Exhibit 10.1
--------------------------------------------------------------------------------
MASTER REPURCHASE AGREEMENT
Among:
DB STRUCTURED PRODUCTS, INC., as Buyer
DEUTSCHE BANK SECURITIES INC., as Agent
and
CHIMERA INVESTMENT CORP., as Seller
Dated as of January 31, 2008
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<PAGE>
TABLE OF CONTENTS
1.
APPLICABILITY...........................................................1
2. DEFINITIONS
AND INTERPRETATION..........................................1
3. THE
TRANSACTIONS.......................................................15
4.
CONFIRMATION...........................................................16
5. PAYMENT AND
TRANSFER...................................................16
6. MARGIN
MAINTENANCE.....................................................17
7. INCOME
PAYMENTS........................................................17
8. TAXES; TAX
TREATMENT...................................................17
9. SECURITY
INTEREST; BUYER'S
APPOINTMENT AS ATTORNEY-IN-FACT............19
10. CONDITIONS
PRECEDENT...................................................20
11. RELEASE OF
PURCHASED ASSETS............................................24
12.
RELIANCE...............................................................24
13. REPRESENTATIONS
AND WARRANTIES.........................................24
14. COVENANTS OF
SELLER....................................................27
15. TERMINATION
EVENTS.....................................................34
16. REPURCHASE OF
PURCHASED ASSETS; CHANGE OF LAW..........................34
17.
SUBSTITUTION...........................................................35
18.
RESERVED...............................................................35
19. EVENTS OF
DEFAULT......................................................35
20.
REMEDIES...............................................................38
21. DELAY NOT WAIVER;
REMEDIES ARE CUMULATIVE..............................40
22. USE OF EMPLOYEE
PLAN ASSETS............................................40
23.
INDEMNITY..............................................................40
24. WAIVER OF
REDEMPTION AND DEFICIENCY RIGHTS.............................41
25. REIMBURSEMENT;
SET-OFF.................................................41
26. FURTHER
ASSURANCES.....................................................42
27. ENTIRE AGREEMENT;
PRODUCT OF NEGOTIATION...............................43
28.
TERMINATION............................................................43
29. REHYPOTHECATION;
ASSIGNMENT............................................43
30. AMENDMENTS,
ETC........................................................44
31.
SEVERABILITY...........................................................44
32. BINDING EFFECT;
GOVERNING LAW..........................................44
33. WAIVER OF JURY
TRIAL; CONSENT TO JURISDICTION AND VENUE;
SERVICE OF
PROCESS.....................................................44
34. SINGLE
AGREEMENT.......................................................45
35.
INTENT.................................................................45
36. NOTICES AND OTHER
COMMUNICATIONS.......................................45
37.
CONFIDENTIALITY........................................................46
38. DUE
DILIGENCE..........................................................46
39.
RESERVED...............................................................47
40.
RESERVED...............................................................47
41. THE
AGENT..............................................................47
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<PAGE>
SCHEDULES AND EXHIBITS
----------------------
SCHEDULE 1
LIST OF APPROVED SERVICERS (SERVICING RELEASED LOANS)
SCHEDULE 2
LIST OF APPROVED SERVICERS (SERVICING RETAINED LOANS)
EXHIBIT A
MONTHLY CERTIFICATION
EXHIBIT B-1
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO LOANS
EXHIBIT B-2
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO SECURITIES
EXHIBIT C
RESERVED
EXHIBIT D-1
FORM OF LOAN TRANSACTION NOTICE
EXHIBIT D-2
FORM OF SECURITY TRANSACTION NOTICE
EXHIBIT E
SERVICER'S SIDE LETTER
EXHIBIT F
FORM OF GOODBYE LETTER
EXHIBIT G
FORM OF WAREHOUSE LENDER'S RELEASE
EXHIBIT H
FORM OF SELLER'S RELEASE
EXHIBIT I
LIST OF INDEBTEDNESS
EXHIBIT J
FORM OF TRUSTEE INSTRUCTION LETTER
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<PAGE>
MASTER REPURCHASE AGREEMENT
Dated as of January 31, 2008
AMONG:
DB STRUCTURED PRODUCTS, INC. ("Buyer"),
-----
DEUTSCHE BANK SECURITIES INC. ("Agent")
-----
and
CHIMERA INVESTMENT CORP. ("Seller").
------
1.
APPLICABILITY
-------------
Buyer shall from time to time, upon the terms and conditions set
forth
herein, agree to enter into transactions in which Seller sells to
Buyer Eligible
Assets against the transfer of funds by Buyer, with a simultaneous
agreement by
Buyer, to transfer to Seller such Purchased Assets at a date
certain, against
the transfer of funds by Seller. Each such transaction shall be
referred to
herein as a "Transaction", and, unless otherwise agreed in writing,
shall be
-----------
governed by this Agreement.
2.
DEFINITIONS AND INTERPRETATION
------------------------------
(a) Defined Terms.
"30-Day Delinquent Loan" means a Loan that at any time since
----------------------
origination has been thirty (30) days or more Delinquent, but not
more than
fifty-nine (59) days Delinquent.
"Accepted Servicing Practices" means with respect to any Loan,
those
----------------------------
accepted, customary and prudent mortgage servicing practices
(including
collection procedures) of prudent mortgage banking institutions
which service
mortgage loans of the same type as the Loans in the jurisdiction
where the
related Mortgaged Property is located, and which are in accordance
with Fannie
Mae servicing practices and procedures for MBS pool mortgages, as
defined in the
Fannie Mae servicing guides including future updates.
"Acquisition Guidelines" means, with respect to a Loan, the
related
----------------------
Approved Originator's residential mortgage loan underwriting
guidelines in
effect as of the related Origination Date.
"Additional Purchased Assets" shall have the meaning assigned
thereto
---------------------------
in Section 6(a) hereof.
"Adjustable Rate Loan" means a Loan which provides for the
adjustment
--------------------
of the Mortgage Interest Rate payable in respect thereto.
"Adjusted Tangible Net Worth" means consolidated Net Worth,
less
---------------------------
goodwill, intangible assets, intercompany/interaffiliate
receivables (each
calculated in accordance with GAAP) and other items agreed to among
the parties.
"Adjustment Date" means with respect to each Adjustable Rate Loan,
the
---------------
date set forth in the related Note on which the Mortgage Interest
Rate on the
Loan is adjusted in accordance with the terms of the Note.
<PAGE>
"Affiliate" means, with respect to any specified Person, any
other
---------
Person controlling or controlled by or under common control with
such specified
Person. For the purposes of this definition, "control" means the
power to direct
the management and policies of such Person, directly or indirectly,
whether
through the ownership of voting securities, by contract or
otherwise and the
terms "controlling", "controlled by" and "under common control
with" have
meanings correlative to the meaning of "control". Notwithstanding
anything to
the contrary contained herein, the term "Affiliate" with respect to
Seller shall
not include Annaly Capital Management, Inc. or Fixed Income
Discount Advisory
Company ("FIDAC") or any fund managed or advised by FIDAC or any of
their
respective Affiliates, other than Seller.
"Agreement" means this Master Repurchase Agreement (including
all
---------
exhibits, schedules and other addenda thereto), as supplemented by
the Pricing
Side Letter, as it may be amended, further supplemented or
otherwise modified
from time to time.
"Alt-A Loan" means a Loan that satisfies the guidelines for such
loans
----------
set forth in the Acquisition Guidelines, or as otherwise determined
by Buyer in
its sole discretion.
"ALTA" means the American Land Title Association.
----
"Applicable Margin" shall have the meaning assigned thereto in
the
-----------------
Pricing Side Letter.
"Appraised Value" means the value set forth in an appraisal made
in
---------------
connection with the origination of the related Loan as the value of
the
Mortgaged Property.
"Approved Originator" means an mortgage loan originator that has
not
-------------------
been disapproved by Buyer.
"Asset" shall mean a Loan or Security, as the context may
require.
-----
"Asset Documents" shall mean (i) with respect to each Loan, the
---------------
documents comprising the related Mortgage File, and (ii) with
respect to each
Security, the documents comprising the related Security File.
"Asset File" shall mean, with respect to an Asset, the related
Mortgage
----------
File or Security File, as applicable.
"Assignment and Acceptance" shall have the meaning assigned thereto
in
-------------------------
Section 29(b).
"Assignment of Mortgage" means, 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.
"Balloon Loan" means, a Loan with a final Monthly Payment that
is
------------
significantly larger than the other scheduled Monthly Payments for
such Loan.
"Bankruptcy Code" shall have the meaning assigned thereto in
Section
---------------
35.
"Breakage Costs" shall have the meaning assigned thereto in
Section
--------------
3(d).
"Business Day" means any day other than (i) a Saturday or Sunday,
(ii)
------------
a day upon which the New York Stock Exchange or the Federal Reserve
Bank of New
York is closed or (iii) with respect to any day on which the
parties hereto have
obligations to the Custodian or on which the Custodian has
obligations to any
party hereto, a day upon which the Custodian's offices are
closed.
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<PAGE>
"Cash Equivalents" shall mean any of the following: (a)
marketable
----------------
direct obligations issued by, or unconditionally guaranteed by, the
United
States Government or issued by any agency thereof and backed by the
full faith
and credit of the United States, in each case maturing within one
(1) year from
the date of acquisition; (b) mortgage-backed securities issued or
guaranteed by
any agency of the United States Government with an implied rating
of AAA or with
an express rating of AAA by either Standard & Poor's Ratings
Services ("S&P") or
by Moody's Investors Service, Inc. ("Moody's"); (c) mortgage-backed
securities
issued by an entity other than an agency of the United States
Government rated
AAA by both S&P and Moody's; (d) certificates of deposit, time
deposits,
eurodollar time deposits or overnight bank deposits having
maturities of six (6)
months or less from the date of acquisition issued by any
commercial bank
organized under the laws of the United States or of any state
thereof having
combined capital and surplus of not less than $500,000,000; (e)
commercial paper
of an issuer rated at least A-1 by S&P or P-1 by Moody's, or
carrying an
equivalent rating by a nationally recognized rating agency, if both
of the two
named rating agencies cease publishing ratings of commercial paper
issuers
generally, and maturing within six months from the date of
acquisition; (f)
repurchase obligations of any commercial bank satisfying the
requirements of
clause (d) of this definition, having a term of not more than
thirty (30) days,
with respect to securities issued or fully guaranteed or insured by
the United
States government; (g) securities with maturities of one (1) year
or less from
the date of acquisition issued or fully guaranteed by any state,
commonwealth or
territory of the United States, by any political subdivision or
taxing authority
of any such state, commonwealth or territory or by any foreign
government, the
securities of which state, commonwealth, territory, political
subdivision,
taxing authority or foreign government (as the case may be) are
rated at least A
by S&P or A by Moody's; (h) securities with maturities of six
(6) months or less
from the date of acquisition backed by standby letters of credit
issued by any
commercial bank satisfying the requirements of clause (d) of this
definition; or
(i) shares of money market mutual or similar funds which invest
exclusively in
assets satisfying the requirements of clauses (a) through (h) of
this
definition.
"Change in Control" shall mean, with respect to Seller, the
acquisition
-----------------
by any other Person, or two or more other Persons acting in
concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and
Exchange Commission under the Securities Exchange Act of 1934) of
outstanding
shares of voting stock of Seller at any time if after giving effect
to such
acquisition such Person or Persons owns fifty percent (50%) or more
of such
outstanding voting stock.
"Change in Law" means
(a) the adoption of any law, rule or regulation
-------------
after the date of this Agreement, (b) any change in any law, rule
or regulation
or in the interpretation or application thereof by any Governmental
Authority
after the date of this Agreement or (c) compliance by Buyer (or any
Affiliate
thereof) with any request, guideline or directive (whether or not
having the
force of law) of any Governmental Authority made or issued after
the date of
this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from
----
time to time.
"Combined Loan-to-Value Ratio" or "CLTV" means with respect to
any
---------------------------- ----
Loan, the sum of the original principal balance of such Loan, at
the time of
origination and the outstanding principal balance of any other loan
which is
secured by a Lien on the related Mortgaged Property, as of the
Origination Date
of such Loan, divided by the lesser of (a) the Appraised Value of
the related
Mortgaged Property as of the Origination Date of such Loan, as
applicable, and
(b) if the related Mortgaged Property was purchased within twelve
(12) months of
the origination of such Loan, the purchase price of such Mortgaged
Property.
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<PAGE>
"Conforming Mortgage Loan" means a Loan which meets all criteria
of,
------------------------
and is eligible for sale to, Fannie Mae or Freddie Mac and which is
secured by a
first lien on the Mortgaged Property.
"Custodial Agreement" means the Custodial and Disbursement
Agreement,
-------------------
dated as of January 31, 2008, among Seller, Buyer and Custodian, as
the same may
be amended, modified or supplemented from time to time.
"Custodian" means Wells Fargo Bank, N.A., and its successors
and
---------
permitted assigns.
"DBSI" means Deutsche Bank Securities Inc., or any successor
thereto.
----
"Default" means any event that, with the giving of notice or
the
-------
passage of time or both, would constitute an Event of Default.
"Default Rate" means, as of any date of determination, the lesser
of
------------
(i) the Prime Rate plus two percent (2%) and (ii) the maximum rate
permitted by
applicable law. The Default Rate is calculated on the basis of a
360-day year
and the actual number of days elapsed between the date of Default
and the date
of determination.
"Delinquent" means, with respect to a Loan, that a Monthly Payment
due
----------
thereon is not made by the close of business on the Due Date.
"Dollars" or "$" means, unless otherwise expressly stated,
lawful
------- -
money of the United States of America.
"Due Date" means the day of the month on which the Monthly Payment
is
--------
due on a Loan, exclusive of any days of grace.
"Effective Date" shall mean the date set forth on the top of page 1
of
--------------
this Agreement.
"Electronic Tracking Agreement" means the electronic tracking
agreement
-----------------------------
in form and substance acceptable to Buyer, dated as of January 31,
2008 among
Buyer, Seller, MERSCORP, Inc. and Mortgage Electronic Registration,
Systems,
Inc., as the same may be amended, modified or supplemented from
time to time.
"Electronic Transmission" means 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).
"Eligible Assets" shall mean Eligible Loans and/or Eligible
Securities,
---------------
as the context may require.
"Eligible Loan" means any Loan that satisfies the criteria set
forth in
-------------
the definition of "Eligible Loan" in the Pricing Side Letter.
"Eligible Security" means any Security that satisfies the criteria
set
-----------------
forth in the definition of "Eligible Security" in the Pricing Side
Letter.
"ERISA" shall have the meaning assigned thereto in Section 22.
-----
"Escrow Payments" means the amounts constituting ground rents,
taxes,
---------------
assessments, water charges, sewer rents, mortgage insurance
premiums, fire and
hazard insurance premiums and other payments as may be required to
be escrowed
by the Mortgagor with the Mortgagee pursuant to the terms of any
Note or
Mortgage.
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<PAGE>
"Event of Default" shall have the meaning assigned thereto in
Section
----------------
19 hereof.
"Expiration Date" means January 29, 2010.
---------------
"Fannie Mae" means Fannie Mae, and its successors in interest.
----------
"FHA" means the Federal Housing Administration, an agency within
HUD,
---
or any successor thereto, and including the Federal Housing
Commissioner and the
Secretary of Housing and Urban Development where appropriate under
the FHA
regulations.
"FICO Score" means the credit score of the Mortgagor provided by
Fair,
----------
Isaac & Company, Inc. or such other organization providing
credit scores at the
time of the origination of a Loan.
"Foreign Buyer" shall have the meaning assigned thereto in
Section
-------------
8(d).
"Freddie Mac" means Freddie Mac, and its successors in
interest.
-----------
"GAAP" means generally accepted accounting principles in the
United
----
States of America in effect from time to time.
"Ginnie Mae" means Ginnie Mae and its successors in interest.
----------
"Governmental Authority" shall mean any nation or government, any
state
----------------------
or other political subdivision, agency or instrumentality thereof,
or any entity
exercising executive, legislative, judicial, regulatory or
administrative
functions of or pertaining to government and any court or
arbitrator having
jurisdiction over Seller.
"Gross Margin" means with respect to each Adjustable Rate Loan,
the
------------
fixed percentage amount set forth in the related Note and the
Seller Loan
Schedule that is added to the Index on each Adjustment Date in
accordance with
the terms of the related Note to determine the new Mortgage
Interest Rate for
such Loan.
"Hedge Instrument" means any interest rate cap agreement, interest
rate
----------------
floor agreement, interest rate swap agreement or other interest
rate hedging
agreement entered into by a Buyer pursuant to Section 20, or by
Seller with a
counterparty reasonably acceptable to Buyer, in each case with
respect to the
Purchased Loans.
"High Cost Loan" means a Loan that is (a) subject to, covered by or
in
--------------
violation of the provisions of the Homeownership and Equity
Protection Act of
1994, as amended, (b) a "high cost", "covered", "abusive",
"predatory" or "high
risk" mortgage loan under any federal, state or local law, or any
similarly
classified loan using different terminology under any law imposing
heightened
regulation, scrutiny or additional legal liability for residential
mortgage
loans having high interest rates, points and/or fees, or any other
state or
other regulation providing assignee liability to holders of such
mortgage loans,
(c) subject to or in violation of any such or comparable federal,
state or local
statutes or regulations, or (d) a "High Cost Loan" or "Covered
Loan," as
applicable, as such terms are defined in the current version of the
Standard &
Poor's LEVELS(R) Glossary Revised, Appendix E.
- 5 -
<PAGE>
"HUD" means the Department of Housing and Urban Development, or
any
---
federal agency or official thereof which may from time to time
succeed to the
functions thereof with regard to FHA mortgage insurance. The term
"HUD", for
purposes of this Agreement, is also deemed to include subdivisions
thereof such
as the FHA and Government National Mortgage Association.
"Income" means, with respect to any Purchased Asset at any time,
any
------
principal and/or interest thereon and all dividends, sale proceeds
(including,
without limitation, any proceeds from the securitization of any
Purchased Loan
or resecuritization of any Purchased Security or other disposition
thereof), all
other proceeds as defined in Section 9-102(64) of the Uniform
Commercial Code
and other collections and distributions thereon (including, without
limitation,
any proceeds received in respect of mortgage insurance), but not
including any
commitment fees, origination fees and/or servicing fees accrued in
respect of
periods on or after the initial Purchase Date with respect to such
Purchased
Asset or distributions thereon or other income or receipts
therefrom or in
respect thereof.
"Indebtedness" shall mean, for Seller: (a) all obligations for
borrowed
------------
money; (b) obligations 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 and
paid within
ninety (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 Seller, whether or not the respective
indebtedness so secured
has been assumed by Seller; (d) obligations (contingent or
otherwise) in respect
of letters of credit or similar instruments issued for account of
Seller; (e)
capital lease obligations; (f) obligations under repurchase
agreements or like
arrangements; (g) indebtedness of others guaranteed on a recourse
basis by
Seller; (h) all obligations incurred in connection with the
acquisition or
carrying of fixed assets; (i) indebtedness of general partnerships
of which
Seller, is a general partner; and (j) any other known or contingent
liabilities,
in each case, including non-recourse indebtedness.
"Indemnified Party"
shall have the meaning assigned thereto in Section
-----------------
23(b).
"Index" means with respect to each Adjustable Rate Loan, the
index
-----
identified on the related Seller Loan Schedule and set forth in the
related Note
for the purpose of calculating the interest rate thereon.
"Interest Only Loan" means a mortgage loan that provides for
interest
------------------
only monthly payments for a specified period of time.
"Investment Company
Act" means the Investment Company Act of 1940, as
----------------------
amended, including all rules and regulations promulgated
thereunder.
"Jumbo Loan" means a Loan other than a Conforming Mortgage Loan
with an
----------
original principal balance greater than the single-family mortgage
loan limit
determined by Fannie Mae, as amended from time to time, or as
otherwise
determined by Buyer in its sole discretion, and less than or equal
to
$2,000,000.
"LIBOR" shall have the meaning assigned thereto in the Pricing
Side
-----
Letter.
"Lien" shall mean any mortgage, deed of trust, lien, pledge,
charge,
----
security interest or similar encumbrance.
"Loan" means a first lien, fixed rate or adjustable rate,
residential
----
mortgage loan.
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<PAGE>
"Loan-to-Value Ratio" or "LTV" means, with respect to any Loan,
the
------------------- ---
ratio of the outstanding principal amount of such Loan at the time
of
origination to the lesser of (a) the Appraised Value of the related
Mortgaged
Property at origination of such Loan and (b) if the related
Mortgaged Property
was purchased within twelve (12) months of the origination of such
Loan, the
purchase price of the related Mortgaged Property.
"Loan Transaction Notice" means a written request of Seller to
enter
-----------------------
into a Transaction with respect to Loans, in a form attached as
Exhibit D-1
-----------
hereto or such other form as shall be mutually agreed upon among
Seller and
Buyer, which is delivered to the Buyer.
"Manufactured Home" means a prefabricated or manufactured home, a
lien
-----------------
on which secures a Loan and which is considered and treated as
"real property"
under applicable state law.
"Margin Call" shall have the meaning assigned thereto in Section
6(a)
-----------
hereof.
"Margin Deficit" shall have the meaning assigned thereto in
Section
--------------
6(a) hereof.
"Market Value" means (i) with respect to any Purchased Asset that
is an
------------
Eligible Asset, as of any date of determination, the value ascribed
thereto by
Buyer in its sole discretion as marked to market daily in Buyer's
sole
discretion (but in no event greater than the Market Value of such
Purchased
Asset on the related initial Purchase Date), and (ii) zero, with
respect to a
Purchased Asset that is not an Eligible Asset.
"Master Netting Agreement" shall mean the Master Netting
Agreement,
------------------------
dated as of January 31, 2008, among Buyer, Seller and certain
Affiliates and
Subsidiaries of Buyer and Seller, as the same may be amended,
supplemented or
otherwise modified from time to time.
"Master Servicer" shall mean Wells Fargo Bank, N.A.
---------------
"Material Adverse Change" means, with respect to a Person, any
material
-----------------------
adverse change in the business, condition (financial or otherwise),
operations,
performance, properties or prospects of such Person.
"Material Adverse Effect" means (a) a Material Adverse Change
with
-----------------------
respect to Seller or any of its Affiliates taken as a whole; (b) a
material
impairment of the ability of Seller or any of its Affiliates that
is a party to
any Program Document to perform under any Program Document and to
avoid any
Default or Event of Default; (c) a material adverse effect upon the
legality,
validity, binding effect or enforceability of any Program Document
against
Seller or any of its Affiliates that is a party to any Program
Document; or (d)
a material adverse effect upon the value or marketability of a
material portion
of the Purchased Assets.
"Maximum Aggregate Purchase Price" means Three Hundred Fifty
Million
--------------------------------
Dollars ($350,000,000) on a committed basis.
"MERS" shall have the meaning assigned thereto in the Custodial
----
Agreement.
"MERS Designated Mortgage Loan" shall have the meaning assigned
thereto
-----------------------------
in the Custodial Agreement.
"MERS Identification Number" shall have the meaning assigned
thereto in
--------------------------
the Custodial Agreement.
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<PAGE>
"Monthly Payment"
means, with respect to any Loan, the scheduled
---------------
combined payment of principal and/or interest payable by a
Mortgagor under the
related Note on each Due Date.
"Mortgage" means a mortgage, deed of trust, or other instrument
that
--------
creates a Lien on the related Mortgaged Property and secures a
Note.
"Mortgage File" shall have the meaning assigned thereto in the
-------------
Custodial Agreement.
"Mortgage Interest Rate" means, with respect to each Loan, the
annual
----------------------
rate at which interest accrues on such Loan from time to time in
accordance with
the provisions of the related Note.
"Mortgage Loan Documents" shall have the meaning assigned thereto
in
-----------------------
the Custodial Agreement.
"Mortgaged Property" means, with respect to a Loan, the related
------------------
Mortgagor's fee interest in real property or leasehold interest in
real property
improved by a Residential Dwelling and all other collateral
securing repayment
of the debt evidenced by the related Note.
"Mortgagee" means the record holder of a Note secured by a
Mortgage.
---------
"Mortgagor" means the obligor or obligors on a Note, including
any
---------
person who has assumed or guaranteed the obligations of the obligor
thereunder.
"MV Margin Amount" means, with respect to any Transaction, as of
any
----------------
date of determination, the product of the MV Margin Percentage and
the
Repurchase Price for such Transaction as of such date.
"MV Margin Percentage" shall have the meaning assigned thereto in
the
--------------------
Pricing Side Letter.
"Negative Amortization" shall mean the portion of interest accrued
at
---------------------
the Mortgage Interest Rate in any month which exceeds the Monthly
Payment on the
related Loan for such month and which, pursuant to the terms of the
Note, is
added to the principal balance of the Loan.
"Net Worth" shall mean, with respect to Seller, as of any date
of
---------
determination, the excess of Seller's total assets, over Seller's
total
liabilities, determined in accordance with GAAP.
"Note" means, with respect to any Loan, the related promissory
note
----
together with all riders and amendments thereto and other evidence
of
indebtedness of the related Mortgagor.
"Notice Date" shall have the meaning assigned thereto in Section
3(a)
-----------
hereof.
"Obligations" means (a) all of Seller's obligation to pay the
-----------
Repurchase Price on the Repurchase Date and other obligations and
liabilities of
Seller to Buyer, its Affiliates, Custodian or any other Person
arising under, or
in connection with, the Program Documents or directly related to
the Purchased
Assets, whether now existing or hereafter arising; (b) any and all
sums paid by
Buyer or on behalf of Buyer pursuant to the Program Documents in
order to
preserve any Purchased Asset or its interest therein; (c) in the
event of any
proceeding for the collection or enforcement of any of Seller's
indebtedness,
obligations or liabilities referred to in clause (a), the
reasonable expenses of
retaking, holding, collecting, preparing for sale, selling or
otherwise
disposing of or realizing on any Purchased Asset, or of any
exercise by Buyer or
any such Affiliate thereof of their rights under the Program
Documents,
including without limitation, reasonable attorneys' fees and
disbursements and
court costs; and (d) all of Seller's indemnity obligations to Buyer
pursuant to
the Program Documents.
- 8 -
<PAGE>
"Origination Date"
shall mean the date on which a Loan was originated
----------------
by the related originator.
"Other Taxes" shall have the meaning assigned thereto in Section
8(b).
-----------
"Par Margin Amount" means, with respect to any Transaction, as of
any
-----------------
date of determination, the amount obtained by application of the
Par Margin
Percentage to the Repurchase Price for such Transaction as of such
date.
"Par Margin Percentage" shall have the meaning assigned thereto in
the
---------------------
Pricing Side Letter.
"Person" means any legal person, including any individual,
corporation,
------
partnership, association, joint stock company, trust, limited
liability company,
unincorporated organization, governmental entity or other entity of
similar
nature.
"Pooling Agreement" shall mean a pooling and servicing
agreements,
-----------------
indentures or similar document pursuant to which a Security is
issued. Each such
Pooling Agreement shall include all manuals and guides incorporated
therein by
reference, and shall be certified by Seller or the related Trustee
as a true,
correct and complete copy of the original.
"Price Differential" means, with respect to each Transaction as of
any
------------------
date of determination, the aggregate amount obtained by daily
application of the
Pricing Rate (or during the continuation of an Event of Default, by
daily
application of the Default Rate) for such Transaction to the
Purchase Price for
such Transaction on a 360-day-per-year basis for the actual number
of days
elapsed during the period commencing on (and including) the
Purchase Date and
ending on (but excluding) the Repurchase Date (reduced by any
amount of such
Price Differential in respect of such period previously paid by
Seller to Buyer
with respect to such Transaction).
"Pricing Rate" means the per annum percentage rate for
determination of
------------
the Price Differential as set forth in the Pricing Side Letter.
"Pricing Side Letter" means the pricing side letter, dated as
of
-------------------
January 31, 2008, among Seller, Agent and Buyer, as the same may be
amended,
supplemented or modified from time to time.
"Prime Rate" means the daily prime loan rate as reported in The
Wall
----------
Street Journal or if more than one rate is published, the highest
of such rates.
"Program Documents" means this Agreement, the Custodial Agreement,
the
-----------------
Master Netting Agreement, any Servicing Agreement, all Servicer's
Side Letters,
any assignment of Hedge Instrument, the Pricing Side Letter, the
Electronic
Tracking Agreement, if any, and any other agreement entered into by
Seller
and/or any Servicer, on the one hand, and Buyer or one of its
Affiliates (or
Custodian on its behalf) on the other, in connection herewith or
therewith.
"Property" means any right or interest in or to property of any
kind
--------
whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Date" means, with respect to each Transaction, the date
on
-------------
which Purchased Assets are sold by Seller to the related Buyer
hereunder.
"Purchase Price" shall have the meaning assigned thereto in the
Pricing
--------------
Side Letter.
- 9 -
<PAGE>
"Purchased Assets" means all of the following assets sold by Seller
to
----------------
Buyer in a Transaction, whether now existing or hereafter acquired:
(i) the
Assets, (ii) the related Records and all rights of Seller to
receive from any
third party or to take delivery of any Records or other documents
which
constitute a part of the Mortgage File, Security File or Servicing
File, (iii)
with respect to all Servicing Released Loans, all related Servicing
Rights, (iv)
Seller's rights under any related Hedge Instruments, (v) Seller's
rights under
any takeout commitment related to the Assets, (vi) such other
property, rights,
titles or interest as are specified on a related Transaction
Notice, (vii) all
mortgage guarantees and insurance relating to such Assets (issued
by
governmental agencies or otherwise) or the related Mortgaged
Property and any
mortgage insurance certificate or other document evidencing such
mortgage
guarantees or insurance and all claims and payments thereunder,
(viii) all
guarantees or other support for such Assets, (ix) all rights to
Income and the
rights to enforce such payments arising from any of the Assets and
any other
contract rights, payments, rights to payment (including payments of
interest or
finance charges) with respect to the Assets, (x) all "accounts",
"deposit
accounts" and "securities accounts", each as defined in the Uniform
Commercial
Code, relating to or constituting any or all of the foregoing, (xi)
all
instruments, chattel paper, securities, investment property and
general
intangibles and other assets comprising or relating to the Assets,
(xii) any
purchase agreements or other agreements or contracts relating to or
constituting
any or all of the foregoing, (xiii) any other collateral pledged or
otherwise
relating to such Purchased Loans, together with all files, material
documents,
instruments, surveys (if available), certificates, correspondence,
appraisals,
computer records, computer storage media, Loan accounting records
and other
books and records relating thereto, and (xiv) any and all
replacements,
substitutions, distributions on, or proceeds with respect to, any
of the
foregoing. The term "Purchased Assets" with respect to any
Transaction at any
time also shall include Additional Purchased Assets delivered
pursuant to
Section 6(a) hereof and Substitute Assets delivered pursuant to
Section 17
hereof. For the avoidance of doubt, with respect to any Servicing
Retained Loan,
the term "Purchased Assets" shall not include Servicing Rights.
"Purchased Loan" shall mean a Purchased Asset that is a Loan.
--------------
"Purchased Security" shall mean a Purchased Asset that is a
Security.
------------------
"Reacquired Assets" shall have the meaning assigned thereto in
Section
-----------------
17.
"Records" means all instruments, agreements and other books,
records,
-------
and reports and data generated by other media for the storage of
information
maintained by Seller or any other person or entity with respect to
a Purchased
Asset. Records shall include, without limitation, the Notes, any
Mortgages, the
Mortgage Files, the Servicing Files, and any other instruments
necessary to
document or service an Asset that is a Purchased Asset, including,
without
limitation, the complete payment and modification history of each
Asset that is
a Purchased Asset.
"Recourse Indebtedness" means, for any date of determination, for
any
---------------------
Person the aggregate of Indebtedness of such Person on a
consolidated basis
during such period maintained in accordance with GAAP; provided,
however, that
for any period, the aggregate Indebtedness of such Person during
such period
maintained in accordance with GAAP shall be calculated less the
aggregate amount
of any such Indebtedness that is reflected on the balance sheet of
such Person
in respect of obligations incurred pursuant to a securitization
transaction or
other long term non-recourse lending transaction which utilizes a
bankruptcy
remote special purpose entity, solely to the extent such
obligations are secured
by the assets subject to such transaction and are non recourse to
such Person.
"REIT" shall mean a real estate investment trust, as defined in
Section
----
856 of the Code.
- 10 -
<PAGE>
"Relevant System" shall mean (i) The Depository Trust Company in
New
---------------
York, New York or (ii) such other clearing organization or book
entry system as
is designated in writing by Buyer.
"Repurchase Date" means the earlier of (i) the 15th day of each
month,
---------------
or a day of the month as agreed between Buyer and Seller (or if
such day is not
a Business Day, the next succeeding Business Day), (ii) the
Termination Date as
set forth in Section 3(c) hereof, or (iii) the date on which Seller
tenders the
Repurchase Price for Purchased Assets, as applicable.
"Repurchase Price" means the price at which Purchased Assets are to
be
----------------
transferred from Buyer to Seller upon termination of a Transaction,
which will
be determined in each case (including Transactions terminable upon
demand) as
the sum of: (i) any portion of the Purchase Price not yet repaid to
Buyer, (ii)
the Price Differential, and (iii) any accrued and unpaid fees or
expenses or
indemnity amounts owing under the Program Documents from Seller to
Buyer.
"Requirement of Law" means as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing
documents of such
Person, and any law, treaty, rule or regulation or determination of
an
arbitrator or a court or other Governmental Authority, in each case
applicable
to or binding upon such Person or any of its property or to which
such Person or
any of its property is subject.
"Residential Dwelling" means any one of the following: (i) a
detached
--------------------
single family dwelling, (ii) a two-to-four family dwelling, (iii) a
one-family
dwelling unit in a Fannie Mae eligible condominium project, (iv) a
townhouse, or
(v) a detached single family dwelling in a planned unit development
none of
which is a co-operative or commercial property. Mortgaged
Properties that
consist of the following property types are not Residential
Dwellings: (a) mixed
use properties, (b) log homes, (c) earthen homes, (d) underground
homes, (e)
Manufactured Homes, (f) mobile homes or manufactured housing units
not secured
by real property, (g) any dwelling situated on more than ten acres
of property
and (h) any dwelling situated on a leasehold estate.
"SEC" shall have the meaning ascribed thereto in Section 37.
---
"Security" shall mean a publicly or privately issued
mortgage-backed
--------
security that is either rated investment grade or non-investment
grade and that
the Buyer can value using Buyer's customary valuation models.
"Security Agreement" means, with respect to any Loan, any
contract,
------------------
instrument or other document related to security for repayment
thereof (other
than the related Mortgage and Note), executed by the Mortgagor
and/or others in
connection with such 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.
"Security File" shall mean, with respect to any Purchased Asset
that is
-------------
a Security: (A) a copy of the executed Pooling Agreements governing
such
Security and/or any supplements thereto, and the offering documents
related to
such Security, each certified by the Seller as a true, correct and
complete copy
of the original, and all ancillary documents required to be
delivered to the
certificateholders under the Pooling Agreements, (B) an officer's
certificate as
may be requested by Buyer, (C) opinions of counsel in form and
substance
reasonably satisfactory to the Buyer, (D) the Security in
accordance with
Section 10(b), (E) a Trustee Instruction Letter executed by the
Sellers, (F) if
such Security is in uncertificated form, evidence that such
Security has been
registered in the name of the Agent or the Buyer on the books of
the issuer
itself or its transfer agent, (G) all related Transfer Documents,
(H) copies of
distribution statements delivered to the Agent for two months prior
to the month
in which the related Purchase Date occurs, if any,
- 11 -
<PAGE>
(I) any other documents or instruments necessary in the reasonable
opinion of
the Buyer to effect and perfect a legally valid transfer of the
relevant
interest granted therein to the Buyer under the Program Documents,
(J) any other
documents required under Section 10(b).
"Security Transaction Notice" means a written request of Seller
to
---------------------------
enter into a Transaction with respect to Securities, in a form
attached as
Exhibit D-2 hereto or such other form as shall be mutually agreed
upon among
-----------
Seller and Buyer, which is delivered to the Agent with a copy to
Buyer.
"Seller Asset Schedule" means the list of Purchased Assets or
Assets
---------------------
proposed to be purchased delivered by Seller to Buyer and Custodian
together
with each Transaction Notice and attached by the Custodian to the
related Trust
Receipt. Each Seller Asset Schedule shall set forth the information
set forth on
Annex 1 or Annex-1-A to the Custodial Agreement, or such other
information as
-------
---------
may be required by Buyer.
"Seller's Release" shall mean a letter, in the form of Exhibit H,
from
----------------
the Seller to Buyer, unconditionally releasing all of such Seller's
right, title
and interest in certain Assets identified therein upon receipt of
the related
Purchase Price.
"Servicer" means, with respect to Servicing Released Loans, the
--------
servicers listed on Schedule 1 attached hereto, and with respect to
the
Servicing Retained Loans, the servicers listed on Schedule 2
attached hereto,
and any successor thereto, or any other servicer mutually
acceptable to Buyer
and Seller. Seller shall have the right to amend Schedule 1 and
Schedule 2 from
time to time to add or remove servicers; provided that Buyer shall
be entitled
to disapprove any servicer added to such Schedule, and any such
disapproved
servicer shall not be deemed a "Servicer" hereunder.
"Servicing Agreement" means any agreement (other than the
Custodial
-------------------
Agreement) giving rise or relating to Servicing Rights with respect
to a
Purchased Loan, including any assignment or other agreement
relating to such
agreement.
"Servicing Released Loan" means a Purchased Loan with respect to
which
-----------------------
the related Servicing Rights were sold to Seller and subsequently
purchased by
Buyer on the related Purchase Date.
"Servicing Retained Loan" means Purchased Loan with respect to
which
-----------------------
the related Servicing Rights were retained by a third party
Servicer upon the
sale of such Loan to Seller and subsequent sale to Buyer on the
related Purchase
Date.
"Servicer's Side Letter" means each side letter agreement to be
entered
----------------------
into among Buyer, Seller and the related Servicer, in a form
attached hereto as
Exhibit E.
"Servicing File" means with respect to each Loan, the file retained
by
--------------
Seller consisting of all documents that a prudent originator and
servicer would
include, including copies of the Mortgage Loan Documents, all
documents
necessary to document and service the Loans and any and all
documents required
to be delivered pursuant to any of the Program Documents.
"Servicing Rights" means contractual, possessory or other rights
of
----------------
Seller or any other Person, whether arising under a Servicing
Agreement or
otherwise, to administer or service a Purchased Loan or to possess
the Servicing
File.
"Subsidiary" means, with respect to any Person, any
corporation,
----------
partnership or other entity of which at least a majority of the
securities or
other ownership interests having by the terms thereof ordinary
voting power to
elect a majority of the board of directors or other persons
performing similar
functions of such corporation, partnership or other entity
(irrespective of
whether or not, at the time, securities or other ownership
interests of any
other class or classes of such corporation, partnership or other
entity shall
have or might have voting power by reason of the happening of any
contingency)
- 12 -
<PAGE>
are at the time directly or indirectly owned or controlled by such
Person or one
or more Subsidiaries of such Person or by such Person and one or
more
Subsidiaries of such Person.
"Substitute Assets" has the meaning assigned thereto in Section
17.
-----------------
"Taxes" shall have the meaning assigned thereto in Section
8(a).
-----
"Termination Date" means the earlier of (i) the Expiration Date,
(ii)
----------------
at Buyer' option, upon the occurrence of an Event of Default,
(iii)the
occurrence of a Termination Event that is not otherwise waived by
Buyer, or (iv)
at Buyer's option upon the occurrence of the events set forth in
Section 16(c)
or 25(b).
"Termination Event" has the meaning assigned thereto in Section
15.
-----------------
"Transaction" has the meaning assigned thereto in Section 1.
-----------
"Transaction Notice" means a Loan Transaction Notice or
Securities
------------------
Transaction Notice, as the case may be.
"Transfer Documents" shall mean all documents required to
re-register
------------------
Securities in the name of the Agent or the Buyer, as applicable, or
otherwise to
effect a delivery thereof in accordance with Section 3(b) hereof,
including
without limitation, with respect to certificated securities, the
original
certificate.
"Trust" means any trust formed for the purpose of issuing
securities
-----
backed by mortgage loans.
"Trust Receipt" shall have the meaning assigned thereto in the
-------------
Custodial Agreement.
"Trustee" shall mean any trustee or paying agent or other
Person
-------
responsible for the distribution of funds under a Pooling
Agreement.
"Trustee Instruction Letter" shall mean the applicable letter
agreement
--------------------------
between Seller and each Trustee substantially in the form of
Exhibit J, attached
---------
hereto, in which such Persons acknowledge the Buyer's ownership
interest in the
Purchased Assets that are Securities and agree to remit any Income
received by
it with respect to such Purchased Assets as Buyer may so direct
from time to
time, which Trustee Instruction Letter shall be delivered to Buyer
pursuant to
Section 10(b).
"Uniform Commercial Code" means the Uniform Commercial Code as
in
-----------------------
effect on the date hereof in the State of New York or the Uniform
Commercial
Code as in effect in the applicable jurisdiction.
"Unrestricted Cash" means cash and Cash Equivalents that are
not
-----------------
subject to a Lien in favor of any Person or that are not required
to be
maintained by Seller pursuant to a contractual agreement or
requirement of law.
"Warehouse Lender" shall mean any lender providing financing to
Seller
----------------
for the purpose of warehousing, originating or purchasing the
Asset, which
lender has a security interest in such Asset to be purchased by
Buyer.
- 13 -
<PAGE>
"Warehouse Lender's Release" shall mean a letter, in the form
of
--------------------------
Exhibit G, from a Warehouse Lender to Buyer, unconditionally
releasing all of
---------
Warehouse Lender's right, title and interest in certain Assets
identified
therein upon payment to the Warehouse Lender.
(b) Capitalized
terms used but not defined in this Agreement shall
have the meanings assigned thereto in the Custodial Agreement.
(c)
Interpretation.
--------------
Headings are for convenience only and do not affect
interpretation. The following rules of this subsection (c) apply
unless the
context requires otherwise. The singular includes the plural and
conversely. A
gender includes all genders. Where a word or phrase is defined, its
other
grammatical forms have a corresponding meaning. A reference to a
subsection,
Section, Annex or Exhibit is, unless otherwise specified, a
reference to a
section of, or annex or exhibit to, this Agreement. A reference to
a party to
this Agreement or another agreement or document includes the
party's successors
and permitted substitutes or assigns. A reference to an agreement
or document is
to the agreement or document as amended, modified, novated,
supplemented or
replaced, except to the extent prohibited by any Program Document.
A reference
to legislation or to a provision of legislation includes any
modification or
re-enactment of it, a legislative provision substituted for it and
a regulation
or statutory instrument issued under it. A reference to writing
includes a
facsimile transmission and any means of reproducing words in a
tangible and
permanently visible form. A reference to conduct includes, without
limitation,
an omission, statement or undertaking, whether or not in writing.
An Event of
Default exists until it has been waived in writing by Buyer or has
been timely
cured. The words "hereof", "herein", "hereunder" and similar words
refer to this
Agreement as a whole and not to any particular provision of this
Agreement. The
term "including" is not limiting and means "including without
limitation". In
the computation of periods of time from a specified date to a later
specified
date, the word "from" means "from and including", the words "to"
and "until"
each mean "to but excluding", and the word "through" means "to and
including".
This Agreement may use several different limitations, tests or
measurements to
regulate the same or similar matters. All such limitations, tests
and
measurements are cumulative and shall each be performed in
accordance with their
terms. Unless the context otherwise clearly requires, all
accounting terms not
expressly defined herein shall be construed, and all financial
computations
required under this Agreement shall be made, in accordance with
GAAP,
consistently applied. References herein to "fiscal year" and
"fiscal quarter"
refer to such fiscal periods of Seller.
Except where otherwise provided in this Agreement, any
determination, consent, approval, statement or certificate made or
confirmed in
writing with notice to Seller by Buyer or an authorized officer of
Buyer as
required by this Agreement is conclusive and binds the parties in
the absence of
manifest error. A reference to an agreement includes a security
interest,
guarantee, agreement or legally enforceable arrangement whether or
not in
writing related to such agreement.
A reference to a document includes an agreement (as so
defined) in writing or a certificate, notice, instrument or
document, or any
information recorded in electronic form. Where Seller is required
to provide any
document to Buyer under the terms of this Agreement, the relevant
document shall
be provided in writing or printed form unless Buyer requests
otherwise. At the
request of Buyer, the document shall be provided in electronic form
or both
printed and computer disk form.
This Agreement is the result of negotiations among, and has
been reviewed by counsel to, Buyer and Seller, and is the product
of all
parties. In the interpretation of this Agreement, no rule of
construction shall
apply to disadvantage one party on the ground that such party
proposed or was
involved in the preparation of any particular provision of this
Agreement or
this Agreement itself. Except where otherwise expressly stated,
Buyer may give
or withhold, or give conditionally, approvals and consents and may
form opinions
and make determinations in its absolute sole discretion.
- 14 -
<PAGE>
Except as specifically required herein, any requirement of good
faith,
discretion or judgment by Buyer shall not be construed to require
Buyer to
request or await receipt of information or documentation not
immediately
available from or with respect to Seller, a servicer of the
Purchased Loans, any
other Person or the Purchased Assets themselves.
3. THE TRANSACTIONS
----------------
(a) Subject to the
terms and conditions of the Program Documents, Buyer
may enter into Transactions with an aggregate Purchase Price for
all Purchased
Assets acquired by Buyer and sold by Seller not to exceed the
Maximum Aggregate
Purchase Price. With respect to the purchase of any Assets, Seller
shall
deliver, no later than 11:00 a.m. (New York City time) two (2)
Business Days
prior to the proposed Purchase Date (the date on which such notice
is so given,
the "Notice Date", provided that if such notice is given after
11:00 a.m. (New
York City time), the Notice Date shall be deemed to be the next
succeeding
Business Day and the proposed Purchase Date shall be no earlier
than three (3)
Business Days after the date such notice is given), the following:
(i) a
Transaction Notice to Buyer, (ii) a Seller Asset Schedule in a
format acceptable
to Buyer and Custodian, and (iii) the Asset File to Agent (in the
case of
Securities) or Custodian (in the case of Loans) for each Asset
subject to such
Transaction.
(b) With respect to
Securities, the Seller shall deliver the Securities
to the Agent no later than 11:00 a.m. (New York City time) two (2)
Business Days
prior to the proposed Purchase Date as follows:
(i) with
respect to Securities delivered or held in definitive,
certificated
form, the Sellers shall deliver to the Agent, original,
definitive
certificate representing ownership of such Purchased Securities
in form suitable
for transfer, with accompanying, duly executed instruments
of transfer or
appropriate instruments of assignment in the name of the
Agent as agent
for the benefit of the Buyer (or as the Buyer may otherwise
determine in its
sole discretion), transfer tax stamps, and any other
documents or
instruments necessary in the reasonable opinion of the Buyer
to effect and
perfect a legally valid delivery of such security or other
item of
investment property to the Buyer.
(ii)
With respect to Securities delivered through a Relevant
System in
book-entry form and credited to or otherwise held in an
account,
the Seller shall
provide written instructions to the relevant financial
institution or
other entity, and a copy thereof to the Agent, sufficient if
complied with to
effect and perfect a legally valid delivery of the
relevant
interest granted therein to Buyer hereunder. The Seller shall
cause the
registration of such Securities or other items of investment
property in the
name of the Agent. In connection with any account to which
the Securities
are credited or otherwise held, the Seller shall execute and
deliver such
other and further documents or instruments necessary, in the
reasonable
opinion of the Buyer, to effect and perfect a legally valid
delivery of the
relevant interest granted therein to Buyer hereunder. Any
account to which
the Securities are credited or otherwise shall be
designated "DB
Structured Products, Inc. Account" or such variation thereon
as the Buyer may
direct.
(c) Upon Seller's
request to enter into a Transaction pursuant to
Section 3(a), DBSP shall, assuming all conditions precedent set
forth in this
Section 3 and in Sections 10(a) and (b) have been met, and provided
no Default
or Event of Default shall have occurred and be continuing, on the
requested
Purchase Date purchase the Eligible Assets included in the related
Transaction
Notice by transferring, via wire transfer (pursuant to wire
transfer
instructions provided by Seller on or prior to such Purchase Date),
the Purchase
Price. Seller acknowledges and agrees that the Purchase Price paid
in connection
with any Servicing Released Loan that is purchased in any
Transaction includes a
mutually negotiated premium allocable to the portion of such
Purchased Loan that
constitutes the related Servicing Rights.
- 15 -
<PAGE>
(d) On each
Repurchase Date with respect to a Transaction, Seller shall
remit the Repurchase Price to Buyer (together with any other
Obligations then
due and payable) and shall repurchase all Purchased Assets subject
to such
Transaction. Each obligation to repurchase exists without regard to
any prior or
intervening liquidation or foreclosure with respect to any
Purchased Asset.
Seller is obligated to obtain such Purchased Assets from Buyer or
its designee
(including the Custodian) at Seller's expense on (or after) the
related
Repurchase Date. Provided that the applicable conditions in
Sections 10(a) and
(b) have been satisfied, each Purchased Asset that is repurchased
by Seller on
the related Repurchase Date shall automatically roll forward into a
new
Transaction (each such forward roll, a "Roll"), unless (i) Buyer in
its sole
discretion otherwise notify Seller at least one (1) Business Day
prior to any
such Repurchase Date (provided that no such notice shall be
required if a
Default or an Event of Default shall have occurred and is
continuing) or (ii)
Seller otherwise notifies Buyer at least one (1) Business Day prior
to any such
Repurchase Date, and if such Purchased Asset shall not be subject
to a Roll,
Seller shall remit to Buyer the entire Repurchase Price for such
Purchased
Asset. It is hereby understood that if a Purchased Asset becomes
subject to a
Roll on a Repurchase Date (such date, a "Roll Date"), (i) such Roll
Date will be
the Purchase Date for the new Transaction, (ii) if the Repurchase
Date for such
new Transaction is later than the Termination Date, the Repurchase
Date for such
new Transaction shall automatically be the Termination Date, and
the provisions
of this Section 3(d) as they might relate to such new Transaction
shall expire
on the Termination Date, (iii) Seller will be deemed to have
remitted the
Repurchase Price to Buyer on such Roll Date, and (iv) Buyer will be
deemed to
have remitted the related Purchase Price to Seller on such Roll
Date; provided,
however, in such case, Seller shall be obligated to remit the
related Price
Differential (together with any other Obligations then due and
payable) to Buyer
in immediately available funds on such Roll Date.
(e) If Seller
repurchases Purchased Assets on any day which is not a
Repurchase Date for such Purchased Assets or if Seller fails to
give one (1)
Business Day written notice prior to repurchasing related Purchased
Assets on a
Repurchase Date for such Purchased Assets, Seller shall indemnify
the related
Buyer and hold such Buyer harmless from any losses, costs and/or
expenses which
such Buyer may sustain or incur arising from the reemployment of
funds obtained
by such Buyer hereunder or from fees payable to terminate the
deposits from
which such funds were obtained ("Breakage Costs"), in each case for
the
remainder of the applicable 30-day period. Such Buyer shall deliver
to Seller a
statement setting forth the amount and basis of determination of
any Breakage
Costs in such detail as determined in good faith by such Buyer to
be adequate,
it being agreed that such statement and the method of its
calculation shall be
adequate and shall be conclusive and binding upon Seller, absent
manifest error.
The provisions of this Section 3(e) shall survive termination of
this Agreement.
4. CONFIRMATION.
-------------
In the event
that parties hereto desire to enter into a Transaction on
terms other than as set forth in this Agreement (as amended by the
Pricing Side
Letter), the parties shall execute a "Confirmation" specifying such
terms prior
to entering into such Transaction, including, without limitation,
the Purchase
Date, the Purchase Price, the Pricing Rate therefor and the
Repurchase Date. Any
such Confirmation and the related Transaction Notice, together with
this
Agreement, shall constitute conclusive evidence of the terms agreed
to between
Buyer and Seller with respect to the Transaction to which the
Confirmation
relates. In the event of any conflict between this Agreement and a
Confirmation,
the terms of the Confirmation shall control with respect to the
related
Transaction.
5. PAYMENT AND TRANSFER
--------------------
Unless otherwise
agreed, all transfers of funds hereunder shall be in
immediately available funds and all Purchased Loans transferred
shall be
transferred to the Custodian pursuant to the Custodial
Agreement.
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<PAGE>
Any Repurchase Price or Price Differential received by Buyer after
5:00 p.m.
(New York City time) shall be applied on the next succeeding
Business Day.
6. MARGIN MAINTENANCE
------------------
(a) If at any time
either (i) the aggregate Market Value of all Purchased
Assets subject to all Transactions is less than the aggregate MV
Margin Amount
for all such Transactions, or (ii) the aggregate unpaid principal
balance of the
Purchased Assets for all Transactions is less than the aggregate
Par Margin
Amount for all such Transactions (either such event, a "Margin
Deficit"), then
Buyer may, by notice to Seller, require Seller to transfer to Buyer
cash or, at
Buyer's option (and provided Seller has additional Eligible
Assets), additional
Eligible Assets ("Additional Purchased Assets") within one (1)
Business Day of
such notice by such Buyer, so that both (x) the cash and aggregate
Market Value
of such Purchased Assets, including any such Additional Purchased
Assets, will
thereupon equal or exceed such aggregate MV Margin Amount, and (y)
the cash and
unpaid principal balance of such Purchased Assets, including any
such Additional
Purchased Assets and any Purchased Assets, will thereupon equal or
exceed such
aggregate Par Margin Amount (either such requirement, a "Margin
Call"). Any cash
transferred by Seller in satisfaction of any such Margin Call shall
be deposited
into the account designated by Buyer.
(b) Notice required
pursuant to Section 6(a) may be given by any means
provided in Section 36 hereof. Any notice given on a Business Day
shall be met,
and the related Margin Call satisfied, no later than 1:00 p.m. (New
York City
time) on the following Business Day. The failure of any Buyer, on
any one or
more occasions, to exercise its rights hereunder, shall not change
or alter the
terms and conditions to which this Agreement is subject or limit
the right of
such Buyer to do so at a later date. Seller and Buyer each agree
that a failure
or delay by a Buyer to exercise its rights hereunder shall not
limit or waive
Buyer's rights under this Agreement or otherwise existing by law or
in any way
create additional rights for Seller.
7. INCOME PAYMENTS
---------------
(a) Where a
particular term of a Transaction extends over the date on
which Income is paid in respect of any Purchased Asset subject to
that
Transaction, (i) Seller shall deposit or cause to be deposited such
Income into
an account designated by Buyer pursuant to Section 14(u) hereof no
later than
one (1) Business Day after receipt thereof, and (ii) such Income
shall be the
property of Buyer subject to Sections 7(b) and (c).
(b) With respect to
each Transaction referenced in Section 7(a), Buyer
shall, on the related Repurchase Date, either (i) cause the
transfer to Seller
of all such Income held with respect to the Purchased Assets
subject to such
Transaction, or (ii) if a Margin Deficit then exists, apply the
Income to reduce
the amount, if any, to be transferred to Buyer by Seller upon
termination of
such Transaction.
(c) Notwithstanding
anything herein to the contrary, Buyer shall not be
obligated to take any action pursuant to Section 7(b)(i), (i) to
the extent that
such action would result in the creation of a Margin Deficit,
unless prior
thereto or simultaneously therewith Seller transfers to Buyer cash
or Additional
Purchased Assets sufficient to eliminate such Margin Deficit, or
(ii) if a
Default or Event of Default is then continuing.
8. TAXES; TAX TREATMENT
--------------------
(a) All payments
made by Seller under this Agreement shall be made free
and clear of, and without deduction or withholding for or on
account of, any
present or future taxes, levies, imposts, deductions, charges or
withholdings,
and all liabilities (including penalties, interest and additions to
tax) with
respect thereto imposed by any Governmental Authority therewith or
thereon,
excluding income taxes, branch profits taxes, franchise taxes or
any other tax
imposed on net income by the United States, a state or a foreign
jurisdiction
under the laws of which the applicable Buyer is organized or of its
applicable
lending office, or any political subdivision thereof (collectively,
"Taxes"),
all of which shall be paid by Seller for its own account not later
than the date
when due.
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<PAGE>
If Seller is required by law or regulation to deduct or withhold
any Taxes
from or in respect of any amount payable hereunder, it shall: (a)
make such
deduction or withholding, (b) pay the amount so deducted or
withheld to the
appropriate Governmental Authority not later than the date when
due, (c) deliver
to the applicable Buyer, promptly, original tax receipts and other
evidence
satisfactory to Buyer of the payment when due of the full amount of
such Taxes;
and (d) pay to the applicable Buyer such additional amounts as may
be necessary
so that such Buyer receives, free and clear of all Taxes, a net
amount equal to
the amount it would have received under this Agreement, as if no
such deduction
or withholding had been made.
(b) In addition,
Seller agrees to pay to the relevant Governmental
Authority in accordance with applicable law any current or future
stamp or
documentary taxes or any other excise or property taxes, charges or
similar
levies (including, without limitation, mortgage recording taxes,
transfer taxes
and similar fees) imposed by the United States or any taxing
authority thereof
or therein that arise from any payment made hereunder or from the
execution,
delivery or registration of, or otherwise with respect to, this
Agreement
("Other Taxes").
(c) Seller agrees to
indemnify Buyer for the full amount of Taxes
(including additional amounts with respect thereto) and Other
Taxes, and the
full amount of Taxes of any kind imposed by any jurisdiction on
amounts payable
under this Section 8, and any liability (including penalties,
interest and
expenses arising thereon or with respect thereto) arising therefrom
or with
respect thereto, provided that Buyer shall have provided Seller
with evidence,
reasonably satisfactory to Seller, of payment of Taxes or Other
Taxes, as the
case may be.
(d) Any Buyer that
is not incorporated under the laws of the United
States, any State thereof, or the District of Columbia (a "Foreign
Buyer") shall
provide Seller with properly completed United States Internal
Revenue Service
("IRS") Form W-8BEN or W-8ECI or any successor form prescribed by
the IRS,
certifying that such Foreign Buyer is entitled to benefits under an
income tax
treaty to which the United States is a party which reduces the rate
of
withholding tax on payments of interest or certifying that the
income receivable
pursuant to this Agreement is effectively connected with the
conduct of a trade
or business in the United States on or prior to the date upon which
each such
Foreign Buyer becomes a Buyer. Each Foreign Buyer will resubmit the
appropriate
form on the earliest of (A) the third anniversary of the prior
submission or (B)
on or before the expiration of thirty (30) days after there is a
"change in
circumstances" with respect to such Foreign Buyer as defined in
Treas. Reg.
Section 1.1441(e)(4)(ii)(D). For any period with respect to which a
Foreign
Buyer has failed to provide Seller with the appropriate form or
other relevant
document pursuant to this Section 8(d) (unless such failure is due
to a change
in treaty, law, or regulation occurring subsequent to the date on
which a form
originally was required to be provided), such Foreign Buyer shall
not be
entitled to any "gross-up" of Taxes or indemnification under
Section 8(c) with
respect to Taxes imposed by the United States; provided, however,
that should a
Foreign Buyer, which is otherwise exempt from a withholding tax,
become subject
to Taxes because of its failure to deliver a form required
hereunder, Seller
shall take such steps as such Foreign Buyer shall reasonably
request to assist
such Foreign Buyer to recover such Taxes.
(e) Without
prejudice to the survival or any other agreement of Seller
hereunder, the agreements and obligations of Seller contained in
this Section 8
shall survive the termination of this Agreement. Nothing contained
in this
Section 8 shall require Buyer to make available any of their tax
returns or
other information that it deems to be confidential or
proprietary.
- 18 -
<PAGE>
(f) Each party to
this Agreement acknowledges that it is its intent for
purposes of U.S. federal, state and local income and franchise
taxes to treat
each Transaction as indebtedness of Seller that is secured by the
Purchased
Assets and that the Purchased Assets are owned by Seller in the
absence of an
Event of Default by Seller. All parties to this Agreement agree to
such
treatment and agree to take no action inconsistent with this
treatment, unless
required by law.
9. SECURITY INTEREST; BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT
----------------------------------------------------------
(a) Seller and Buyer
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 other than sales, and as security for
Seller's
performance of all of its Obligations, Seller hereby grants to
Buyer a first
priority security interest in the Purchased Assets. Seller
acknowledges and
agrees that its rights with respect to the Purchased Assets are and
shall
continue to be at all times junior and subordinate to the rights of
Buyer
hereunder. In addition, any collateral that secures any obligations
under any
other agreement between Buyer and Seller shall collateralize the
Seller's
obligations hereunder.
(b) Seller hereby
irrevocably constitutes and appoints Buyer and any
officer or agent thereof, with full power of substitution, as its
true and
lawful attorney-in-fact with full irrevocable power and authority
in the place
and stead of Seller and in the name of Seller or in its own name,
from time to
time in Buyer's discretion, to file such financing statement or
statements
relating to the Purchased Assets as Buyer at its option may deem
appropriate,
and if an Event of Default shall have occurred and be continuing,
for the
purpose of carrying out the terms of this Agreement, to take any
and all
appropriate action and to execute any and all documents and
instruments which
may be reasonably necessary or desirable to accomplish the purposes
of this
Agreement, , and, without limiting the generality of the foregoing,
Seller
hereby gives Buyer the power and right, on behalf of Seller,
without assent by,
but with notice to, Seller and the Servicer (if other than the
Seller), to do
the following:
(i) in the
name of Seller, or in its own name, or otherwise, to
take possession
of and endorse and collect any checks, drafts, notes,
acceptances or
other instruments for the payment of moneys due with respect
to any other
Purchased Assets and to file any claim or to take any other
action or
initiate and maintain any appropriate proceeding in any
appropriate
court of law or equity or otherwise deemed appropriate by Buyer
for the purpose
of collecting any and all such moneys due with respect to
any other
Purchased Assets whenever payable;
(ii)
to pay or discharge taxes and Liens levied or placed on or
threatened
against the Purchased Assets;
(iii) (A)
to direct any party liable for any payment under any
Purchased Assets
to make payment of any and all moneys due or to become due
thereunder
directly to Buyer or as Buyer shall direct including, without
limitation, the
right to send "hello" letters or direct "goodbye" letters
in the form of
Exhibit F on behalf of the Seller with respect to
Servicing
Released Loans; (B) to ask or demand for, collect, receive
payment of and
receipt for any and all moneys, claims and other amounts due
or to become due
at any time in respect of or arising out of any Purchased
Assets; (C) to
sign and endorse any invoices, assignments, verifications,
notices and
other documents in connection with any Purchased Assets; (D) to
commence and
prosecute any suits, actions or proceedings at law or in
equity in any
court of competent jurisdiction to collect the Purchased
Assets or any
proceeds thereof and to enforce any other right in respect of
any Purchased
Assets; (E) to defend any suit, action or proceeding brought
against Seller
with respect to any Purchased Assets; (F) to settle,
compromise or
adjust any suit, action or proceeding described in clause
- 19 -
<PAGE>
(E)
above and, in connection therewith, to give such discharges or
releases
as
Buyer may deem appropriate; and (G) generally, to sell, transfer,
pledge
and
make any agreement with respect to or otherwise deal with any
Purchased
Assets as fully and completely as though Buyer was the absolute
owner
thereof for all purposes, and to do, at Buyer's option and
Seller's
expense, at any time, and from time to time, all acts and things
which
Buyer deems necessary to protect, preserve or realize upon the
Purchased
Assets and Buyer's Liens thereon and to effect the intent of
this
Agreement, all as fully and effectively as Seller might do.
Seller hereby ratifies all that said attorneys shall lawfully do or
cause
to be done by virtue hereof. This power of attorney is a power
coupled with an
interest and shall be irrevocable.
Seller also authorizes Buyer, from time to time and if an Event of
Default
shall have occurred and be continuing, to execute any endorsements,
assignments
or other instruments of conveyance or transfer with respect to the
Purchased
Assets in connection with any sale provided for in Section 20
hereof.
The
powers conferred on Buyer hereunder are solely to protect
Buyer's
interests in the Purchased Assets and shall not impose any duty
upon it to
exercise any such powers. Buyer shall be accountable only for
amounts that they
actually receive as a result of the exercise of such powers, and
neither Buyer
nor any of its officers, directors, employees or agents shall be
responsible to
Seller for any act or failure to act hereunder, except for their
own gross
negligence or willful misconduct.
10. CONDITIONS
PRECEDENT
--------------------
(a)
As conditions
precedent to the initial Transaction, Buyer shall have
received on or before the day of such initial Transaction the
following, in
form and substance satisfactory to Buyer and duly executed by each
party
thereto (as applicable):
(i) The
Program Documents duly executed and delivered by the
parties thereto and being in full force and effect, free of any
modification, breach or waiver;
(ii)
A certified copy of Seller's consents or corporate
resolutions, as applicable, approving the Program Documents and
Transactions thereunder (either specifically or by general
resolution), and all documents evidencing other necessary
corporate
action or governmental approvals as may be required in connection
with
the
Program Documents;
(iii) An
incumbency certificate of the secretary of Seller
certifying the names, true signatures and titles of Seller's
representatives who are duly authorized to request Transactions
hereunder and to execute the Program Documents and the other
documents
to
be delivered thereunder;
(iv)
An opinion of Seller's counsel as to such matters as Buyer
may
reasonably request (including, without limitation, with respect
to
Buyer's first priority lien on and perfected security interest in
the
Purchased Assets, a non-contravention, enforceability and
corporate
opinion with respect to Seller, an opinion with respect to the
inapplicability of the Investment Company Act of 1940 to Seller,
an
opinion that this Agreement constitutes a "repurchase agreement"
and a
"securities contract" within the meaning of the Bankruptcy Code and
an
opinion that no Transaction constitutes an avoidable transfer
under
Section 546(f) of the Bankruptcy Code, each in form and
substance
acceptable to Buyer;
- 20 -
<PAGE>
(v) Seller
shall have paid to Buyer and Buyer shall have
received all accrued and unpaid fees and expenses owed to Buyer
in
accordance with the Program Documents;
(vi)
A copy of the insurance policies required by Section 14(o)
of
this Agreement;
(vii)
Buyer shall have completed the due diligence review pursuant
to
Section 38, and such review shall be satisfactory to Buyer in
its
sole
discretion;
(viii) Evidence
that all other actions necessary to perfect and
protect Buyer's interest in the Purchased Assets have been
taken,
including, without limitation, duly executed and filed Uniform
Commercial Code financing statements acceptable to Buyer and
covering
the
Purchased Assets on Form UCC-1; and
(ix)
Any other documents reasonably requested by Buyer.
(b)
The obligation
of Buyer to enter into each Transaction pursuant to
this Agreement is subject to the following conditions
precedent:
(i) Buyer or
its designee shall have received on or before the
Purchase Date with respect to Purchased Loans that are to be
the
subject of such Transaction (unless otherwise specified in this
Agreement) the following, in form and substance satisfactory to
Buyer
and
(if applicable) duly executed:
(A) The Loan
Transaction Notice and Seller Asset Schedule with
respect to such Purchased Loans, delivered pursuant to
Section 3(a);
(B) The Trust
Receipt with respect to all Purchased Loans, with
the Seller Asset Schedule attached;
(C) Such
certificates, customary opinions of counsel or other
documents as Buyer may reasonably request, provided that
such opinions of counsel shall not be required routinely in
connection with each Transaction but shall only be required
from time to time as deemed necessary by Buyer in its
commercially reasonable judgment;
(D) A copy of
the related Acquisition Guidelines certified by
Seller as a true and complete copy (to the extent not
already delivered to Buyer); and
(E) The Buyer
shall have received a Servicer's Side Letter duly
executed by the Seller and the related Servicer, together
with a completed Schedule 1 attached thereto and the related
Servicing Agreement, or, if a Servicer's Side Letter
executed by such Servicer shall have been delivered to Buyer
in
connection with a prior Transaction, the Seller shall
instead deliver to such Servicer and Buyer an updated
Schedule 1 reflected the Loans proposed to be purchased that
are serviced by such Servicer.
(ii)
Buyer or its designee
shall have received on or before the Purchase
Date with respect to Purchased Securities that are to be the
subject of such
Transaction (unless otherwise specified in this Agreement) the
following, in
form and substance satisfactory to Buyer and (if applicable) duly
executed (or
in the case of items (F) through (H) below, such items shall have
been performed
or otherwise be true and correct prior to the consummation of the
Transaction):
- 21 -
<PAGE>
(A) the
Security Transaction Notice with respect to such
Securities, each in accordance with the delivery procedures
specified in Section 3(a);
(B) the
Securities (and all related documentation) and the
related Security Files with respect to such Securities, each
in accordance with the applicable delivery procedures
specified in Section 3(b);
(C)
a copy of
the fully executed applicable Trustee Instruction
Letter (acknowledged in writing by the related Trustee) to
the Buyer prior to the consummation of the Transaction, in
which Seller has (1) notified the related Trustee of the
sale of the related Securities hereunder, and (2) instructed
the Trustee to pay all amounts payable to the holders of the
Securities to an account specified from time to time by the
Buyer;
(D) such
certificates, customary opinions of counsel or other
documents to Buyer or its designee prior to the consummation
of the Transaction, as Buyer may reasonably request,
provided that such opinions of counsel shall not be required
routinely in connection with each Transaction but shall only
be required from time to time as deemed necessary by Buyer
in its commercially reasonable judgment;
(E) a copy of
each of the related Pooling Agreements to the
Buyer, each certified by Seller, the related trustee or the
related master servicer as a true, correct and complete copy
of the original;
(F) any
delivery of a Security shall be sufficient to cause the
Buyer to have a perfected, first priority security interest
in, and to be the "entitlement holder" (as defined in
Section 8-102(a)(7) of the Uniform Commercial Code of the
State of the New York (the "UCC")) with respect to such
Securities;
(G) no
Security, whether certificated or uncertificated, shall
remain in the possession of, or, at the Buyer's discretion,
in the name of, Seller or any of its agents, or in any
account in the name of Seller or any of its agents; and
(H) at the
request of the Buyer, Seller shall take such other
and further steps, and shall execute and deliver such
documents or instruments necessary in the opinion of the
Buyer, to effect and perfect a legally valid delivery of the
relevant interest granted in the Security to the Buyer
hereunder.
(iii) No Default or Event of Default shall have occurred and be
continuing;
(iv)
Buyer shall not have
reasonably determined that the introduction of
or a change in any Requirement of Law or in the interpretation or
administration
of any requirement of law applicable to Buyer has made it unlawful,
and no
Governmental Authority shall have asserted that it is unlawful, for
Buyer to
enter into Transactions with the applicable Pricing Rate;
(v)
All
representations and warranties in the Program Documents shall
be
true and correct on the date of such Transaction and Seller is in
compliance
with the terms and conditions of the Program Documents;
- 22 -
<PAGE>
(vi)
The then
aggregate outstanding Repurchase Price for all Purchased
Assets, when added to the Purchase Price for the requested
Transaction, shall
not exceed the Maximum Aggregate Purchase Price;
(vii) Satisfaction of
any conditions precedent to the initial Transaction
as set forth in clause (a) of this Section 10 that were not
satisfied prior to
such initial Purchase Date;
(viii) Buyer shall have determined that all actions necessary or,
in the
opinion of Buyer, desirable to maintain Buyer's perfected security
interest in
the Purchased Assets have been taken;
(ix)
Seller shall
have paid to Buyer and Buyer shall have received any
accrued and unpaid fees and expenses owed to Buyer in accordance
with the
Program Documents;
(x)
Buyer or
their designee shall have received any other documents
reasonably requested by Buyer;
(xi)
Such
Transaction, when added to all other Transactions previously
entered into on such Business Day shall not exceed two (2)
Transactions;
(xii) There is no
Margin Deficit at the time immediately prior to entering
into a new Transaction;
(xiii) The Purchase
Price for the requested Transaction shall not be
less than $5,000,000 in any one Business Day;
(xiv) No event or
events shall have been reasonably determined by Buyer to
have occurred resulting in the effective absence of a whole-loan
or
asset-backed-securities market or commercial-paper market;
(xv)
Each Warehouse
Lender (including any party that has
a
precautionary security interest in an Asset) has duly executed a
Warehouse
Lender's Release and has released all of its right, title and
interest in, to
and under such Asset (including, without limitation, any security
interest that
such secured party or secured party's agent may have by virtue of
its
possession, custody or control thereof) and has filed Uniform
Commercial Code
termination statements in respect of any Uniform Commercial Code
filings made in
respect of such Asset, and each such Warehouse Lender's Release and
Uniform
Commercial Code termination statement has been delivered to Buyer
prior to such
Transaction and to the Custodian as part of the Asset File;
(xvi) Except with
respect to Assets subject to a Warehouse Lender's
Release, the Seller shall duly execute and deliver to Buyer a
Seller's Release;
and
(xvii) Seller shall have satisfied all then-outstanding
repurchase
obligations in connection with the mortgage loans that may be
required under
mortgage loan purchase agreements between Buyer and Seller or
Seller's
Affiliates or any of Buyer's Affiliates and Seller or Seller's
Affiliates.
- 23 -
<PAGE>
11. RELEASE OF
PURCHASED ASSETS
---------------------------
Upon
timely payment in full of the Repurchase Price and all other
Obligations (if any) then owing with respect to a Purchased Asset,
unless a
Default or Event of Default shall have occurred and be continuing,
then (a)
Buyer shall be deemed to have terminated any security interest that
Buyer may
have in such Purchased Asset, (b) all of Buyer's right, title and
interest in
such Purchased Assets shall be deemed transferred to Seller, and
(c) with
respect to such Purchased Asset, Buyer shall or shall direct
Custodian to
release such Purchased Asset to Seller unless such release and
termination would
give rise to or perpetuate a Margin Deficit. Except as set forth in
Sections
6(a) and 17, Seller shall give at least one (1) Business Day prior
written
notice to Buyer if such repurchase shall occur on any date other
than the
Repurchase Date.
If
such a Margin Deficit is applicable, Buyer shall notify Seller of
the
amount thereof and Seller may thereupon satisfy the Margin Call in
the manner
specified in Section 6.
12. RELIANCE
--------
With
respect to any Transaction, Buyer may conclusively rely upon,
and
shall incur no liability to Seller in acting upon, any request or
other
communication that Buyer reasonably believe to have been given or
made by a
person authorized to enter into a Transaction on Seller's
behalf.
13. REPRESENTATIONS
AND WARRANTIES
------------------------------
Seller hereby represents and warrants, and shall on and as of the
Purchase
Date for any Transaction and on and as of each date thereafter
through and
including the related Repurchase Date be deemed to represent and
warrant that:
(a)
Due
Organization and Qualification. Seller is duly organized,
validly existing and in good standing under the laws of the State
of Maryland,
the jurisdiction in which it is organized. Seller is duly qualified
to do
business and has obtained all necessary licenses, permits,
charters,
registrations and approvals necessary for the conduct of its
business as
currently conducted and the performance of its obligations under
the Program
Documents except where any failure to obtain such a license,
permit, charter,
registration or approval will not cause a Material Adverse Effect
with respect
to Seller or impair the enforceability of any Asset. Seller is
organized and
will operate in conformity with the requirements for qualification
and taxation
as a REIT under Sections 856 through 860 of the Code and the
regulations and
published interpretations thereunder, for all taxable years
commencing with its
taxable year ended December 31, 2007.
(b)
Power and
Authority. Seller has all necessary power and authority to
conduct its business as currently conducted, to execute, deliver
and perform its
obligations under the Program Documents and to consummate the
Transactions.
(c)
Due
Authorization. The execution, delivery and performance of the
Program Documents by Seller has been duly authorized by all
necessary action and
do not require any additional approvals or consents or other action
by, or any
notice to or filing with, any Person other than any that have
heretofore been
obtained, given or made.
- 24 -
<PAGE>
(d)
Noncontravention. None of the execution and delivery of the
Program
Documents by Seller or the consummation of the Transactions and
transactions
thereunder:
(i)
conflicts with, breaches or violates any provision of the
organizational documents or material agreements of Seller or any
law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or
award currently in effect having applicability to Seller or its
properties;
(ii)
constitutes a material default by Seller under any loan or
repurchase agreement, mortgage, indenture or other agreement or
instrument
to
which Seller is a party or by which it or any of its properties is
or
may
be bound or affected; or
(iii) results in
or requires the creation of any Lien upon or in
respect of any of the assets of Seller except the Liens relating to
the
Program Documents.
(e) Legal Proceeding.
There is no action, proceeding or investigation by
or before any court, governmental or administrative agency or
arbitrator
affecting any of the Purchased Assets, Seller or any of its
Affiliates, pending
or threatened, which, if decided adversely, would have a Material
Adverse Effect
with respect to Seller.
(f)
Valid and
Binding Obligations. Each of the Program Documents to
which Seller is a party, when executed and delivered by Seller will
constitute
the legal, valid and binding obligations of Seller, enforceable
against Seller,
in accordance with their respective terms, except as such
enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar
laws affecting creditors' rights generally and general equitable
principles
(regardless of whether enforcement is sought in a proceeding in
equity or at
law).
(g)
Financial
Statements. The financial statements of Seller, copies of
which have been furnished to Buyer, (i) are, as of the dates and
for the periods
referred to therein, complete and correct in all material respects,
(ii) present
fairly the financial condition and results of operations of Seller
as of the
dates and for the periods indicated and (iii) have been prepared in
accordance
with GAAP consistently applied, except as noted therein (subject as
to interim
statements to normal year-end adjustments). Since the date of the
most recent
financial statements, there has been no Material Adverse Change
with respect to
Seller. Except as disclosed in such financial statements or
pursuant to Section
14(h) hereof, Seller is not subject to any contingent liabilities
or commitments
that, individually or in the aggregate, have a material possibility
of causing a
Material Adverse Change with respect to Seller.
(h)
Accuracy
of Information. None of the documents or information
prepared by or on behalf of Seller and provided to Buyer relating
to Seller's
financial condition contain any statement of a material fact with
respect to
Seller, or the Transactions that was untrue or misleading in any
material
respect when made. Since the furnishing of such documents or
information, there
has been no change, nor any development or event involving a
prospective change
known to Seller, that would render any of such documents or
information untrue
or misleading in any material respect.
(i)
No
Consents. No consent, license, approval or authorization from,
or
registration, filing or declaration with, any regulatory body,
administrative
agency or other governmental instrumentality, nor any consent,
approval, waiver
or notification of any creditor, lessor or other non-governmental
Person, is
required in connection with the execution, delivery and performance
by Seller of
this Agreement or any other Program Document, other than any that
have
heretofore been obtained, given or made.
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<PAGE>
(j)
Compliance
With Law, Etc. No practice, procedure or policy employed
or proposed to be employed by Seller in the conduct of their
businesses violates
any law, regulation, judgment, agreement, regulatory consent, order
or decree
applicable to it which, if enforced, would result in either a
Material Adverse
Change or a Material Adverse Effect with respect to Seller.
(k)
Solvency:
Fraudulent Conveyance. Seller is solvent and will not be
rendered insolvent by the Transaction and, after giving effect to
such
Transaction, Seller will not be left with an unreasonably small
amount of
capital with which to engage in its business. Seller does not
intend to incur,
nor believes that it has incurred, debts beyond its ability to pay
such debts as
they mature. Seller is not contemplating the commencement of
insolvency,
bankruptcy, liquidation or consolidation proceedings or the
appointment of a
receiver, liquidator, conservator, trustee or similar official in
respect of
Seller or any of its assets. The amount of consideration being
received by
Seller upon the sale of the Purchased Assets to Buyer constitutes
reasonably
equivalent value and fair consideration for such Purchased Assets.
Seller is not
transferring any Purchased Assets with any intent to hinder, delay
or defraud
any of its creditors.
(l)
Investment
Company Act Compliance. Seller is not required to be
registered as an "investment company" as defined under the
Investment Company
Act nor as an entity under the control of an entity required to be
registered as
an "investment company" as defined under the Investment Company
Act.
(m)
Taxes.
Seller has filed all federal and state tax returns which are
required to be filed and paid all taxes, including any assessments
received by
it, to the extent that such taxes have become due (other than for
taxes that are
being contested in good faith or for which it has established
adequate
reserves). Any taxes, fees and other governmental charges payable
by Seller in
connection with a Transaction and the execution and delivery of the
Program
Documents have been paid.
(n)
Additional
Representations. With respect to each Asset to be sold
hereunder by Seller to Buyer, Seller hereby makes all of the
applicable
representations and warranties set forth in Exhibit B-1 or Exhibit
B-2, as
applicable, as of the date the related Asset File is delivered to
Buyer or the
Custodian with respect to the Assets and continuously while such
Asset is
subject to a Transaction. Further, as of each Purchase Date, Seller
shall be
deemed to have represented and warranted in like manner that Seller
has no
knowledge that any such representation or warranty may have ceased
to be true in
a material respect as of such date, except as otherwise stated in a
Transaction
Notice, any such exception to identify the applicable
representation or warranty
and specify in reasonable detail the related knowledge of
Seller.
(o)
No Broker.
Seller has not dealt with any broker, investment banker,
agent, or other person, except for Buyer, who may be entitled to
any commission
or compensation in connection with the sale of Purchased Assets
pursuant to this
Agreement; provided, that if Seller has dealt with any broker,
investment
banker, agent, or other person, except for Buyer, who may be
entitled to any
commission or compensation in connection with the sale of Purchased
Assets
pursuant to this Agreement, such commission or compensation shall
have been paid
in full by Seller.
(p)
Corporate
Separateness.
(i)
The capital of Seller is adequate for the businesses and
undertakings of Seller.
(ii)
Other than as provided
in this Agreement and the other
Program Documents, Seller is not engaged in any business
transactions with
any
of its Affiliates other than transactions in the ordinary course of
its
business, conducted in a commercially reasonable manner and on an
"arm's
length" basis.
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<PAGE>
(iii) The funds
and assets of Seller are not and will not be,
commingled with the funds of any other Person.
(q)
Pooling
Agreement. To the extent the Seller is the servicer under
any Pooling Agreement related to a Purchased Security, all of
the
representations and warranties of the Seller made thereunder (which
shall not
include any mortgage loan level representations and warranties) are
true and
correct in all material respects and are incorporated herein by
reference
mutatis mutandis; or any such breach thereof does not and will not
have a
Material Adverse Effect. The Seller is not in default under any
related Pooling
Agreement related to any Purchased Security.
(r)
Acquisition Guidelines. The Acquisition Guidelines provided to
Buyer
are the true and complete Acquisition Guidelines of the related
Approved
Originator.
The
representations and warranties set forth in this Agreement
shall
survive transfer of the Purchased Assets to Buyer and shall
continue for so long
as the Purchased Assets are subject to this Agreement.
14. COVENANTS OF
SELLER
-------------------
Seller hereby covenants with Buyer as follows:
(a)
Defense of
Title. Seller warrants and will defend the right,
title and interest of Buyer in and to all Purchased Assets against
all adverse
claims and demands.
(b)
No
Amendment or Compromise. none of Sel
