidated balance
sheets of AHMIC's consolidated Subsidiaries for the quarterly fiscal
periods of AHMIC ended March 31, 2004 and the related consolidated
statements of income and retained earnings and of cash flows for AHMIC
and AHMIC's consolidated Subsidiaries for each such quarterly fiscal
period, setting forth in each case in comparative form the figures for
the previous year. All such financial statements are complete and
correct and fairly present, in all material respects, the consolidated
financial position of AHMIC and AHMIC's Subsidiaries and the
consolidated results of their operations as at such dates and for such
fiscal periods, all in accordance with GAAP applied on a consistent
basis. Since March 31, 2004, there has been no material adverse change
in the consolidated business, operations or financial condition of
AHMIC and AHMIC's consolidated Subsidiaries taken as a whole from that
set forth in said financial statements.
(h) Litigation. There are no actions, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are pending
or threatened) or other legal or arbitrable proceedings affecting any
Seller Entity or any of its respective Subsidiaries or affecting any of
the Property of any of them before any Governmental Authority which
(i) questions or challenges the validity or enforceability of the
Repurchase Documents or any action to be taken in connection with the
transactions contemplated hereby, (ii) makes a claim or claims in an
aggregate amount greater than $1,500,000, or (iii) individually or in
the aggregate, if adversely determined, could reasonably be likely to
have a Material Adverse Effect.
(i) No Breach. Neither (a) the execution and delivery of the Repurchase
Documents nor (b) the consummation of the transactions therein
contemplated to be entered into by Seller, in compliance with the terms
and provisions thereof will conflict with or result in a breach of the
organizational documents of any Seller Entity or any applicable law,
rule or regulation, or any order, writ, injunction or decree of any
Governmental Authority, or any Servicing Agreement or other material
agreement or instrument to which any Seller Entity or any of its
respective Subsidiaries is a party or by which any of them or any of
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their Property is bound or to which any of them is subject, or
constitute a default under any such material agreement or instrument or
result in the creation or imposition of any Lien (except for the Liens
created pursuant to the Repurchase Documents) upon any Property of any
Seller Entity or any of its respective Subsidiaries pursuant to the
terms of any such agreement or instrument.
(j) Action. Each Seller Entity has all necessary corporate or other power,
authority and legal right to execut