Exhibit 10.4
AMENDED AND RESTATED ADDENDUM TO
MASTER REPURCHASE AGREEMENT
Dated as of August 23, 2002
Between
PULTE MORTGAGE CORPORATION
as a Seller,
and
PULTE FUNDING, INC.
as Buyer
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................................ 5
Section 1.01. Certain Defined Terms............................................................... 5
Section 1.02. Other Terms......................................................................... 23
ARTICLE II AMOUNTS AND TERMS OF PURCHASES........................................................................ 23
Section 2.01. Facility............................................................................ 23
Section 2.02. Making Purchases.................................................................... 24
Section 2.03. Margin Maintenance.................................................................. 25
Section 2.04. Collections......................................................................... 25
Section 2.05. Repurchase or Substitution Procedures............................................... 26
Section 2.06. Payments and Computations, Etc...................................................... 27
Section 2.07. Intent of the Seller and the Buyer.................................................. 28
Section 2.08. No Segregation of Assets............................................................ 28
Section 2.09. Substitution........................................................................ 29
ARTICLE III CONDITIONS OF PURCHASES.............................................................................. 30
Section 3.01. Conditions Precedent to Any Purchase from the Seller................................ 30
Section 3.02. Conditions Precedent to All Purchases............................................... 30
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................ 31
Section 4.01. Representations of the Seller....................................................... 31
ARTICLE V COVENANTS.............................................................................................. 36
Section 5.01. .................................................................................... 36
Section 5.02. Financial Statements and Reports.................................................... 36
Section 5.03. Taxes and Other Liens............................................................... 37
Section 5.04. Maintenance......................................................................... 37
Section 5.05. Further Assurances.................................................................. 38
Section 5.06. Insurance........................................................................... 38
Section 5.07. Accounts and Records................................................................ 39
Section 5.08. Right of Inspection................................................................. 39
Section 5.09. Notice of Certain Events............................................................ 39
Section 5.10. Performance of Certain Obligations.................................................. 40
Section 5.11. Notice of Default................................................................... 40
Section 5.12. Compliance with Laws and Material Agreements........................................ 40
Section 5.13. Deposits of Proceeds................................................................ 40
Section 5.14. Closing Instructions................................................................ 40
Section 5.15. Special Affirmative Covenants Concerning Transferred Mortgage Assets................ 40
Section 5.16. Limitations on Mergers and Dissolutions............................................. 41
Section 5.17. Fiscal Year......................................................................... 41
Section 5.18. Actions with Respect to Transferred Mortgage Assets. The Seller shall not:.......... 41
Section 5.19. Net Worth........................................................................... 41
Section 5.20. Employee Benefit Plans.............................................................. 41
Section 5.21. Change of Principal Office.......................................................... 41
Section 5.22. Maximum Leverage.................................................................... 42
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Section 5.23. Delivery of Special Mortgage Loans.................................................. 42
Section 5.24. Change in Business.................................................................. 42
Section 5.25. Separate Conduct of Business........................................................ 42
Section 5.26. Sales, Liens, Etc................................................................... 42
Section 5.27. Operations and Properties........................................................... 43
Section 5.28. Performance Guarantor Credit Rating................................................. 43
Section 5.29. Take-Out Commitments................................................................ 43
Section 5.30. Environmental Compliance............................................................ 43
ARTICLE VI COVENANTS............................................................................................. 43
Section 6.01. Servicing........................................................................... 43
Section 6.02. Correction of Mortgage Notes........................................................ 44
ARTICLE VII EVENTS OF DEFAULT.................................................................................... 44
Section 7.01. Events of Default................................................................... 44
Section 7.02. Remedies............................................................................ 46
ARTICLE VIII INDEMNIFICATION..................................................................................... 49
Section 8.01. Indemnities by the Seller........................................................... 49
ARTICLE IX MISCELLANEOUS......................................................................................... 51
Section 9.01. Amendments, Etc..................................................................... 51
Section 9.02. Notices, Etc........................................................................ 51
Section 9.03. Binding Effect; Assignability....................................................... 51
Section 9.04. Costs, Expenses and Taxes, Expenses and Taxes....................................... 52
Section 9.05. No Proceedings...................................................................... 52
Section 9.06. GOVERNING LAW....................................................................... 52
Section 9.07. Third Party Beneficiary............................................................. 52
Section 9.08. Execution in Counterparts........................................................... 53
Section 9.09. Repurchase Transactions............................................................. 53
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EXHIBITS
EXHIBIT A Form of Deferred Purchase Price Note
EXHIBIT B Form of ▇▇▇▇ of Sale
SCHEDULES
SCHEDULE I Trade Names
SCHEDULE II Approved Investors
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AMENDED AND RESTATED ADDENDUM TO MASTER REPURCHASE AGREEMENT
This Amended and Restated Addendum to Master Repurchase Agreement,
dated as of August 23, 2002, (this "Agreement"), is made by and among PULTE
MORTGAGE CORPORATION, a Delaware corporation (hereinafter, together with its
successors and assigns, the "Seller") and PULTE FUNDING, INC., a Michigan
corporation (hereinafter, together with its successors and assigns, the
"Buyer").
RECITALS
(1) Certain terms which are capitalized and used throughout this
Agreement (in addition to those defined above) are defined in Article I of this
Agreement or, if not defined therein, in the Master Repurchase Agreement.
(2) The Seller and Buyer have entered into that certain Master
Repurchase Agreement, dated as of December 22, 2000 (the "Master Repurchase
Agreement").
(3) The Seller and Buyer have entered into that certain Addendum
to Master Repurchase Agreement, dated as of December 22, 2000 (the "Original
Addendum").
(4) The Buyer and Seller wish to amend and restate the Original
Addendum in order to supplement and amend the Master Repurchase Agreement to
enter Transactions involving Mortgage Assets (as defined below).
(5) This Agreement is in lieu of Annexes I-VII referred to in the
Master Repurchase Agreement.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms.
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Adjusted Liabilities" means, with respect to the Seller, without
duplication, and at any time, the sum of (a) all amounts that should be
reflected as liabilities on its balance sheet, plus (b) its total direct and
indirect guaranty and other obligations in respect of borrowed money
Indebtedness of others (calculated at the maximum amount of those obligations
that is stated in the relevant documents or, if not so stated, that may
reasonably be anticipated in good faith) plus (c) to the extent not already
included in clause (a) above, its total funding obligations to originate or
acquire Mortgage Loans that, in either case, are closed but not funded, minus
(d) its total trade payables and accrued expenses incurred in the ordinary
course of its business but unrelated to originating or acquiring any specific
Mortgage Loan (including, without limitation, trade
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payables and accrued expenses owed to its Affiliates but excluding advances by
its Affiliates and interest on those advances), minus (e) such Seller's total
deferred-federal-income tax liabilities.
"Adjusted Net Worth" means, for the Seller, without duplication, and at
any time, the sum of (a) its stockholders' equity reflected on its balance
sheet, plus (b) the remainder of (A) the income that the Seller has deferred,
for accounting purposes, pending the sale of Mortgage Loans in accordance with
Statement of Financial Accounting Standards Number 91 and Number 122, as each is
published by the Financial Accounting Standards Board as of the date of this
Agreement, minus (B) reasonable reserves for the federal income tax liabilities
related to that deferred income.
"Administrative Agent" means CL New York, in its capacity as
administrative agent for the Lenders, or any successor administrative agent.
"Advance" means, with respect to any Lender, any amount disbursed by
such Lender to the Borrower pursuant to Section 2.1 or 2.20 of the Restated Loan
Agreement (or any conversion or continuation thereof).
"Advance Rate" means (i) with respect to a Conforming Loan or a Jumbo
Loan (other than a Super Jumbo Loan), ninety-eight percent (98%), (ii) with
respect to an Alt-A Loan, ninety-seven percent (97%) and (iii) with respect to a
Second Lien Loan or a Super Jumbo Loan, ninety-five percent (95%).
"Adverse Claim" means a lien, security interest, or other charge or
encumbrance, or any other type of preferential arrangement.
"Affiliate" of any Person means (a) any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person, or (b) any other Person who is a director, officer or employee (i) of
such Person, or (ii) of any Person described in the preceding clause (a). For
purposes of this definition, the term "control" (and the terms "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession or ownership, directly or indirectly, of the power either (x) to
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise, or (y) vote 10% or more of the securities
having ordinary power in the election of directors of such Person.
"Agreement" means this Agreement, as amended, modified or supplemented
from time to time.
"Alt-A Loan" means a Mortgage Loan (other than a Conforming Loan or a
Jumbo Loan) that (1) does not conform to the conventional underwriting standards
of ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae but that is underwritten by an Approved
Investor (other than ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae), within guidelines
generally acceptable to industry norms for "Alt-A" loans, (2) has a demonstrated
secondary market and are readily securitizable, and (3) matches all applicable
requirements for purchase under the requirements of a Take-Out Commitment
specifically issued for the purchase of such Mortgage Loan, and (4) is a First
Lien Mortgage Loan. Certain Alt-A Loans are No Asset No Income Loans.
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"Alternate Base Rate" means:
(i) for the CL New York Group, on any date, a fluctuating rate of
interest per annum equal to the higher of:
(a) the rate of interest most recently announced by CL
New York as its base rate; and
(b) the Federal Funds Rate (as defined below) most
recently determined by the Administrative Agent plus 1.0% per
annum; and
(ii) for the Bank One Group, on any date, a fluctuating rate of
interest per annum equal to the higher of:
(a) a rate per annum equal to the prime rate of interest
from time to time by Bank One or its parent (which is not
necessarily the lowest rate charged to any customer), changing
when and as said prime rate changes; and
(b) the Federal Funds Rate (as defined below) most
recently determined by Bank One plus 1.0% per annum.
For purposes of this definition, "Federal Funds Rate" means, for any
period, a fluctuating interest rate per annum equal (for each day during such
period) to (i) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the immediately preceding Business Day) by the Federal Reserve Bank of New
York; or (ii) if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Administrative Agent, from three federal funds brokers of recognized
standing selected by it. The Alternate Base Rate is not necessarily intended to
be the lowest rate of interest determined by CL New York in connection with
extensions of credit.
"Approved Investor" means:
(a) ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae, or
(b) any Person with short-term ratings of at least A-1, P-1
and F1 from S&P, ▇▇▇▇▇'▇ and Fitch, respectively, or long-term
unsecured debt ratings (or in the case of a bank without such ratings
that is the principal subsidiary of a bank holding company, the rating
of the bank holding company) of at least AA, Aa2 and AA from S&P,
▇▇▇▇▇'▇, and Fitch respectively, or
(c) all other Persons as may be approved by the Managing
Agents, which approvals may be subject to certain concentration limits
but may not be unreasonably withheld or delayed;
provided that (i) if an Approved Investor has a short-term rating or a
long-term unsecured debt rating at the time such Person first becomes
an "Approved Investor" and such
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Person's short-term ratings or long-term unsecured debt ratings are
subsequently downgraded or withdrawn, such Person shall cease to be an
"Approved Investor"; provided, further, that with respect to any
Take-Out Commitments issued by such Person prior to the date of such
downgrade or withdrawal, such Person shall cease to be an "Approved
Investor" 60 days following such downgrade or withdrawal; and (ii) if
an Approved Investor does not have a short-term rating or a long-term
unsecured debt rating, such Person shall cease to be an "Approved
Investor" upon prior written notice from either Managing Agent if such
Managing Agent has good faith concerns about the future performance of
such Person; provided, further, that with respect to any Take-Out
Commitments issued by such Person prior to such notice, such Person
shall cease to be an "Approved Investor" 60 days following such notice.
As of the date of this Agreement, Schedule II hereto sets forth the
Approved Investors pursuant to the preceding clauses (b) and (c) (and any
applicable concentration limits). Schedule II shall be updated from time to time
as Approved Investors are added or deleted or concentration limits are changed
pursuant to the preceding clauses (b) and (c).
"Assignment and Acceptance" has the meaning set forth in the Restated
Loan Agreement.
"Atlantic" means Atlantic Asset Securitization Corp. and its successors
and assigns.
"Bank" means each of CL New York, Bank One and Lloyds and each
respective Eligible Assignee (as defined in the Restated Loan Agreement) that
shall become a party to the Restated Loan Agreement pursuant to an Assignment
and Acceptance. Unless otherwise noted, references to "Banks" shall include the
Seasonal Banks.
"Bank One" has the meaning set forth in the preamble of the Restated
Loan Agreement and its successors and assigns.
"Bank One Group" means Jupiter, Bank One and each other Group Bank of
Jupiter.
"Business Day" means a day on which (i) commercial banks in New York
City, New York, Chicago, Illinois, and Denver, Colorado are not authorized or
required to be closed and (ii) commercial banks in the State in which the
Collateral Agent has its principal office are not authorized or required to be
closed, and (b) if this definition of "Business Day" is utilized in connection
with a Eurodollar Advance, a day on which dealings in United States dollars are
carried out in the London interbank market.
"CL New York" means Credit Lyonnais New York Branch and its successors
and assigns.
"CL New York Group" means Atlantic, CL New York, and each other Group
Bank of Atlantic.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
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"Collateral Agent" means LaSalle Bank National Association, and its
successors and assigns.
"Collateral Value" means
(A) with respect to each Eligible Mortgage Loan and at
all times, an amount equal to the Advance Rate for such Eligible
Mortgage Loan times the least of:
(1) the lesser of the original principal amount
of such Eligible Mortgage Loan or the acquisition price paid by PMC on
the closing and funding of such Eligible Mortgage Loan;
(2) for each Eligible Mortgage Loan, a ratable
amount determined by multiplying (a) the weighted average purchase
price (expressed as a percentage of par) that Approved Investors are
obligated to pay, pursuant to Take-Out Commitments, for all Eligible
Mortgage Loans, as shown on the most recent Hedge Report, times (b) the
outstanding principal amount of such Eligible Mortgage Loan; and
(3) while a Default or Event of Default is
continuing, the Market Value of such Eligible Mortgage Loan; and
(B) with respect to the Collection Account, the balance
of collected funds therein which is not subject to any Lien in favor of
any Person other than the Lien in favor of the Administrative Agent for
the benefit of the holders of the Obligations;
provided, however, that
(a) at any time, the portion of total Collateral Value
that may be attributable to Jumbo Loans shall not exceed thirty-five
percent (35%)of the Maximum Facility Amount or, during the Seasonal
Period, thirty-five percent (35%) of the Combined Facility Amount;
(b) at any time, the portion of total Collateral Value
that may be attributable to Super Jumbo Loans shall not exceed ten
percent (10%) of the Maximum Facility Amount or, during the Seasonal
Period, ten percent (10%) of the Combined Facility Amount;
(c) at any time, the portion of total Collateral Value
that may be attributable to Alt-A Loans shall not exceed fifteen
percent (15%) of the Maximum Facility Amount or, during the Seasonal
Period, fifteen percent (15%) of the Combined Facility Amount;
(d) at any time, the portion of total Collateral Value
that may be attributable to No Asset No Income Loans shall not exceed
five percent (5%) of the Maximum Facility Amount or, during the
Seasonal Period, five percent (5%) of the Combined Facility Amount;
(e) at any time, the portion of total Collateral Value
that may be attributable to Mortgage Loans for which the Mortgage Notes
have been withdrawn for correction pursuant to Section 3.4 of the
Restated Collateral Agency Agreement shall not exceed
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$5,000,000 as determined in accordance with said Section 3.4 of the
Restated Collateral Agency Agreement;
(f) at any time, the portion of the total Collateral
Value that may be attributable to any single Approved Investor listed
on Schedule II of the Restated Loan Agreement pursuant to one or more
Take-Out Commitments shall not exceed the concentration limit for such
Approved Investor as set forth on Schedule II of the Restated Loan
Agreement(as the same may be updated from time to time);
(g) at any time, the portion of total Collateral Value
that may be attributable to Mortgage Loans that have been Eligible
Mortgage Loans (A) for more than 120 days shall not exceed ten percent
(10%) of the Maximum Facility Amount or, during the Seasonal Period,
ten percent (10%) of the Combined Facility Amount or (B) for more than
180 days shall be zero;
(h) a Mortgage Loan that ceases to be an Eligible
Mortgage Loan shall have a Collateral Value of zero;
(i) at any time, (A) except the first five and last five
Business Days of any month, the portion of total Collateral Value that
may be attributable to Special Mortgage Loans with respect to which the
related Principal Mortgage Documents have not been delivered to the
Collateral Agent within nine (9) Business Days after the date the
Assignment was delivered to the Collateral Agent shall not exceed
thirty percent (30%) of the Maximum Facility Amount or, during the
Seasonal Period, thirty percent (30%) of the Combined Facility Amount,
and (B) during the first five and last five Business Days of any month,
the portion of total Collateral Value that may be attributable to
Special Mortgage Loans with respect to which the related Principal
Mortgage Documents have not been delivered to the Collateral Agent
within nine (9) Business Days after the date the Assignment was
delivered to the Collateral Agent shall not exceed fifty percent (50%)
of the Maximum Facility Amount or, during the Seasonal Period, fifty
percent (50%) of the Combined Facility Amount; and
(j) at any time, the portion of total Collateral Value
that may be attributable to Second Lien Loans shall not exceed five
percent (5%) of the Maximum Facility Amount or, during the Seasonal
Period, five percent (5%) of the Combined Facility Amount.
"Collection Account" means the account established by the Buyer
pursuant to Section 2.7(b) of the Restated Loan Agreement.
"Collections" means, with respect to any Mortgage Asset, all cash
collections (other than in respect of escrows payable under the related Mortgage
Loan) and other cash proceeds of such Mortgage Asset.
"Combined Facility Amount" means the Maximum Facility Amount plus the
Seasonal Facility Amount.
"Combined Loan-to-Value Ratio" means, with respect to any Second Lien
Loan, the fraction, expressed as a percentage, the numerator of which is equal
to the sum of (x) outstanding
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principal debt of such Mortgage Loan as of the Mortgage Origination Date, and
(y) the outstanding principal amount of the mortgage loan secured by the same
mortgaged property, and the denominator of which is equal to the value of the
related Mortgage Loan Collateral on the basis of the lesser of the appraised
value at origination or the sales price of such Mortgage Loan.
"Confirmation" is defined in Section 2.02(a) hereto.
"Conforming Loan" means (i) a Mortgage Loan that complies with all
applicable requirements for purchase under a ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or other
similar Governmental Authority standard form of conventional mortgage loan
purchase contract, then in effect, or (ii) an FHA Loan or a VA Loan, that, in
either case, is a First Lien Mortgage Loan.
"Debtor Laws" means all applicable liquidation, conservatorship,
bankruptcy, fraudulent transfer or conveyance, moratorium, arrangement,
receivership, insolvency, reorganization or similar laws from time to time in
effect affecting the rights of creditors generally.
"Default" means any condition or event that, with the giving of notice
or lapse of time or both and unless cured or waived, would constitute an Event
of Default.
"Default Rate" has the meaning ascribed to such term in the Restated
Loan Agreement.
"Defaulted Mortgage Loan" means a Mortgage Asset under which the
Obligor is 30 or more days in payment default or has taken any action, or
suffered any event of the type described in Section 7.01(a)(vii), 7.01(a)(viii)
or 7.01(a)(ix) or is in foreclosure.
"Deferred Purchase Price" means the portion of the Purchase Price of
Purchased Mortgage Assets purchased on any Purchase Date exceeding the amount of
the Purchase Price under Section 2.02 to be paid in cash. The obligations of the
Buyer in respect of the Deferred Purchase Price shall be evidenced by the
Buyer's subordinated promissory note in the form of Exhibit A hereto.
"Eligible Institution" means any depository institution, organized
under the laws of the United States or any state, having capital and surplus in
excess of $200,000,000, the deposits of which are insured to the full extent
permitted by law by the Federal Deposit Insurance Corporation and that is
subject to supervision and examination by federal or state banking authorities;
provided that such institution also must have a rating of A or higher with
respect to long-term deposit obligations from ▇▇▇▇▇'▇ and A2 or higher with
respect to long-term deposit obligations from S&P and A or higher with respect
to long-term deposit obligations from Fitch. If such depository institution
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.
"Eligible Mortgage Asset" means an Eligible Mortgage Loan.
"Eligible Mortgage Collateral" means Eligible Mortgage Loans and the
Collection Account.
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"Eligible Mortgage Loan" means a Mortgage Loan:
(a) that (i) is a closed and funded Mortgage Loan, (ii) has a
maximum term to maturity of 30 years and the proceeds of which were used either
to finance a portion of the purchase price of a Property encumbered by the
related Mortgage or to refinance a loan secured by such Property, and (iii) is
secured by a perfected first-priority Lien (except Second-Lien Loans) on
residential real Property consisting of land and a one-to-four family dwelling
thereon which is completed and ready for owner occupancy, including townhouses
and condominiums;
(b) that is a Conforming Loan, a Jumbo Loan, an Alt-A Loan or a
Second Lien Loan;
(c) in which the Administrative Agent has been granted and
continues to hold a perfected (other than actual delivery of the Mortgage Note
to the Collateral Agent for Special Borrowings), first-priority (except
Second-Lien Loans), security interest for the benefit of the holders of the
Obligations;
(d) for which the Mortgage Note is endorsed (without recourse) in
blank and each of such Mortgage Loan and the related Mortgage Note is a legal,
valid and binding obligation of the Obligor thereof;
(e) for which, other than in respect of Special Mortgage Loans,
the Principal Mortgage Documents have been received by the Collateral Agent and
are in form and substance reasonably acceptable to the Collateral Agent;
(f) that is either eligible for delivery or designated for
delivery under a Take-Out Commitment from an Approved Investor; provided that no
more than 45 days have lapsed since the date on which any documentation relating
to such Mortgage Loan was shipped to the related Approved Investor;
(g) that, immediately prior to the pledge thereof under the
Restated Collateral Agency Agreement, together with the related Mortgage Loan
Collateral, is owned beneficially by the Buyer free and clear of any Lien of any
other Person other than the Administrative Agent for the benefit of the holders
of the Obligations (except Second-Lien Loans);
(h) that, together with the related Mortgage Loan Collateral, does
not contravene any Governmental Requirements applicable thereto (including,
without limitation, the Real Estate Settlement Procedures Act of 1974, as
amended, and all laws, rules and regulations relating to usury,
truth-in-lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices, privacy and other applicable
federal and state consumer protection laws) and with respect to which no party
to the related Mortgage Loan Collateral is in violation of any Governmental
Requirements (or procedure prescribed thereby) if such violation would impair
the collectability of such Mortgage Loan or the saleability of such Mortgage
Loan under the applicable Take-Out Commitment;
(i) that, (i) is not a Seasoned Mortgage Loan or an Uncovered
Mortgage Loan; (ii) is not a Defaulted Mortgage Loan at the time it is
transferred to the Buyer pursuant to this Agreement; (iii) has not previously
been sold to an Approved Investor and repurchased by Buyer; (iv) is a Mortgage
Loan with respect to which the Principal Mortgage Documents relating
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to such Mortgage Loan were delivered to the Collateral Agent within the time
frame set forth in Section 2.3(c) of the Restated Loan Agreement; provided that,
upon delivery of such Principal Mortgage Documents to the Collateral Agent, such
Mortgage Loans may subsequently qualify as Eligible Mortgage Loans to support
Borrowings subsequent to such delivery; or (v) has an original principal balance
not in excess of $1,000,000.00;
(j) that if the Mortgage Loan Collateral has been withdrawn for
correction pursuant to Section 6.02 such Mortgage Loan Collateral has been
returned to the Collateral Agent within 14 calendar days after withdrawal as
required by Section 6.02;
(k) that is denominated and payable in U.S. dollars in the United
States and the Obligor of which is a natural person who is a U.S. citizen or
resident alien or a corporation or other legal entity organized under the laws
of the United States or any State thereof or the District of Columbia;
(l) that is not subject to any right of rescission, setoff,
counterclaim or other dispute whatsoever;
(m) that was acquired by the Buyer from the Seller within 60 days
after its Mortgage Origination Date;
(n) that is covered by the types and amounts of insurance required
by Section 5.06;
(o) with respect to which all representations and warranties made
by the Seller in the Restated Loan Agreement and this Agreement are true and
correct in all material respects and with respect to which all loan level
covenants made in the Restated Loan Agreement and this Agreement have been
complied with;
(p) that is subjected to the following "Quality Control" measures
by personnel of the Seller before the Mortgage Note is funded by the Seller:
(i) for those Mortgage Loans not originated by
the Seller, is underwritten by the Seller prior to funding thereof and
after performance of all underwriting procedures, is submitted to the
Seller for closing where it is reviewed for thoroughness and compliance
(including truth-in-lending, good faith estimates and other
disclosures) and a verbal verification of employment and in-file credit
report are obtained;
(ii) with respect to which, all Mortgage Loan
Collateral is prepared by the Seller and submitted to the closing agent
at the time of funding the related Mortgage Loan; and
(q) that, if it is a Second Lien Loan, has a Combined
Loan-to-Value Ratio of 100% or less and with respect to which the related first
lien loan is owned by the Seller.
For the purpose of this definition:
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(x) A Mortgage Loan is "eligible for delivery" under a Take-Out
Commitment if (i) it is designated to be transferred to a Governmental
Authority, (ii) the underwriting criteria utilized and the Mortgage Loan
Collateral either match, or are in respect of interest rates (which rates must
bear a relationship to prevailing current market rates of interest for loans
with similar maturities), term, product type and delivery period representative
of the terms for purchase that are specified in a Take-Out Commitment, and (iii)
the aggregate outstanding principal of all such Mortgage Loans is not more than
the aggregate Take-Out Commitments' unutilized amount (i.e. taking in account
all such Mortgage Loans already allocated to the aggregate Take-Out Commitments
for purposes of determining Eligible Mortgage Loans whether or not already
delivered by the Buyer to the Collateral Agent).
(y) A Mortgage Loan is "designated for delivery" under a Take-Out
Commitment if (i) it is designated to be transferred to any entity other than a
Governmental Authority and (ii) the underwriting criteria utilized in approving
such Mortgage Loan conform to the underwriting criteria, and the terms of
repayment (including interest rate and "term to maturity") and other terms and
conditions of the Mortgage Loan Collateral match the specifications of that
specific Take-Out Commitment that designates that particular Mortgage Loan for
purchase.
"Employee Plan" means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by the Seller.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any corporation, trade or business that is,
along with the Performance Guarantor, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Sections 414(b), (c), (m) and (o) of the Code, or Section 4001 of ERISA.
"Event of Default" has the meaning specified in Section 7.01.
"Facility" means the borrowing facility provided by the Lenders as
described in Section 2.1 of the Restated Loan Agreement.
"Facility Termination Date" means the earliest to occur of:
(a) August 23, 2005, or such earlier date determined in accordance with
Section 2.1(b) of the Restated Loan Agreement, or
(b) the date on which the Maximum Facility Amount is terminated by the
Borrower pursuant to Section 2.1(d) of the Restated Loan Agreement, and
(c) the date, on or after the occurrence of an Event of Default,
determined pursuant to Section 8.1 of the Restated Loan Agreement.
"▇▇▇▇▇▇ ▇▇▇" means the government sponsored enterprise formerly known
as the Federal National Mortgage Association, or any successor thereto.
14
"Fee Letters" is defined in the Restated Loan Agreement.
"FHA" means the Federal Housing Administration, or any successor
thereto.
"FHA Loan" means a Mortgage Loan, the ultimate payment of which is
partially or completely insured by the FHA or with respect to which there is a
current, binding and enforceable commitment for such insurance issued by the
FHA.
"Financial Officer" means (i) with respect to the Seller, its chief
financial officer, treasurer or a vice president having the knowledge and
authority necessary to prepare and deliver the financial statements and reports
required pursuant to Sections 5.1(b) and (d) and (ii) with respect to the
Performance Guarantor, the chief financial officer, the vice president-treasurer
or the senior vice president-finance.
"First Lien Mortgage Loan" means a loan secured by a perfected first
lien mortgage on real property.
"Fitch" means Fitch, Inc., and any successor thereto.
"▇▇▇▇▇▇▇ Mac" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"▇▇▇▇▇▇ Mae" means the Government National Mortgage Association, or any
successor thereto.
"Governmental Authority" means any nation or government, any agency,
department, state or other political subdivision thereof, or any instrumentality
thereof, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government. Governmental
Authority shall include, without limitation, each of ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇,
FHA, HUD, VA and ▇▇▇▇▇▇ Mae.
"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, permit,
certificate, license, authorization or other requirement (including, without
limitation, any of the foregoing that relate to energy regulations and
occupational, safety and health standards or controls and any hazardous
materials laws) of any Governmental Authority that has jurisdiction over the
Seller or any of its Property.
"Group Bank" means (1) with respect to Atlantic, CL New York, each Bank
that has entered into an Assignment and Acceptance with CL New York, including
Lloyds, and each assignee (directly or indirectly) of any such Bank, which
assignee has entered into an Assignment and Acceptance and (2) with respect to
Jupiter, Bank One, each Bank that has entered into an Assignment and Acceptance
with Bank One and each assignee (directly or indirectly) of any such Bank, which
assignee has entered into an Assignment and Acceptance.
15
"Hedge Report" means, with respect to any Conforming Loans included in
the Eligible Mortgage Collateral that is to be sold to a Governmental Authority,
a report prepared by the Servicer and pursuant to Section 3.6 of the Restated
Loan Agreement, showing, as of the close of business on the previous Business
Day, all trades that have been assigned to the Administrative Agent, for the
benefit of holders of the Obligations, and the following information with
respect to such trades: (i) trade counterparty, (ii) trade amount, (iii) coupon,
(iv) price, (v) type of security, (vi) date of trade, and (vii) such other
information as the Administrative Agent may reasonably request in the form of
Exhibit K to the Restated Loan Agreement.
"HUD" means the Department of Housing and Urban Development, or any
successor thereto.
"Indebtedness" means, for any Person, without duplication, and at any
time, (a) all obligations required by GAAP to be classified on such Person's
balance sheet as liabilities, (b) obligations secured (or for which the holder
of the obligations has an existing contingent or other right to be so secured)
by any Lien existing on property owned or acquired by such Person, (c)
obligations that have been (or under GAAP should be) capitalized for financial
reporting purposes, and (d) all guaranties, endorsements, and other contingent
obligations with respect to obligations of others.
"Indemnified Amounts" has the meaning specified in Section 8.01.
"Indemnified Party" has the meaning specified in Section 8.01.
"Interest Period" is defined in Section 2.15 of the Restated Loan
Agreement.
"Issuer" means any of Atlantic, Jupiter or the Seasonal Issuer.
"Jumbo Loan" means a Mortgage Loan (other than a Conforming Loan) that
(1) is underwritten by an Approved Investor (other than ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac
or ▇▇▇▇▇▇ Mae), (2) matches all applicable requirements for purchase under the
requirements of a Take-Out Commitment issued for the purchase of such Mortgage
Loan, and (3) differs from a Conforming Loan solely because the principal amount
of such Mortgage Loan exceeds the limit set for Conforming Loans by ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac from time to time, and (4) is a First Lien Mortgage Loan.
"Jupiter" means Jupiter Securitization Corporation and its successors
and assigns.
"Lenders" means, collectively, the Issuers and the Banks, including the
Seasonal Issuer and the Seasonal Bank.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (whether statutory, consensual or otherwise), or
other security arrangement of any kind (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the uniform commercial code or comparable law
of any jurisdiction in respect of any of the foregoing).
16
"Lloyds" means Lloyds TSB Bank plc and its successors and assigns.
"Loan-to-Value Ratio" means, with respect to any Mortgage Loan, the
fraction, expressed as a percentage found by dividing the original principal
balance of a Mortgage Loan by the value of the Mortgage Loan, such value being
measured by (i) the appraised value of such property at such time, if the
Mortgage Loan is a refinance of an existing lien or (ii) the lower of the sales
price of the related property at the time of origination of the Mortgage Loan or
the appraised value of such property at such time, if the Mortgage Loan is a
purchase money loan.
"Managing Agents" means, with respect to Atlantic, CL New York or any
successor managing agent designated by such party; and, with respect to Jupiter,
Bank One or any successor managing agent designated by such party.
"Margin Deficit" is defined in Section 2.03(b) hereof.
"Market Value" means at the time determined, for any (a) Mortgage Loan
(other than a Non-Conforming Loan), the market value of such Mortgage Loan based
upon the then most recent posted net yield for 30-day mandatory future delivery
furnished by ▇▇▇▇▇▇ ▇▇▇ and published and distributed by Telerate Mortgage
Services, or, if such posted net yield is not available from Telerate Mortgage
Services, such posted net yield obtained by the Administrative Agent from ▇▇▇▇▇▇
Mae, or (b) Non-Conforming Loan, or any other Mortgage Loan while the posted
rate is not available from ▇▇▇▇▇▇ ▇▇▇, the value determined by the
Administrative Agent in good faith.
"Material Adverse Effect" means, with respect to any Person, any
material adverse effect on (i) the validity or enforceability of the Master
Repurchase Agreement, this Agreement, the Notes or any other Transaction
Document, (ii) the business, operations, total Property or financial condition
of such Person, (iii) the Transferred Mortgage Assets taken as a whole, (iv) the
enforceability of the purchases of Mortgage Assets under this Agreement free of
any Adverse Claims, or (v) the ability of such Person to fulfill its obligations
under this Agreement or any other Transaction Document.
"Maximum Facility Amount" is defined in the Restated Loan Agreement..
"MERS" means Mortgage Electronic Registration Systems, Inc., a Delaware
corporation.
"MERS Designated Mortgage Loan" means a Mortgage Loan registered to or
by the Originator on the MERS electronic mortgage registration system.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and any successor
thereto.
"Mortgage" means a mortgage or deed of trust or other security
instrument creating a Lien on real property, on a standard form as approved by
▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae or such other form as the Seller
determines is satisfactory for any Approved Investor unless otherwise directed
by the Buyer or its assignee and communicated to the Collateral Agent.
"Mortgage Assets" means, collectively, all of the Mortgage Loans and
all Take-Out Commitments.
17
"Mortgage File" means the mortgage documents pertaining to a particular
Mortgage Loan and any additional documents required to be included in or added
to the Mortgage File pursuant to the Restated Loan Agreement.
"Mortgage Loan" means a loan evidenced by a Mortgage Note and secured
by a Mortgage, the beneficial interest of which has been acquired by the Buyer
from the Seller by purchase pursuant to this Agreement (with the record owner
thereof being the Seller or, in the case of a MERS Designated Mortgage Loan,
MERS as nominee for the Seller, and its successors and assigns).
"Mortgage Loan Collateral" means all Mortgage Notes and related
Principal Mortgage Documents, Other Mortgage Documents.
"Mortgage Note" means a promissory note, on a standard form approved by
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae or such other form as the Seller
determines is satisfactory for any Approved Investor unless otherwise directed
by the Buyer or its assignee and communicated to the Collateral Agent.
"Mortgage Origination Date" means, with respect to each Mortgage Loan,
the date that is the later of (1) the date of the Mortgage Note or (2) the date
such Mortgage Loan was funded and disbursed to or at the direction of the
Obligor.
"Multiemployer Plan" means a multiemployer plan defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which a Seller or
any ERISA Affiliate is making or has made (or is accruing or has accrued an
obligation to make) contributions.
"Net Worth" of a Person means, as of any date of determination, the
total stockholder's equity (including capital stock, additional paid-in capital
and retained earnings after deducting treasury stock) that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
but excluding the value of any investment made by such Person in an
unconsolidated Subsidiary.
"No Asset No Income Loan" means an Alt-A Loan that is underwritten on a
"no asset no income" basis, meaning that the Seller does not verify the
Obligor's assets or income.
"Non-Conforming Loan" means a Jumbo Loan, an Alt-A Loan or a
Second-Lien Loan.
"Note" means each or any of the promissory notes executed by the Buyer,
substantially in the form of Exhibits E-1, E-2, and E-3 of the Restated Loan
Agreement, together with all renewals, extensions, and replacements for any such
note.
"Obligations" means any and all present and future indebtedness,
obligations, and liabilities of the Buyer, as the borrower, to any of the
Lenders, the Collateral Agent, the Managing Agents, each Affected Party (as
defined in the Restated Loan Agreement), each Indemnified Party and the
Administrative Agent, and all renewals, rearrangements and extensions thereof,
or any part thereof, arising pursuant to this Restated Loan Agreement or any
other Transaction Document, and all interest accrued thereon, and attorneys'
fees and other costs incurred in the drafting, negotiation, enforcement or
collection thereof, regardless of whether
18
such indebtedness, obligations, and liabilities are direct, indirect, fixed,
contingent, joint, several or joint and several.
"Obligor" means (i) with respect to each Mortgage Note included in the
Collateral, the obligor on such Mortgage Note and (ii) with respect to any other
agreement included in the Mortgage Assets, any person from whom the Seller is
entitled to performance.
"Other Mortgage Documents" is defined in Section 3.2(c) to the Restated
Loan Agreement.
"Outstanding Balance" means as of any date of determination (A) with
respect to each Mortgage Loan, an amount equal to the lesser of: (i) the lesser
of the original principal amount or the acquisition price of such Mortgage Loan
paid by the Seller on the closing and funding of such Mortgage Loan; and (ii)
for each Mortgage Loan, the amount determined by multiplying (a) the weighted
average purchase price (expressed as a percentage) that Approved Investors are
committed to pay, pursuant to Take-Out Commitments, for all Eligible Mortgage
Loans, as shown on the most recent Hedge Report, multiplied by the outstanding
principal balance of such Eligible Mortgage Loan.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Performance Guarantor" means Pulte.
"Person" means any individual, corporation (including a business
trust), limited liability company, partnership, joint venture, association,
joint stock company, trust, unincorporated organization, Governmental Authority,
or any other form of entity.
"Pricing Rate" has the meaning specified in Section 2.02.
"Principal Mortgage Documents" is defined in Section 3.2(b) to the
Restated Loan Agreement.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Pulte" means Pulte Homes, Inc. (formerly known as Pulte Corporation),
a Michigan corporation, and its successors and assigns.
"Pulte Mortgage Corporation" has the meaning set forth in the preamble
to this Agreement.
"Purchase" means a purchase by the Buyer of Mortgage Assets from a
Seller pursuant to Article II.
"Purchase Date" has the meaning specified in Section 2.02(a).
"Purchase Price" for any Purchase means an amount equal to the
Outstanding Balance of the Mortgage Assets that are the subject of such
Purchase.
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"Purchase Request" has the meaning specified in Section 2.02(a).
"Purchased Mortgage Asset" means any Mortgage Asset which has been
purchased by the Buyer pursuant to Section 2.02.
"Repurchase Date" is defined in Section 2.02(a) hereto.
"Repurchase Price" the price at which the Purchased Mortgage Assets are
to be transferred from Buyer to Seller upon termination of a transaction, which
will be determined in each case as the sum of the Purchase Price and the Price
Differential as of the end of the related Interest Period.
"Requirement of Law" as to any Person means the articles of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, statute, code, ordinance, order, rule, regulation,
judgment, decree, injunction, franchise, permit, certificate, license,
authorization or other determination, direction or requirement (including,
without limitation, any of the foregoing that relate to energy regulations and
occupational, safety and health standards or controls and any hazardous
materials laws) of any Governmental Authority, in each case applicable to or
binding upon such Person or any of its Property or to which such Person or any
of its Property is subject.
"Restated Assignment of Account" is defined in the Restated Collateral
Agency Agreement.
"Restated Collateral Agency Agreement" means the Amended and Restated
Collateral Agency Agreement, dated as of the date hereof, among the Buyer, as
borrower, the Collateral Agent and the Administrative Agent, substantially in
the form of Exhibit D to the Restated Loan Agreement.
"Restated Loan Agreement" means the Amended and Restated Loan
Agreement, dated as of the date hereof, by and among the Buyer, as the Borrower,
the Issuers parties thereto, the Banks parties thereto, the Managing Agents
parties thereto, the Administrative Agent and the Servicer, as amended, modified
or supplemented from time to time.
"Restated Originator Performance Guaranty" means the Amended and
Restated Originator Performance Guaranty, in the form attached the Restated Loan
Agreement as Exhibit G-2, made by the Performance Guarantor in favor of the
Buyer, as borrower, and assigned to the Administrative Agent for the benefit of
the Lenders.
"Restated Performance Guaranties" means, collectively, the Restated
Servicer Performance Guaranty and the Restated Originator Performance Guaranty.
"Restated Servicer Performance Guaranty" means the Amended and Restated
Servicer Performance Guaranty, in the form attached to the Restated Loan
Agreement as Exhibit G-1, made by the Performance Guarantor in favor of the
Administrative Agent.
"Restated Subordination Agreement" means the Amended and Restated
Subordination Agreement, substantially in the form attached as Exhibit B to the
Restated Loan Agreement,
20
executed by the Performance Guarantor and certain of its Affiliates in favor of
the Buyer and the Administrative Agent for the benefit of the holders of the
obligations.
"S&P" means Standard & Poor's Rating Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"Seasonal Bank" means initially Bank One, in its capacity as a bank
under the Seasonal Facility, and its successors or assigns.
"Seasonal Facility" means the borrowing facility provided by the
Seasonal Lenders as described in Section 2.20 of this Restated Loan Agreement.
"Seasonal Facility Amount" means $50,000,000 as such amount may be
reduced pursuant to Section 2.20(b) of the Restated Loan Agreement.
"Seasonal Issuer" means Jupiter, in its capacity as an issuer under the
Seasonal Facility, and its successors or assigns.
"Seasonal Period" means a period including (a) the last five (5) days
of March through the first twenty-five (25) days of April, (b) the last five (5)
days of June through the first twenty-five (25) days of July, (c) the last five
(5) days of September through the first twenty-five (25) days of October, or (d)
the last five (5) days of December through the first twenty-five (25) days of
January; provided that a Seasonal Period will not occur unless the Buyer
notifies the Administrative Agent, the Collateral Agent and the Seasonal Lenders
five days in advance of such Seasonal Period that the Buyer will use the
Seasonal Facility during such Seasonal Period.
"Seasonal Lenders" means the Seasonal Issuer and the Seasonal Bank.
"Seasoned Mortgage Loan" means a Mortgage Loan with a Mortgage
Origination Date that is more than 180 days prior to the current date.
"Second Lien Loan" means a loan secured by a perfected Mortgage that is
subordinate to one other mortgage lien held by the Seller on the related
mortgaged property.
"Servicer" means at any time the Person then authorized pursuant to
Section 11.1 of the Restated Loan Agreement to service, administer and collect
the Transferred Mortgage Assets. The initial Servicer shall be Pulte Mortgage
Corporation.
"Settlement Date" means (a) for purposes of determining fees set forth
in the Fee Letters, (i) the 10th day of each of October, January, April and
July, commencing October 10, 2002 or, if such day is not a Business Day, the
next succeeding Business Day, or (ii) on and after the Facility Termination
Date, the 10th day of each calendar month or, if such day is not a Business Day,
the next succeeding Business Day, provided, however, that the Administrative
Agent may, with the consent of the Managing Agents, by notice to the Buyer and
the Servicer, select other days to be Settlement Dates (including days occurring
more frequently than once per month) and (b) for all other purposes, the 10th
day of each calendar month or, if such day is not a Business Day, the next
succeeding Business Day, commencing September 10, 2002, provided, however, on
and after the Facility Termination Date, the Administrative Agent may, with the
consent of
21
the Managing Agents, by notice to the Buyer and the Servicer, select other days
to be Settlement Dates (including days occurring more frequently than once per
month).
"Special Borrowing" is defined in Section 2.03(c) to the Restated Loan
Agreement.
"Special Mortgage Loan" is defined in Section 2.3(c) to the Restated
Loan Agreement.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by such Person, or one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries.
"Super Jumbo Loan" means a Jumbo Loan having an original principal
balance equal to or in excess of $650,000 but less than $1,000,000.
"Take-Out Commitment" means, a current, valid, binding, enforceable,
written commitment, issued by an Approved Investor, to purchase one or more
Mortgage Loans from the Seller prior to the date that is 120 days (or 180 days
to the extent Collateral Value may include Mortgage Loans that have been
Eligible Mortgage Loans for more than 120 days pursuant to paragraph (f) of the
definition of Collateral Value) from the date that such Mortgage Loan first
becomes an Eligible Mortgage Asset and at a specified price and in amounts, form
and substance reasonably satisfactory to the Managing Agents, which commitment
is not subject to any term or condition (i) that is not customary in commitments
of like nature or (ii) that, in the reasonably anticipated course of events,
cannot be fully complied with prior to the expiration thereof, which commitment
has been assigned to the Buyer (partial assignments being permitted so long as
the amount assigned (together with all other Take-Out Commitments) fully covers
the amount of the Eligible Mortgage Assets); provided, that upon receipt of the
actual written confirmation (each, a "Trade Confirmation") of such trade duly
executed by the Seller and the trade counterparty (such Trade Confirmation being
held in trust for the Collateral Agent pursuant to Section 3.2(c) of the
Restated Loan Agreement) and promptly upon request of the Administrative Agent,
the Seller must provide such trade confirmation to the Administrative Agent. The
Administrative Agent, on behalf of the Lenders, shall have the right, without
notice, to review such Trade Confirmation at the office of, and with the
officers of, the Seller during normal business hours.
"Take-Out Commitment Documents" means (1) with respect to any
Conforming Loans, copies of all Take Out Commitments or an executed original
assignment of trade as described in the definition of "Take Out Commitment"; and
(2) with respect to Non-Conforming Loans, copies of all Take Out Commitments.
"Term" means three hundred sixty-four (364) days from the date of this
Agreement.
"Transaction Document" means any of this Agreement, the assignments
delivered pursuant to Section 3.02(a), and any and all other agreements or
instruments now or hereafter executed and delivered by or on behalf of the
Seller in connection with this Agreement or the Master Repurchase Agreement, as
any of such documents may be renewed, amended, restated or supplemented from
time to time.
"Transferred Mortgage Asset" means a Purchased Mortgage Asset.
22
"Transferred Mortgage Loan" means a Mortgage Loan included in the
Transferred Mortgage Assets.
"UCC" means the Uniform Commercial Code as adopted in the applicable
state, as the same may hereafter be amended.
"Uncovered Mortgage Loan" means a Mortgage Loan that would be an
Eligible Mortgage Loan but for the expiration, forfeiture, termination, or
cancellation of, or default under, the relevant Take-Out Commitment.
"VA" means the Department of Veterans Affairs, or any successor
thereto.
"VA Loan" means a Mortgage Loan, the payment of which is partially or
completely guaranteed by the VA under the Servicemen's Readjustment Act of 1944,
as amended, or Chapter 37 of Title 38 of the United States Code or with respect
to which there is a current binding and enforceable commitment for such a
guaranty issued by the VA.
Section 1.02. Other Terms.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC, and not
specifically defined herein, are used herein as defined in such Article 9.
ARTICLE II
AMOUNTS AND TERMS OF PURCHASES
Section 2.01. Facility.
(a) The first sentence of Section 1 of the Master Repurchase
Agreement is amended in its entirety by replacing it with the following:
"From time to time prior to the occurrence and
continuance of an Event of Default and prior to the Facility
Termination Date, the Seller may present for transfer to Buyer
Mortgage Assets that are Eligible Mortgage Assets against the
transfer of funds by Buyer with a simultaneous agreement by
Buyer to transfer to the Seller such Assets at a date certain
or on demand, against the transfer of funds by the Seller, and
at each such time of presentation Buyer will enter into such
Transaction."
(b) Section 1 is hereby further amended by adding the following at
the end thereof:
"Without limiting any rights of Buyer under this
Master Repurchase Agreement, no Transaction shall be for a
Purchase Price such that the cash portion thereof will be less
than $5,000,000 or an integral multiple of $10,000 in excess
thereof."
23
(c) Every reference in the Master Repurchase Agreement to
"Securities" shall be replaced by "Mortgage Assets." Every reference in the
Master Repurchase Agreement to "Purchased Securities" shall be replaced by
"Purchased Mortgage Assets." Every reference in the Master Repurchase Agreement
to "Additional Purchased Securities" shall be replaced by "Additional Purchased
Mortgage Assets."
Section 2.02. Making Purchases.
(a) Subparagraph 3(b) of the Master Repurchase Agreement is
amended by deleting the subparagraph in its entirety and replacing it with the
following:
Purchases. Each Transaction shall be initiated by
request from the Seller to the Buyer given no later than 12:00
noon (eastern time) on the Business Day prior to the date of
Purchase. Each such request for a Purchase (each a "Purchase
Request") shall specify the date of such Purchase (which shall
be a Business Day), the Mortgage Assets included in such
Purchase and the Purchase Price for such Purchase. The Buyer
shall promptly notify the Seller whether it has determined to
make such Purchase and, if so, shall deliver a written
confirmation (each, a "Confirmation"). On the date of each
Purchase (each a "Purchase Date"), the Buyer shall, upon
satisfaction of the applicable conditions set forth in Article
III, pay the Purchase Price for such Purchase by means of any
one or a combination of the following: (i) a deposit in same
day funds to the Seller's account designated by the Seller or
(ii) an increase in the Deferred Purchase Price. The
allocation of the Purchase Price as among such methods of
payment shall be subject in each instance to the approval of
the Buyer and the Seller.
The "Repurchase Date" for each Transaction shall be
the earlier of (i) the date set forth in the applicable
Confirmation and (ii) the date determined by application of
Paragraph 11 of the Master Repurchase Agreement. The "Pricing
Rate" for each Transaction shall be set forth on the
Confirmation; provided that, upon the occurrence of and during
the continuance of an Event of Default, the Pricing Rate shall
equal the Default Rate. The Confirmation, together with this
Master Repurchase Agreement, shall constitute conclusive
evidence of the terms agreed between Buyer and Seller with
respect to the Transaction to which the Confirmation relates,
unless with respect to the Confirmation specific objection is
made promptly after receipt thereof. In the event of any
conflict between the terms of such Confirmation and this
Master Repurchase Agreement, this Master Repurchase Agreement
shall prevail.
(b) Subparagraph 3(c) of the Master Repurchase Agreement is
amended by replacing the first sentence of Paragraph 3(c) with the following:
In the case of Transactions terminable upon demand, such
demand by the Seller shall be for a repurchase of all Purchased
Mortgage Assets subject to the related Transaction and shall be made no
later than 11:00 a.m. New York City time on the Business Day
immediately preceding the day on which such termination will be
effective, which termination shall also be on a Business Day.
24
(c) Paragraph 3 of the Master Repurchase Agreement is amended by
adding the following language as a new Subparagraph 3(d):
(d) This Master Repurchase Agreement shall continue in effect
until the expiration of the Facility Termination Date.
Section 2.03. Margin Maintenance.
Subparagraph 4 of the Master Repurchase Agreement is amended in its
entirety to read as follows:
(a) Daily until the expiration of the Facility Termination Date
(or less frequently if the Buyer, in its sole and absolute discretion, so
elects), the Seller, as applicable (or Servicer on Buyer's behalf) will
determine (i) the aggregate Collateral Value of all Purchased Mortgage Assets
held by Buyer, (ii) the Repurchase Price as of such date, and the Maximum
Facility Amount as of such date. Without limiting the foregoing, the Seller
shall deliver to Buyer, at any time and from time to time, information in its
possession in the ordinary course of its business with respect to the Purchased
Mortgage Assets sold by it to assist Buyer in ascertaining the Collateral Value
of such Purchased Mortgage Assets.
(b) If, on any date, the aggregate Repurchase Price exceeds the
total Collateral Value of all Eligible Mortgage Assets (a "Margin Deficit"),
Buyer may, in its sole and absolute discretion, by notice to the Seller (a
"Margin Call"), require the Seller to transfer to Buyer cash or additional
Purchased Mortgage Assets that are reasonably acceptable to Buyer ("Additional
Purchased Mortgage Assets") to eliminate such deficiency.
(c) Upon receipt of notice from Buyer at or prior to 11:00 a.m.
New York City time (which may be transmitted by facsimile), the Seller, as
applicable, in its sole discretion, shall transfer either cash or the Additional
Purchased Mortgage Assets no later than the close of business on the Business
Day immediately following the date on which a Margin Call is given. Any cash
transferred to Buyer pursuant hereto shall be held by Buyer until the Repurchase
Date and shall be applied against the Repurchase Price on the Repurchase Date.
(d) Buyer's election, in its sole and absolute discretion, not to
make a Margin Call at any time there is a Margin Deficit shall not in any way
limit or impair its right to make a Margin Call at any time a Margin Deficit
exists.
Section 2.04. Collections.
Paragraph 5 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence thereof:
Notwithstanding the foregoing and except as provided in
paragraph 11 of this Master Repurchase Agreement, the Seller shall hold
for the benefit of, and in trust for, Buyer all income, including
without limitation all scheduled and unscheduled principal and interest
payments or any other income (including without limitation, tax escrow
payments), received by or on behalf of the Seller with respect to such
Purchased Mortgage Assets sold by it (collectively,
25
"Purchased Asset Income"). To the extent required under the Restated
Loan Agreement, the Seller shall deposit the Purchased Asset Income
(other than any Obligor's escrow payments) in the Collection Account.
On each Settlement Date, the Buyer shall pay to the Seller
accrued interest on the Deferred Purchase Price of the related
Purchased Mortgage Assets sold by it and the Buyer may, at its option,
prepay in whole or in part the principal amount of any such Deferred
Purchase Price; provided that each such payment shall be made solely
from (i) Collections of the related Transferred Mortgage Assets after
all other amounts then due from the Buyer under the Restated Loan
Agreement have been paid in full and all amounts then required to be
set aside by the Buyer or the Servicer under the Restated Loan
Agreement have been so set aside or (ii) excess cash flow from
operations of the Buyer which is not required to be applied to the
payment of other obligations of the Buyer; and provided further, that
no such payment shall be made at any time when an Event of Default
shall have occurred and be continuing. At such time following the
Facility Termination Date when all principal, interest and other
amounts owed by the Buyer under the Restated Loan Agreement shall have
been paid in full, the Buyer shall apply, on each Settlement Date, all
Collections of Transferred Mortgage Assets deposited to the Collection
Account pursuant to this Paragraph 5 (and not previously distributed)
ratably as between the Seller first to the payment of accrued interest
on each related Deferred Purchase Price, and then to the reduction of
the principal amount of each related Deferred Purchase Price.
Section 2.05. Repurchase or Substitution Procedures.
(a) Upon discovery by the Seller or the Buyer of a breach of any
of the representations and warranties made by the Seller in Section 4.01(t) of
this Agreement with respect to any Transferred Mortgage Asset, such party shall
give prompt written notice thereof to the other party, as soon as practicable
and in any event within three Business Days following such discovery. The Seller
shall, upon not less than two Business Days' notice from the Buyer or its
assignee or designee, repurchase such Transferred Mortgage Asset on the next
succeeding Settlement Date for a repurchase price equal to the Repurchase Price
of such Transferred Mortgage Asset. Each repurchase of a Transferred Mortgage
Asset shall include the Mortgage Loan Collateral with respect to such
Transferred Mortgage Asset. The proceeds of any such repurchase shall be deemed
to be a Collection in respect of such Transferred Mortgage Asset. If the Seller
is not the Servicer, the Seller shall pay to the Servicer for deposit to the
Collection Account on or prior to the next Settlement Date the Repurchase Price
required to be paid pursuant to this subsection. If the Seller is the Servicer,
the Seller shall deposit such Repurchase Price to the Collection Account on or
prior to the next Settlement Date.
(b) Upon discovery by the Seller or the Buyer of a breach by the
Seller of its covenant in Section 5.23 of this Agreement with respect to any
Special Mortgage Loan, such party shall give prompt written notice thereof to
the other parties, as soon as practicable and in any event within three Business
Days following such discovery. The Seller shall, upon not less than two Business
Days' notice from the Buyer or its assignee or designee or from the Collateral
Agent on its behalf, repurchase such Special Mortgage Loan for a repurchase
price equal to the
26
Repurchase Price of such Special Mortgage Loan. Each repurchase of a Special
Mortgage Loan shall include the Mortgage Loan Collateral with respect to such
Special Mortgage Loan. The proceeds of any such repurchase shall be deemed to be
a Collection in respect of such Special Mortgage Loan. If the Seller is not the
Servicer, the Seller shall pay to the Servicer for deposit to the Collection
Account on or prior to the repurchase date the Repurchase Price required to be
paid pursuant to this subsection. If the Seller is the Servicer, the Seller
shall deposit such Repurchase Price to the Collection Account on or prior to the
next Settlement Date.
(c) If a Mortgage Note has been withdrawn for correction pursuant
to Section 6.02 of this Agreement and the Seller has not delivered the corrected
Mortgage Note to the Collateral Agent within twenty calendar days after such
withdrawal, the Seller shall, upon not less than two Business Days' notice from
the Buyer or its assignee or designee or from the Collateral Agent on its
behalf, repurchase the related Mortgage Loan for a repurchase price equal to the
Repurchase Price of such Mortgage Loan. Each repurchase of a Mortgage Loan shall
include the Mortgage Loan Collateral with respect to such Mortgage Loan. The
proceeds of any such repurchase shall be deemed to be a Collection in respect of
such Mortgage Loan. If the Seller is not the Servicer, the Seller shall pay to
the Servicer for deposit to the Collection Account on or prior to the repurchase
date the Repurchase Price required to be paid pursuant to this subsection. If
the Seller is the Servicer, the Seller shall deposit such Repurchase Price to
the Collection Account on or prior to the next Settlement Date.
(d) To the extent that any of the events occur that require the
Seller to repurchase pursuant to Subsections 2.05(a), 2.05(b) and 2.05(c), but
only so long as a Margin Deficit does not exist, the Seller may elect not to
repurchase the effected purchased loans by delivering written notice to the
Buyer, its successors and assigns.
Section 2.06. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by the Seller hereunder
shall be paid or deposited no later than 11:00 a.m. (eastern time) on the day
when due in same day funds to an account designated by the Buyer from time to
time, which account shall initially be the Collection Account.
(b) The Seller shall, to the extent permitted by law, pay to the
Buyer interest on any amount not paid or deposited by such the Seller (whether
as Servicer or otherwise) when due hereunder at an interest rate per annum equal
to 2% per annum above the Alternate Base Rate, payable on demand.
(c) All computations of interest and all computations of fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
27
Section 2.07. Intent of the Seller and the Buyer.
Paragraph 6 of the Master Repurchase Agreement is hereby deleted and
replaced with the following:
The Seller and the Buyer have structured this Agreement with
the intention that each Purchase of Mortgage Assets hereunder be
treated as a sale of such Mortgage Assets by the Seller to the Buyer
for all purposes. The Seller and the Buyer shall record each related
Purchase as a sale or purchase, as the case may be, on its books and
records, and reflect each related Purchase in its financial statements
and tax returns as a sale or purchase, as the case may be. In the event
that, contrary to the mutual intent of the Seller and the Buyer, any
Purchase of Mortgage Assets hereunder is not characterized as a sale or
absolute transfer, the Seller shall, effective as of the date hereof,
be deemed to have granted (and the Seller hereby does grant) to the
Buyer a first priority security interest in and to any and all Mortgage
Assets, the related Mortgage Loan Collateral and the proceeds thereof
to secure the repayment of all amounts advanced to the Seller hereunder
with accrued interest thereon, and this Agreement shall be deemed to be
a security agreement.
Section 2.08. No Segregation of Assets.
Paragraph 8 of the Master Repurchase Agreement is amended by deleting
Paragraph 8 in its entirety and replacing it with the following:
Upon transfer of the Mortgage Loans to Buyer as set forth in
Paragraph 3(a) of this Master Repurchase Agreement and until
termination of any related Transactions as set forth in Paragraphs 3(c)
or 11 of this Master Repurchase Agreement, ownership of each Mortgage
Loan, including each document in the related Mortgage File, is vested
in Buyer. Upon transfer of the Mortgage Loans to Buyer as set forth in
Paragraph 3(a) of this Master Repurchase Agreement and until
termination of any Transactions as set forth in paragraphs 3(c) or 11
of this Master Repurchase Agreement and prior to the recordation of the
assignments of mortgage by the Collateral Agent as provided for in the
Restated Collateral Agency Agreement, record title in the name of the
Seller or in the case of a MERS Designated Mortgage Loan MERS as
nominee for the beneficial owner to each Mortgage shall be retained
thereby in trust, for the benefit of Buyer, for the sole purpose of
facilitating the servicing and the supervision of the servicing of the
Mortgage Loans. Nothing in this Master Repurchase Agreement shall
preclude Buyer from engaging in repurchase transactions with the
Purchased Mortgage Assets or otherwise pledging or hypothecating the
Purchased Mortgage Assets without the prior consent of the Seller, but
no such transaction or provision hereof or provision of the Restated
Collateral Agency Agreement shall relieve Buyer of its obligations to
transfer Purchased Mortgage Assets (and, with respect to the Mortgage
Loans, the same Mortgage Loans and not substitutes therefor) to Seller
pursuant and subject to Paragraphs 3, 4 or 11 hereof. Upon termination
of any Transactions as set forth in Paragraph 3(c) of this Master
▇▇▇▇▇▇▇▇▇▇
▇▇
Agreement, Buyer agrees to execute promptly endorsements of the
mortgage notes, assignments of the mortgages and UCC-3 assignments,
releases or terminations related to such Transactions, to the extent
that such documents are prepared by the Seller for Buyer's execution,
are delivered to Buyer by the Seller and are necessary and appropriate,
as reasonably determined by the Seller, to reconvey, without recourse,
to the Seller and perfect title of like tenor to that conveyed to Buyer
to the related Mortgage Loans. Buyer shall provide cooperation in
assisting and directing the Collateral Agent to facilitate such
preparation (without expense to Buyer).
Notwithstanding anything to the contrary set forth in this
Master Repurchase Agreement, in no event shall Purchased Mortgage
Assets remain in the custody of the Seller or any affiliate of the
Seller, except as permitted under the Restated Collateral Agency
Agreement.
Section 2.09. Substitution.
Paragraph 9 of the Master Repurchase Agreement is amended by deleting
the existing Paragraph 9 in its entirety and replacing it with the following
language:
(a) In the case of any Transaction for which the Repurchase Date
is other than the Business Day immediately following the Purchase Date and with
respect to which the Seller does not have any existing right to substitute
substantially the same Mortgage Assets for the Purchased Mortgage Assets, the
Seller shall have the right, subject to the proviso to this sentence, upon
notice to Buyer, which notice shall be given at or prior to noon (12:00 p.m.)
(New York time) on the preceding Business Day, to substitute substantially the
same Mortgage Assets for any Purchased Mortgage Assets; provided, however, that
Buyer, in its sole and absolute discretion, may elect, by the close of business
on the Business Day next following the Business Day on which notice is received
not to accept such substitution. In the event such substitution is accepted by
Buyer, such substitution shall be made by the Seller's transfer to Buyer of
additional Mortgage Assets, and after substitution, the substituted additional
Mortgage Loans shall be deemed to be Purchased Mortgage Assets. In the event
Buyer elects not to accept such substitution, Buyer shall offer the Seller the
right to terminate the Transaction. If the Seller elects to terminate such
Transaction (which election shall be made in writing within five (5) Business
Days of Buyer's offer to Seller of the right to terminate the transaction), the
date of termination will be determined in accordance with Paragraph 3(c) of the
Master Repurchase Agreement.
(b) In the event the Seller exercises its right to substitute or
terminate pursuant to subparagraph (a), the Seller shall be obligated to pay to
Buyer, by the close of the Business Day of such substitution or termination, as
the case may be, an amount equal to (A) Buyer's actual cost (including all fees,
expenses and commissions) of (i) entering into replacement Transactions; and
(ii) entering into or terminating hedge transactions, (B) to the extent Buyer
determines not to enter into replacement Transactions, the loss incurred by
Buyer directly arising or resulting from such substitution or termination and
(C) in the case of the termination of any Transaction, the related Repurchase
Price for such Purchased Mortgage Assets. The foregoing amounts shall be
determined and calculated solely by Buyer on a commercially reasonable basis.
29
ARTICLE III
CONDITIONS OF PURCHASES
Section 3.01. Conditions Precedent to Any Purchase from the Seller.
The initial Purchase of Mortgage Assets from the Seller hereunder is
subject to the conditions precedent that the Buyer shall have received on or
before the date of such Purchase the following, each (unless otherwise
indicated) dated such date, in form and substance reasonably satisfactory to the
Buyer:
(a) Certified copies of the resolutions of the Board of Directors
of the Seller approving this Agreement and certified copies of all documents
evidencing other necessary corporate action and governmental approvals, if any,
with respect to this Agreement.
(b) A certificate of the Secretary or Assistant Secretary of the
Seller certifying the names and true signatures of the officers of the Seller
authorized to sign this Agreement and the other documents to be delivered by it
hereunder.
(c) Acknowledgment copies or time stamped receipt copies of
financing statements, if any, and any amendments thereto, in form acceptable for
filing and duly filed on or before the date of any Purchase hereunder, naming
the Seller as the seller/debtor and the Buyer as the buyer/secured party, or
other similar instruments or documents, as the Buyer may deem necessary or
desirable under the UCC of all appropriate jurisdictions or other applicable law
to perfect the Buyer's ownership of and security interest in the Transferred
Mortgage Assets and Mortgage Loan Collateral and Collections with respect
thereto.
(d) Acknowledgment copies or time stamped receipt copies of
financing statements, if any, in form acceptable for filing and necessary to
release all security interests and other rights of any Person in the Transferred
Mortgage Assets and Mortgage Loan Collateral previously granted by the Seller.
(e) Completed requests for information, dated on or before the
date of any Purchase hereunder, listing all effective financing statements filed
in the jurisdictions referred to in subsection (c) above that name the Seller as
debtor, together with copies of such other financing statements (none of which
shall cover any Transferred Mortgage Assets or Mortgage Loan Collateral).
(f) A favorable opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ LLP,
counsel for the Seller, as to such matters as the Buyer may reasonably request.
(g) Fully executed originals of the Restated Loan Agreement,
Restated Subordination Agreement, the Restated Collateral Agency Agreement, and
the Restated Performance Guaranties.
Section 3.02. Conditions Precedent to All Purchases.
Each Purchase hereunder shall be subject to the further conditions
precedent that:
30
(a) prior to 12:00 noon (eastern time) on the Business Day prior
to the date of such Purchase, the Buyer and the Collateral Agent shall have
received a ▇▇▇▇ of sale and blanket assignment, in the form set forth in Exhibit
B hereto, and duly executed and delivered by the Seller, with respect to the
Mortgage Assets included in such Purchase;
(b) the Principal Mortgage Documents with respect to each Mortgage
Loan included in such Purchase, other than Special Mortgage Loans, shall have
been physically delivered to the possession of the Collateral Agent; provided
that if such Purchase includes Special Mortgage Loans, the Collateral Value of
such Special Mortgage Loans plus the Collateral Value of all Special Mortgage
Loans then owned by the Buyer shall not exceed thirty percent (30%) of the
Maximum Facility Amount (as defined in the Restated Loan Agreement) at such time
and during the first five and last five Business Days of any month fifty percent
(50%) of the Maximum Facility Amount (as defined in the Restated Loan Agreement)
at such time.
(c) Copies of the Take-Out Commitment Documents with respect to
Conforming Loans and Non-Conforming Loans shall have been delivered to the
possession of, or shall otherwise have been made available to, the Buyer or its
assignee;
(d) on the date of such Purchase the following statements shall be
true (and the Seller, by accepting the amount of such Purchase, shall be deemed
to have certified that):
(1) The representations and warranties contained in
Section 4.01 are correct in all material respects on and as of
the date of such Purchase as though made on and as of such
date,
(2) No event has occurred and is continuing, or would
result from such Purchase, that constitutes an Event of
Default or would constitute a Default, and
(3) The Buyer shall not have delivered to the Seller a
notice that the Buyer shall not make any further Purchases
hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations of the Seller.
Paragraph 10 of the Master Repurchase Agreement is amended by deleting
the existing language in its entirety and replacing it with the following: The
Seller represents and warrants as follows:
(a) Organization and Good Standing. It (i) is a corporation duly
incorporated and existing in good standing under the laws of the jurisdiction of
its incorporation, (ii) is duly qualified as a foreign corporation and in good
standing in all jurisdictions in which its failure to be so qualified could have
a Material Adverse Effect, (iii) has the corporate power and authority to own
its properties and assets and to transact the business in which it is engaged
and is or will be qualified in those states wherein it proposes to transact
business in the future and (iv) is in
31
compliance with all Requirements of Law, the failure to comply with which,
individually or in the aggregate, could have a Material Adverse Effect.
(b) Authorization and Power. It has the corporate power and
requisite corporate authority to execute, deliver and perform this Agreement and
the other Transaction Documents to which it is a party; it is duly authorized to
and has taken all corporate action necessary to authorize it to, execute,
deliver and perform this Agreement and the other Transaction Documents to which
it is a party and is and will continue to be duly authorized to perform this
Agreement and such other Transaction Documents.
(c) No Conflicts or Consents. Neither the execution and delivery
by it of this Agreement or the other Transaction Documents to which it is a
party, nor the consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or with the
terms and provisions thereof, will (i) contravene or conflict with any
Requirement of Law to which it is subject, except where such contravention or
conflict would not reasonably be expected to have a Material Adverse Effect, or
any indenture, mortgage, deed of trust, or other agreement or instrument to
which it is a party or by which it may be bound, or to which its Property may be
subject, except where such contravention or conflict would not reasonably be
expected to have a Material Adverse Effect, or (ii) result in the creation or
imposition of any Lien on the Property of the Seller (other than the sale of the
Transferred Mortgage Assets as contemplated by this Agreement).
(d) Enforceable Obligations. This Agreement and the other
Transaction Documents to which it is a party have been duly and validly executed
by it and are its legal, valid and binding obligations, enforceable in
accordance with their respective terms, except as limited by Debtor Laws.
(e) Full Disclosure. There is no fact known to it that it has not
disclosed to the Buyer that could have a Material Adverse Effect. Neither its
financial statements nor any Purchase Request, officer's certificate or
statement delivered by it to the Buyer in connection with this Agreement,
contains or will contain any untrue statement of material fact or omits or will
omit to state a material fact necessary to make such information not misleading.
(f) No Default. It is not in default under any loan agreement,
mortgage, security agreement or other material agreement or obligation to which
it is a party or by which any of its Property is bound, if such default would
also be a Default or an Event of Default under Section 11(v) of this Master
Repurchase Agreement.
(g) Litigation.
(i) Except as set forth on Schedule II to this
Agreement, there are no actions, suits or proceedings,
including arbitrations and administrative actions, at law or
in equity, either by or before any Governmental Authority, now
pending or, to its knowledge, threatened by or against it or
any of its Subsidiaries, and pertaining to any Governmental
Requirement affecting its Property or rights or any of its
Subsidiaries that if determined adversely to the Seller could
reasonably be expected to have a Material Adverse Effect.
32
(ii) Neither it nor any of its Subsidiaries is in
default with respect to any Governmental Requirements, which
default could reasonably be expected to have a Material
Adverse Effect.
(iii) The Seller is not liable on any judgment,
order or decree (or any series of judgments, orders, or
decrees) having an aggregate liability or $100,000 or more
that is not covered by insurance and that has not been paid,
stayed or dismissed within 30 days.
(h) Taxes. All tax returns required to be filed by it in any
jurisdiction have been filed and all taxes, assessments, fees and other
governmental charges upon it or upon any of its properties, income or franchises
have been paid prior to the time that such taxes could give rise to a Lien
thereon, unless protested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been established on its
books, except where such failure to file or pay would not reasonably be expected
to have Material Adverse Effect. It has no knowledge of any proposed tax
assessment against it that would have a Material Adverse Effect.
(i) Indebtedness. If the Servicer is the Seller or an Affiliate
thereof, the Servicer is in compliance with the maximum leverage test set forth
in Section 5.22 of this Agreement.
(j) Permits, Patents, Trademarks, Etc.
(i) It has all permits and licenses necessary
for the operation of its business, the absence of which would
reasonably be expected to have a Material Adverse Effect.
(ii) It owns or possesses (or is licensed or
otherwise has the necessary right to use) all patents,
trademarks, service marks, trade names and copyrights,
technology, know-how and processes, and all rights with
respect to the foregoing, that are necessary for the operation
of its business without any known material conflict with the
rights of others. The consummation of the transactions
contemplated hereby will not alter or impair any of such
rights.
(k) Status Under Certain Federal Statutes. It is not (i) a
"holding company," or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company," or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, (ii) a "public utility," as such term is defined in the
Federal Power Act, as amended, (iii) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, or (iv) a "rail carrier," or a "person
controlled by or affiliated with a rail carrier," within the meaning of Title
49, U.S.C., and it is not a "carrier" to which 49 U.S.C. Section 11301(b)(1) is
applicable.
(l) Securities Acts. It has not issued any unregistered securities
in violation of the registration requirements of the Securities Act of 1933, as
amended, or of any other Requirement of Law, and is not violating any rule,
regulation, or requirement under the Securities Act of 1933, as amended, or the
Securities and Exchange Act of 1934, as amended.
33
(m) No Approvals Required. Other than consents and approvals
previously obtained and actions previously taken, neither the execution and
delivery of this Agreement and the other Transaction Documents to which it is a
party, nor the consummation of any of the transactions contemplated hereby or
thereby requires the consent or approval of, the giving of notice to, or the
registration, recording or filing by it of any document with, or the taking of
any other action in respect of, any Governmental Authority that has jurisdiction
over it or any of its Property.
(n) Environmental Matters. There have been no past, and there are
no pending or threatened, claims, complaints, notices, or governmental inquiries
against it regarding any alleged violation of, or potential liability under, any
environmental laws that could reasonably be expected to have a Material Adverse
Effect. No conditions exist at, on or under any Property now or previously owned
or leased by it that could give rise to liability under any environmental law
that could reasonably be expected to have a Material Adverse Effect.
(o) Eligibility. The Seller is approved and qualified and in good
standing as a lender or seller/servicer, as follows:
(i) The Seller is a ▇▇▇▇▇▇ ▇▇▇ approved
seller/servicer (in good standing) of mortgage loans, eligible
to originate, purchase, hold, sell and service mortgage loans
to be sold to ▇▇▇▇▇▇ Mae.
(ii) The Seller is a ▇▇▇▇▇▇▇ Mac approved
seller/servicer (in good standing) of mortgage loans, eligible
to originate, purchase, hold, sell and service mortgage loans
to be sold to ▇▇▇▇▇▇▇ Mac.
(iii) The Seller is an approved ▇▇▇▇▇▇ ▇▇▇ issuer
(in good standing) of mortgage loans, eligible to originate,
purchase, hold, sell and service mortgage loans to be pooled
into ▇▇▇▇▇▇ Mae MBS Pools and to issue ▇▇▇▇▇▇ ▇▇▇ MBS.
(p) Principal Office, Etc. The principal office, chief executive
office and principal place of business of the Seller is at Englewood, Colorado.
(q) Financial Condition. (i) The Seller has delivered to the Buyer
(x) copies of the consolidated balance sheet of Pulte, as of December 31, 2001,
and the related consolidated statements of income, stockholder's equity and cash
flows of Pulte for the year ended on such date, certified by independent
certified accountants of recognized national standing; and (y) copies of the
unaudited consolidated balance sheet for Pulte, as of June 30, 2002, and the
related statements of income, stockholder's equity and cash flows of Pulte for
the six (6) months ended on such date (the "Interim Statements") and all such
financial statements fairly present the financial condition of the Seller as of
their respective dates, subject, in the case of the Interim Statements, to
normal year end adjustments and the results of operations of the Seller for the
periods ended on such dates and have been prepared in accordance with GAAP.
(i) As of the date thereof, there are no
material obligations, liabilities or Indebtedness (including
contingent and indirect liabilities and obligations or unusual
forward or long-term commitments) of the Seller that are
required to be reflected therein in accordance with GAAP and
that are not reflected therein.
34
(ii) No change that constitutes a Material
Adverse Effect has occurred in the financial condition or
business of the Seller since September 30, 2000.
(r) Employee Benefit Plans. (i) No Employee Plan of the Seller or
any ERISA Affiliate has incurred an "accumulated funding deficiency" (as defined
in Section 302 of ERISA or Section 412 of the Code), (ii) neither the Seller nor
any ERISA Affiliate has incurred liability under ERISA to the PBGC, (iii)
neither the Seller nor any ERISA Affiliate has partially or fully withdrawn from
participation in a Multiemployer Plan, (iv) no Employee Plan of the Seller or
any ERISA Affiliate has been the subject of involuntary termination proceedings,
(v) neither the Seller nor any ERISA Affiliate has engaged in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code),
and (vi) no "reportable event" (as defined in Section 4043 of ERISA) has
occurred in connection with any Employee Plan of the Seller or any ERISA
Affiliate other than events for which the notice requirement is waived under
applicable PBGC regulations.
(s) Ownership. On the date of this Agreement, Pulte holds
beneficial ownership of 100% of the issued and outstanding shares of each class
of the stock of the Seller. The Seller is the owner of all of the issued and
outstanding shares of each class of stock of the Buyer.
(t) Eligible Mortgage Assets. Each Mortgage Asset purported to be
sold by the Seller hereunder is an Eligible Mortgage Asset as of the date of
such sale, and each such Mortgage Asset, together with the related Mortgage Loan
Collateral, is owned (immediately prior to its sale hereunder) by the Seller
free and clear of any Adverse Claim (other than any Adverse Claim arising solely
as the result of any action taken by the Buyer). When Buyer acquires a
Transferred Mortgage Asset by Purchase hereunder, it shall acquire good and
marketable title to such Transferred Mortgage Asset and the related Mortgage
Loan Collateral and Collections with respect thereto free and clear of any
Adverse Claim (other than any Adverse Claim arising solely as the result of any
action taken by the Buyer), and no effective financing statement or other
instrument similar in effect covering any Transferred Mortgage Asset, any
interest therein, the related Mortgage Loan Collateral or Collections with
respect thereto is on file in any recording office except such as may be filed
in favor of Buyer in accordance with this Agreement or in connection with any
Adverse Claim arising solely as the result of any action taken by the Buyer. In
addition, with respect to each Mortgage Loan sold to the Buyer that is
subsequently sold to ▇▇▇▇▇▇▇ Mac, the Seller hereby makes the representations
and warranties set forth in the ▇▇▇▇▇▇▇ Mac Selling Guide and the Seller's
Master Agreement and Mortgage Loan Purchase Agreement with ▇▇▇▇▇▇▇ Mac. In
addition, with respect to each Mortgage Loan sold to Buyer that is subsequently
sold to ▇▇▇▇▇▇ ▇▇▇, the Seller hereby makes the representations and warranties
(collectively, the "▇▇▇▇▇▇ Mae Representations and Warranties") set forth in the
▇▇▇▇▇▇ ▇▇▇ Selling and Servicing Guides, the Mortgage Selling and Servicing
Contract between the Seller and ▇▇▇▇▇▇ Mae, and Master Agreement No. MDO2278 by
and among ▇▇▇▇▇▇ ▇▇▇ and the Seller, as amended from time to time, and all
subsequent master agreements entered into by and among ▇▇▇▇▇▇ Mae and the Seller
(collectively, the "▇▇▇▇▇▇ ▇▇▇ Incorporated Documents") as though the ▇▇▇▇▇▇ Mae
Representations and Warranties were fully set forth herein. The ▇▇▇▇▇▇ ▇▇▇
Incorporated Documents are incorporated herein by reference as though fully set
forth herein, and the ▇▇▇▇▇▇ Mae Representations and Warranties shall survive
the delivery of any Mortgage Loan to ▇▇▇▇▇▇ ▇▇▇. Further, with respect to each
Non-Conforming Loan, the Seller hereby makes the representations
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and warranties set forth in the related mortgage loan purchase agreement,
seller/servicer guide or other similar agreement with the applicable Approved
Investor.
(u) No Intent to Hinder Creditors. The transfers of Transferred
Mortgage Assets by the Seller to the Buyer pursuant to this Agreement, and all
other transactions between the Seller and the Buyer, have been and will be made
in good faith and without intent to hinder, delay or defraud creditors of the
Seller.
(v) No Adverse Selection. No selection procedure was utilized by
the Seller in selecting the Transferred Mortgage Assets to be transferred to the
Buyer hereunder which the Seller reasonably believes to be adverse to the
interests of the Buyer.
(w) Trade Names. Except as set forth on Schedule I hereto, the
Seller is neither known by nor uses any trade name or doing-business-as name.
ARTICLE V
COVENANTS
Section 5.01.
The Seller shall at all times comply with the covenants contained in
this Article V, from the date hereof until the later of the Facility Termination
Date and the date all of the Obligations are paid in full.
Section 5.02. Financial Statements and Reports.
The Seller shall furnish to the Buyer the following, all in form and
detail reasonably satisfactory to the Buyer:
(a) promptly after becoming available, and in any event within 120
days after the close of each fiscal year of the Seller and Pulte, the audited
consolidated balance sheet of Seller and Pulte as of the end of such fiscal
year, and the related statements of income, stockholder's equity and cash flows
of the Seller and Pulte for such year accompanied by (i) the related report of
independent certified public accountants which report shall be to the effect
that such statements have been prepared in accordance with GAAP applied on a
basis consistent with prior periods except for such changes in such principles
with which the independent public accountants shall have concurred and (ii) if
issued, the auditor's letter or report to management customarily given in
connection with such audit;
(b) promptly after becoming available, and in any event within 60
days after the end of each fiscal quarter, excluding the fourth fiscal quarter
of each fiscal year of the Seller and Pulte, the unaudited consolidated balance
sheet for Pulte as of the end of such fiscal quarter and the related statements
of income, stockholders' equity and cash flows of each of Pulte for such fiscal
quarter and the period from the first day of the then current fiscal year of the
Seller and Pulte through the end of such fiscal quarter, and, in the case of
those financial statements of the Seller, certified by a Financial Officer of
Seller, to have been prepared in accordance with GAAP applied on a basis
consistent with prior periods, subject to normal year-end adjustments;
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(c) promptly and in any event within twenty (20) days after the
request of the Buyer at any time and from time to time, a certificate, executed
by the president or chief financial officer of the Seller, setting forth all of
the Seller's warehouse borrowings and a description of the collateral related
thereto; provided that, as long as not Event of Default has occurred and is
continuing, such request may be made no more frequently than annually;
(d) no later than 11:00 a.m. (eastern time) on the fifteenth day
of each month and within twenty (20) days after request by the Buyer, a report
executed by a Financial Officer of the Seller, in form reasonably satisfactory
to the Buyer ("Seller Report") which shall provide as of the last day of the
previous month (or of the date of such request) (i) an aging of mortgage loans
owned by the Buyer, and (ii) such other information as the Buyer may reasonably
request;
(e) promptly after the filing or receiving thereof, copies of all
reports and notices with respect to any "reportable event" defined in Article IV
of ERISA that the Seller files under ERISA with the Internal Revenue Service,
the PBGC or the U.S. Department of Labor receives from the PBGC;
(f) immediately after becoming aware of the expiration,
forfeiture, termination, or cancellation of, or default under, any Take-Out
Commitment, telephone notice thereof confirmed in writing within one Business
Day, together with a statement as to what action the Buyer proposes to take with
respect thereto; provided that no such notice need be given if such Take-Out
Commitment, is replaced by another Take-Out Commitment;
(g) with respect to Take-Out Commitments, by noon (eastern time)
on the first Business Day of each week, a Hedge Report;
(h) at least ten Business Days prior to any change in a Seller's
name, a notice setting forth the new name and the effective date thereof; and
(i) such other information concerning the business, properties or
financial condition of the Seller as the Buyer may reasonably request.
Section 5.03. Taxes and Other Liens.
The Seller shall pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or upon any of
its Property as well as all claims of any kind (including claims for labor,
materials, supplies and rent) that, if unpaid, might become a Lien upon any or
all of its Property; provided, however, the Seller shall not be required to pay
any such tax, assessment, charge, levy or claim if the amount, applicability or
validity thereof shall currently be contested in good faith by appropriate
proceedings diligently conducted by it or on its behalf and if it shall have set
up reserves therefor adequate under GAAP.
Section 5.04. Maintenance.
The Seller shall (i) maintain its corporate existence, rights and
franchises and (ii) observe and comply in all material respects with all
Governmental Requirements.
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Section 5.05. Further Assurances.
(a) The Seller agrees from time to time, at its expense, promptly
to execute and deliver all further instruments and documents, and to take all
further actions, that may be necessary or reasonably desirable, or that the
Buyer or its assignee may reasonably request, to perfect, protect or more fully
evidence the sale of Mortgage Assets under this Agreement, or to enable the
Buyer or its assignee to exercise and enforce its respective rights and remedies
under this Agreement. Without limiting the foregoing, the Seller will, upon the
reasonable request of the Buyer or its assignee, (i) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments and documents, that may be necessary or desirable to perfect,
protect or evidence such Transferred Mortgage Assets; and (ii) deliver to the
Buyer and/or the Collateral Agent copies of all Mortgage Loan Collateral
relating to the Transferred Mortgage Assets and all records relating thereto,
whether in hard copy or in magnetic tape or diskette format.
(b) The Seller authorizes the Buyer or its assignee to file
financing or continuation statements, and amendments thereto and assignments
thereof, relating to the Transferred Mortgage Assets, the related Mortgage Loan
Collateral and the Collections with respect thereto without the signature of the
Seller where permitted by law. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where permitted by law.
Section 5.06. Insurance.
(a) The Seller shall maintain with financially sound and reputable
insurers, insurance with respect to its Properties and business against such
liabilities, casualties, risks and contingencies and in such types and amounts
as is customary in the case of Persons engaged in the same or similar businesses
and similarly situated, including, without limitation, a fidelity bond or bonds
in form and with coverage and with a company reasonably satisfactory to the
Buyer and with respect to such individuals or groups of individuals as the Buyer
may reasonably designate.
(b) The Seller for so long as it is the Servicer of the
Transferred Mortgage Assets shall use its best efforts to cause (i) all
improvements on the land covered by each Mortgage related to any Transferred
Mortgage Assets to be insured by responsible insurance companies against fire
and extended coverage hazards under policies, binders, letters, or certificates
of insurance, with a standard mortgagee clause in favor of the original
mortgagee and its successors and, and (ii) each such policy to be in an amount
equal to the lesser of the maximum insurable value of the improvements or the
original principal amount of the Mortgage, without reduction by reason of any
co-insurance, reduced rate contribution, or similar clause of the policies or
binders.
(c) In the event that the Seller shall obtain and maintain a
blanket policy issued by an issuer that has a Best rating acceptable to ▇▇▇▇▇▇
▇▇▇ insuring against hazard losses on all of the Mortgage Loans, then, to the
extent such policy provides coverage in an amount equal to the amount required
pursuant to Section 5.05(b) and otherwise complies with all other requirements
of Section 5.05(b), it shall conclusively be deemed to have satisfied its
obligations as set forth in Section 5.05(b), it being understood and agreed that
such policy may contain a deductible clause,
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in which case the Seller shall, in the event that there shall not have been
maintained on the related mortgaged property a policy complying with Section
5.05(b), and there shall have been a loss which would have been covered by such
policy, deposit in the Collection Account the amount not otherwise payable under
the blanket policy because of such deductible clause. In connection with its
activities as servicer of the Mortgage Loans, the Seller agrees to prepare and
present, on behalf of the Buyer, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy. Upon request of the
Buyer or its assigns, the Seller shall cause to be delivered to the Buyer or its
assigns a certified true copy of such policy and shall use its best efforts to
obtain a statement from the insurer thereunder that such policy shall in no
event be terminated or materially modified without thirty days' prior written
notice to the Buyer or its assigns.
Section 5.07. Accounts and Records.
The Seller shall keep books of record and account in which full, true
and correct entries will be made of all dealings or transactions in relation to
its business and activities, in accordance with GAAP. The Seller shall maintain
and implement administrative and operating procedures (including, without
limitation, an ability to re-create all records pertaining to the performance of
the Seller's obligations under the Take-Out Commitments and other agreements
made with reference to any Mortgage Loans in the event of the destruction of the
originals of such records). The Seller will keep and maintain all servicing
records, pursuant to all Governmental Requirements and as required by all
Approved Investors.
Section 5.08. Right of Inspection.
The Seller shall permit any officer, employee or agent of the Buyer or
its assignee to visit and inspect any of its Properties, examine its books of
record and accounts, and discuss its affairs, finances and accounts with its
officers, accountants and auditors, all at such times during reasonable business
hours and as often as the Buyer or its assignee may desire upon prior notice,
provided, however, that (i) except during the continuation of an Event of
Default, such inspections and examinations may be performed only once annually,
and (ii) such inspections and examinations shall be conducted in a manner that
does not interfere with the normal operations of the Seller.
Section 5.09. Notice of Certain Events.
The Seller shall promptly notify the Buyer upon (i) any dispute between
the Seller and any Governmental Authority or any other Person that, if adversely
determined, would have a Material Adverse Effect; (ii) any material adverse
change in the business, operations or financial condition of the Seller,
including, without limitation, the Seller's insolvency; (iii) any event or
condition known to it that, if adversely determined, would have a Material
Adverse Effect; (iv) the receipt of any notice from, or the taking of any other
action by any Approved Investor indicating an intent not to honor, or claiming a
default under a Take-Out Commitment, together with a detailed statement by a
responsible officer of the Seller specifying the notice given or other action
taken by such Approved Investor and the nature of the claimed default and what
action the Seller is taking or proposes to take with respect thereto, (v) the
receipt of any notice from, and or the taking of any action by any Governmental
Authority indicating an intent to
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cancel the Seller's right to be either a seller or servicer of such Governmental
Authority's insured or guaranteed Mortgage Loans and (vi) the receipt of any
notice of any final judgment or order for payment of money applicable to the
Seller in excess of $1,000,000.
Section 5.10. Performance of Certain Obligations.
The Seller shall perform and observe in all material respects each of
the provisions of each Mortgage Loan transferred hereunder and the related
Take-Out Commitment on its part to be performed or observed and will cause all
things to be done that are necessary to have each item of the Transferred
Mortgage Assets comply with the requirements of the related Take-Out Commitment.
Section 5.11. Notice of Default.
The Seller shall furnish to the Buyer immediately upon becoming aware
of the existence of any Default or Event of Default, a written notice specifying
the nature and period of existence thereof and the action that the Seller is
taking or proposes to take with respect thereto.
Section 5.12. Compliance with Laws and Material Agreements.
The Seller shall comply with (a) all applicable laws, rules,
regulations and orders, and (b) material agreements, indentures, mortgages and
corporate documents, except to the extent that the failure so to comply would
not be reasonably expected to have a Material Adverse Effect.
Section 5.13. Deposits of Proceeds.
The Seller shall not deposit or otherwise credit, or cause or permit to
be so deposited or credited, to the Collection Account, cash or cash proceeds
other than payments in respect of Take-Out Commitments and other Collections of
Transferred Mortgage Assets.
Section 5.14. Closing Instructions.
The Seller agrees to indemnify and hold the Buyer and its assignee
harmless from and against any loss, including attorneys' fees and costs,
attributable to the failure of a title insurance company, agent or approved
attorney to comply with the disbursement or instruction letter or letters of the
Seller relating to any Mortgage Loan included in the Transferred Mortgage
Assets.
Section 5.15. Special Affirmative Covenants Concerning Transferred
Mortgage Assets.
(a) The Seller shall service or cause to be serviced pursuant to
the Restated Loan Agreement all Mortgage Loans sold by it and included in the
Transferred Mortgage Assets in accordance with the standard requirements of the
issuers of Take-Out Commitments covering the same and all applicable ▇▇▇▇▇▇ Mae
or ▇▇▇▇▇▇▇ Mac requirements, including without limitation taking all actions
necessary to enforce the obligations of the Obligors under such Mortgage Loans.
The Seller shall hold all escrow funds collected in respect of Mortgage Loans,
without commingling the same with any other non-escrow funds, and apply the same
for the purposes for which such funds were collected.
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(b) The Seller shall, no less than on an annual basis, review
financial statements, compliance with financial parameters, ▇▇▇▇▇▇ Mae/▇▇▇▇▇▇▇
Mac approvals (if applicable) and state licenses of all Persons from whom the
Seller acquires Mortgage Loans.
Section 5.16. Limitations on Mergers and Dissolutions.
The Seller shall not (i) merge or consolidate with or into any
corporation, unless the Seller is the surviving entity of any such merger or
consolidation nor (ii) liquidate or dissolve.
Section 5.17. Fiscal Year.
The Seller shall not change its fiscal year other than to conform with
changes that may be made to the Pulte fiscal year and then only after notice to
the Buyer and after whatever reasonable amendments are made to this Agreement as
may be required by the Buyer in order that the reporting criteria for the
financial covenants contained in this Article V remain substantially unchanged.
Section 5.18. Actions with Respect to Transferred Mortgage Assets. The
Seller shall not:
(a) Compromise, extend, release, or adjust payments on any
Transferred Mortgage Loan, accept a conveyance of mortgaged Property in full or
partial satisfaction of any Mortgage debt or release any Mortgage securing or
underlying any Transferred Mortgage Loan except as permitted by the related
Approved Investor or as contemplated in the servicing guidelines distributed
thereby; or
(b) Agree to the amendment or termination of any Take-Out
Commitment in which the Buyer has an interest or to substitution of a Take-Out
Commitment for a Take-Out Commitment in which the Buyer has an interest
hereunder.
Section 5.19. Net Worth.
The Seller's Net Worth shall never be less than $10,000,000.
Section 5.20. Employee Benefit Plans.
The Seller shall not permit any of the events or circumstances
described in Section 4.01(r) to exist or occur.
Section 5.21. Change of Principal Office.
The Seller shall not move its principal office, executive office or
principal place of business from the address set forth in Section 4.01(p)
without 30-days' prior written notice to the Buyer.
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Section 5.22. Maximum Leverage.
The Seller shall not permit its Adjusted Liabilities to exceed 15 times
its Adjusted Net Worth.
Section 5.23. Delivery of Special Mortgage Loans.
The Seller shall deliver to the Collateral Agent, within nine (9)
Business Days after the date of transfer hereunder of any Special Mortgage Loan
from the Seller, the Principal Mortgage Documents relating to such Special
Mortgage Loan; provided that at any time, except the first five and last five
Business Days of any month, the portion of total Collateral Value that may be
attributable to Special Mortgage Loans with respect to which the related
Principal Mortgage Documents have not been delivered to the Collateral Agent
within nine (9) Business Days after the date the Assignment was delivered to the
Collateral Agent, shall not exceed thirty percent (30%) of the Maximum Facility
Amount (as defined in the Restated Loan Agreement) at such time and during the
first five and last five Business Days of any month, the portion of total
Collateral Value that may be attributable to Special Mortgage Loans with respect
to which the related Principal Mortgage Documents have not been delivered to the
Collateral Agent within nine (9) Business Days after the date the Assignment was
delivered to the Collateral Agent shall not exceed fifty percent (50%) of the
Maximum Facility Amount (as defined in the Restated Loan Agreement) at such
time.
Section 5.24. Change in Business.
The Seller will not make any change in the character of its business
that would adversely affect the collectability of the Transferred Mortgage
Assets or the ability of the Seller to perform its obligations under this
Agreement.
Section 5.25. Separate Conduct of Business.
The Seller will: (i) maintain separate corporate records and books of
account from those of the Buyer; (ii) conduct its business from an office
separate from that of the Buyer; (iii) ensure that all oral and written
communications, including, without limitation, letters, invoices, purchase
orders, contracts, statements and applications, will be made solely in its own
name; (iv) have stationery and other business forms separate from those of the
Buyer; (v) not hold itself out as having agreed to pay, or as being liable for,
the obligations of the Buyer; (vi) not engage in any transaction with the Buyer
except as contemplated by this Agreement or as permitted by the Restated Loan
Agreement; (vii) continuously maintain as official records the resolutions,
agreements and other instruments underlying the transactions contemplated by
this Agreement; and (viii) disclose on its annual financial statements (A) the
effects of the transactions contemplated by this Agreement in accordance with
GAAP and (B) that the assets of the Buyer are not available to pay the creditors
of the Seller.
Section 5.26. Sales, Liens, Etc.
Except for the sales of Transferred Mortgage Assets contemplated
herein, the Seller will not sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to, any Transferred Mortgage Asset or Mortgage
42
Loan Collateral, or Collections related thereto, or upon or with respect to any
account to which any Collections of any Transferred Mortgage Assets are sent, or
assign any right to receive income in respect thereof.
Section 5.27. Operations and Properties.
The Seller shall act prudently and in accordance with customary
industry standards in managing and operating its Property and shall continue to
underwrite, hedge and sell Mortgage Loans in the same diligent manner it has
applied in the past and take no greater credit or market risks than are
currently being borne by it.
Section 5.28. Performance Guarantor Credit Rating.
If at any time any of the senior debt of the Performance Guarantor,
which is publicly held, shall fail to bear a rating of at least BBB- by S&P, Ba1
by ▇▇▇▇▇'▇ or BBB-by Fitch, the Seller shall give the Buyer or its assigns
written notice of such change in rating, within two Business Days of the date on
which such change is announced by either of these rating agencies.
Section 5.29. Take-Out Commitments.
The Seller shall use its best efforts to obtain, and maintain in full
force and effect, Take-Out Commitments reflecting total Approved Investor
obligations, as of each determination, equal to the total of the original
principal balances of the Seller's entire portfolio of Mortgage Loans. Each of
such Take-Out Commitments shall reflect only those terms and conditions as are
permitted hereunder or are acceptable to the Administrative Agent. The Seller
shall use its best efforts to obtain, and maintain in full force and effect,
forward purchase commitments (which may include options to sell Mortgage Loans
to Approved Investors, so long as the Approved Investor is bound thereby) issued
by Approved Investors and obligating such Approved Investors to purchase a
portion of the Seller's subsequently acquired Mortgage Loans.
Section 5.30. Environmental Compliance.
The Seller shall use and operate all of its facilities and properties
in compliance with all environmental laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in compliance therewith, and handle
all hazardous materials in compliance with all applicable environmental laws,
except where failure to so comply would not reasonably be expected to have a
Material Adverse Effect.
ARTICLE VI
COVENANTS
Section 6.01. Servicing.
So long as the Restated Loan Agreement remains in effect, the
servicing, administration and collection of the Transferred Mortgage Assets will
be conducted by the Person designated as the Servicer pursuant to the Restated
Loan Agreement and in the manner provided in the Restated Loan Agreement. If the
Restated Loan Agreement is terminated, the parties hereto
43
agree to enter into a servicing arrangement on terms substantially similar to
those contained in the Restated Loan Agreement. The parties acknowledge that the
Seller has been designated as the initial Servicer pursuant to the terms and
provisions of the Restated Loan Agreement.
Section 6.02. Correction of Mortgage Notes.
The Buyer may from time to time request, in writing, that the
Collateral Agent deliver a Mortgage Note that constitutes Transferred Mortgage
Assets so that such Mortgage Note may be replaced by a corrected Mortgage Note.
Upon receipt by the Collateral Agent of such a request, and so long as no
Default or Event of Default shall be in existence, the Collateral Agent is
permitted to deliver to the Buyer or the Servicer the Mortgage Note to be
corrected, such delivery to be conditioned upon the receipt by the Collateral
Agent of a corrected Mortgage Note acceptable to it within 14 calendar days
after such delivery; provided, that at no time shall the Collateral Value of
Mortgage Notes which have been so delivered and have not been replaced with
corrected Mortgage Notes hereunder exceed $5,000,000. If the corrected Mortgage
Note is not received within such time, then, beginning on the first Business Day
following such fourteenth calendar day, the Collateral Agent shall assign such
Mortgage Loan a Collateral Value of zero.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default.
(a) Section 11 is amended by deleting such Section in its entirety
and substituting the following therefor:
(i) the Seller fails to make (A) any payment required
under Section 2.03 or 2.04 by the day that such payment is due, or (B)
payment of any cost, expense, indemnity payment or other amount due
hereunder, and such failure continues for five Business Days after
written notice thereof; or, while the Seller is acting as the Servicer,
the Servicer fails to make any payment or deposit to be made by it
under this Agreement or the Master Repurchase Agreement by the third
Business Day after the date such payment is due; or
(ii) the Seller or, while the Seller is acting as the
Servicer, the Servicer fails to keep or perform any covenant or
agreement contained in this Agreement or the Master Repurchase
Agreement (other than as referred to in clause (i) above) and such
failure continues unremedied beyond the expiration of any applicable
grace or notice period which may be expressly provided for in such
covenant or agreement, or, if no such period is specified, within
thirty (30) days after written notice thereof; or
(iii) [Intentionally Deleted]
(iv) any statement, warranty or representation by or on
behalf of the Seller contained in this Agreement or the Master
Repurchase Agreement or any Purchase Request, officer's certificate or
other writing furnished in connection with this
44
Agreement, proves to have been incorrect or misleading in any material
respect as of the date made or deemed made, provided that a breach of a
representation or covenant that affects an individual Mortgage Loan
shall not constitute an Event of Default; or
(v) (i) the Seller, the Servicer (so long as the Servicer
and the Seller are the same entity) or the Performance Guarantor fails
to make when due or within any applicable grace period any payment on
any other Indebtedness with an unpaid principal balance of over
$1,000,000.00 ($10,000,000 with respect to the Performance Guarantor);
or (ii) any event or condition occurs under any provision contained in
any such obligation or any agreement securing or relating to such
obligation (or any other breach or default under such obligation or
agreement occurs) if the effect thereof is to cause or permit with the
giving of notice or lapse of time or both the holder or trustee of such
obligation to cause such obligation to become due prior to its stated
maturity; or (iii) any such obligation becomes due (other than by
regularly scheduled payments) prior to its stated maturity; or (iv) any
of the foregoing occurs with respect to any one or more items of
Indebtedness of the Seller, the Servicer (so long as the Servicer and
the Seller are the same entity) or the Performance Guarantor with
unpaid principal balances exceeding, in the aggregate, $1,000,000.00
($10,000,000 with respect to the Performance Guarantor); or
(vi) any Purchase of Mortgage Assets hereunder and the
Mortgage Loan Collateral and the Collections with respect thereto shall
for any reason cease to constitute valid and perfected ownership of
such Mortgage Assets, Mortgage Loan Collateral and Collections free and
clear of any Adverse Claim and the Seller fails to repurchase such
Mortgage Assets pursuant to Section 2.04; or
(vii) the Seller shall generally not pay its debts as they
become due, or shall admit in writing its inability to pay its debts,
or shall make a general assignment for the benefit of creditors; or
(viii) the Seller shall (A) apply for or consent to the
appointment of a receiver, trustee, Collateral Agent, intervenor or
liquidator of it or of all or a substantial part of its assets, (B)
file a voluntary petition in bankruptcy, (C) file a petition or answer
seeking reorganization or an arrangement with creditors or to take
advantage of any Debtor Laws, (D) file an answer admitting the material
allegations of, or consent to, or default in answering, a petition
filed against it in any bankruptcy, reorganization or insolvency
proceeding, or (E) take corporate action for the purpose of effecting
any of the foregoing; or
(ix) an involuntary petition or complaint shall be filed
against the Seller seeking bankruptcy or reorganization of the Seller
or the appointment of a receiver, custodian, trustee, intervenor or
liquidator of the Seller, or all or substantially all of the assets of
the Seller, and such petition or complaint shall not have been
dismissed within 60 days of the filing thereof; or an order, order for
relief, judgment or, decree shall be entered by any court of competent
jurisdiction or other competent authority approving a petition or
complaint seeking reorganization of the Seller or appointing a
receiver,
45
custodian, trustee, intervenor or liquidator of the Seller, or of all
or substantially all of assets of the Seller; or
(x) an Event of Default shall have occurred under the
Restated Loan Agreement;
(each of the foregoing, an "Event of Default") then, and in any such event, the
Buyer may, by notice to the Seller, take either or both of the following
actions: (A) declare the Facility Termination Date to have occurred (in which
case the Facility Termination Date shall be deemed to have occurred) and (B)
subject to the provisions of the Restated Loan Agreement, designate another
Person to succeed the Seller as Servicer (without payment of any servicer
termination fees); provided, that, automatically upon the occurrence of any
event (without any requirement for the passage of time or the giving of notice)
described in paragraph (vii), (viii) or (ix) of this Paragraph 11(a), the
Facility Termination Date shall occur. Upon any such declaration or designation
or upon such automatic termination, the Buyer shall have, in addition to the
rights and remedies under this Agreement, all other rights and remedies with
respect to the Transferred Mortgage Assets provided after default under the UCC
and under other applicable law, which rights and remedies shall be cumulative.
(b) The parties hereto recognize that the Seller's obligations to
Buyer under this Agreement and the Master Repurchase Agreement are special,
unique and of extraordinary character. If an Event of Default occurs hereunder,
the Seller agrees that Buyer may enforce this Agreement and the Master
Repurchase Agreement by a proceeding for specific performance or other equitable
remedy including, without limitation, a proceeding in which replevin or
injunction is sought by Buyer. The Seller hereby waives to the fullest extent
permitted by law any and all rights it may have by statute, constitution or
otherwise, to (i) assert the defense of adequacy of a remedy at law that might
be asserted as a bar to such proceeding, and (ii) the fixing, imposition or
posting of a bond or other security by Buyer as a condition to obtaining any
equitable relief sought by Buyer, which relief the Seller further agrees may be
obtained ex parte without prior notice to the Seller provided a hearing is
substantially provided Seller within a reasonable time after any ex parte relief
may be granted Buyer. Seller further agrees that the rights and remedies
hereunder are cumulative, and are not exclusive of any rights, powers,
privileges, or remedies, now or thereafter existing, at law, or in equity or
otherwise.
Section 7.02. Remedies.
(a) If an Event of Default occurs with respect to the Seller, the
following rights and remedies are available to the Buyer:
(i) At the option of the Buyer, exercised by written
notice to the Seller (which option shall be deemed to have been
exercised, even if no notice is given, immediately upon the occurrence
of an Act of Insolvency), the Repurchase Date for each Transaction
hereunder shall be deemed immediately to occur.
(ii) If the Buyer exercised or is deemed to have exercised
the option referred to in subsection (a)(i) of this Section:
46
(A) the Seller's obligations hereunder to
repurchase all Purchased Mortgage Assets in
such Transactions shall thereupon become
immediately due and payable, and
(B) to the extent permitted by applicable law,
the Repurchase Price with respect to each
such Transaction shall be increased by the
aggregate amount obtained by daily
application of, on a 360 day per year basis
for the actual number of days during the
period from and including the date of the
exercise or deemed exercise of such option
to but excluding the date of payment of the
Repurchase Price as so increased, (x) the
greater of the Prime Rate or the Pricing
Rate for each such Transaction to (y) the
Repurchase Price for such Transaction as of
the Repurchase Date as determined pursuant
to subsection (a)(i) of this Section
(decreased as of any day by (I) any proceeds
from the sale of Purchased Mortgage Assets
applied to the Repurchase Price pursuant to
subsection (a)(iii) of this Section, and
(II) any amounts applied to the Repurchase
Price pursuant to subsection (a)(iii) of
this Section).
(iii) The Buyer may (A) immediately sell, without notice or demand
of any kind, at a public or private sale and at such price or
prices as the Buyer may reasonably deem satisfactory any or
all Mortgage Assets subject to a Transaction hereunder or (B)
in its sole discretion elect, in lieu of selling all or a
portion of such Purchase Assets, to give the Seller credit for
such Purchase Assets in an amount equal to the Collateral
Value of the Purchased Mortgage Assets against the aggregate
unpaid Repurchase Price and any other amounts owing by the
Seller hereunder. The proceeds of any disposition of Purchased
Mortgage Assets shall be applied first to the costs and
expenses incurred by the Buyer in connection with the
defaulting Seller's default; second to Buyer's costs
(including fees and expenses of counsel to Buyer) of cover
and/or related hedging or similar transactions (including any
transaction described in paragraph 8 of the Master Repurchase
Agreement); third to the Repurchase Price; and fourth to any
other outstanding obligation of the Seller to the Buyer or its
affiliates.
(iv) The parties recognize that it may not be possible to purchase
or sell all of the Purchased Mortgage Assets on a particular
Business Day, or in a transaction with the same purchaser, or
in the same manner because the market for such Purchased
Mortgage Assets may not be liquid. In view of the nature of
the Purchased Mortgage Assets, the parties agree that
liquidation of a Transaction or the underlying Purchased
Mortgage Assets does not require a public purchase or sale and
that a good faith private purchase or sale shall be deemed to
have been made in a commercially reasonable manner.
Accordingly, Buyer may elect, in its sole discretion, the time
and manner of liquidating any Purchased Mortgage Assets and
nothing contained herein shall (A) obligate Buyer to liquidate
any Purchased Mortgage Assets on the occurrence of an Event of
Default or to liquidate all Purchased Mortgage Assets in the
same manner or on the same Business Day or (B) constitute a
waiver of any right or remedy of Buyer. However, in
recognition
47
of the parties' agreement that the Transactions hereunder have
been entered into in consideration of and in reliance upon the
fact that all Transactions hereunder constitute a single
business and contractual relationship and that each
Transaction has been entered into in consideration of the
other Transactions, the parties further agree that Buyer shall
use its best efforts to liquidate all Transactions hereunder
upon the occurrence of an Event of Default as quickly as is
prudently possible in the good faith judgment of Buyer.
(v) Buyer shall, without regard to the adequacy of the security
for the Seller's obligations under this Agreement and the
Master Repurchase Agreement, be entitled to the appointment of
a receiver by any court having jurisdiction, without notice,
to take possession of and protect, collect, manage, liquidate,
and sell the Purchased Mortgage Assets or any portion thereof,
and collect the payments due with respect to the Purchase
Assets or any portion thereof. The Seller shall pay all costs
and expenses incurred by Buyer in connection with the
appointment and activities of such receiver.
(vi) Buyer shall have all the rights and remedies provided herein,
provided by applicable federal, state, foreign, and local laws
(including, without limitation, the rights and remedies of a
security party under the Uniform Commercial Code of the State
of New York, to the extent that the Uniform Commercial Code is
applicable, and the right to offset any mutual debt and
claim), in equity, and under any other agreement between Buyer
and the Seller.
(vii) Buyer may exercise one or more of the remedies available to
Buyer immediately upon the occurrence of an Event of Default
and, except to the extent provided in subsections (a)(i) and
(iii) of this Section, at any time thereafter without notice
to the Seller. All rights and remedies arising under this
Agreement and the Master Repurchase Agreement as amended from
time to time hereunder are cumulative and not exclusive of any
other rights or remedies which Buyer may have.
(viii) In addition to its rights hereunder, Buyer shall have the
right to proceed against any assets of Seller which may be in
the possession of Buyer or its designee (including the
Custodian), including the right to liquidate such assets and
to set off the proceeds against monies owed by the Seller to
Buyer pursuant to this Agreement and the Master Repurchase
Agreement. Buyer may set off cash, the proceeds of the
liquidation of the Purchased Mortgage Assets or proceeds
thereof, and all other sums or obligations owed by the Seller
to Buyer against all of Seller's obligations to Buyer, whether
under this Agreement and the Master Repurchase Agreement,
under a Transaction, or under any other agreement between the
parties, or otherwise, whether or not such obligations are
then due, without prejudice to Buyer's rights to recover any
deficiency. Any cash, proceeds, or property in excess of any
amounts due, or which Buyer reasonably believes may become
due, to it from the Seller shall be returned to the Seller
after satisfaction of all obligations of Seller to Buyer.
48
(ix) Buyer may enforce its rights and remedies hereunder without
prior judicial process or hearing, and the Seller hereby
expressly waives any defense the Seller might otherwise have
to require Buyer to enforce its rights by judicial process.
The Seller also waives any defense the Seller might otherwise
have arising from the use of nonjudicial process, enforcement
and sale of all or any portion of the Repurchase Items, or
from any other election of remedies. The Seller recognizes
that nonjudicial remedies are consistent with the usages of
the trade, are responsive to commercial necessity and are the
result of a bargain at arm's length.
(x) Notwithstanding anything to the contrary herein, the Buyer
shall have no right to proceed against any assets of the
Seller other than the Purchased Mortgage Assets in the event
of a default in the Seller's obligation to repurchase any
Purchased Mortgage Assets pursuant to Section 3(b) or 3(c) of
the Master Repurchase Agreement, as modified by this
Agreement. Such obligation of the Seller to repurchase
Purchased Mortgage Assets pursuant to Section 3(b) and 3(c) of
the Master Repurchase Agreement, as modified by this
Agreement, shall be recourse solely to the Purchased Mortgage
Assets, in the aggregate, and the Seller shall have no
obligation in respect of any deficiencies. By contrast, the
Seller's obligation to repurchase Purchased Mortgage Assets
pursuant to Section 2.5 hereunder shall be recourse to the
assets of the Seller.
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnities by the Seller.
Without limiting any other rights which the Buyer may have hereunder or
under applicable law, the Seller hereby agrees to indemnify the Buyer and its
assigns and transferees (each, an "Indemnified Party") from and against any and
all damages, claims, losses, liabilities and related costs and expenses,
including attorneys' fees and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts"), awarded against or incurred
by any Indemnified Party arising out of or as a result of this Agreement or the
purchase of any Transferred Mortgage Assets or in respect of any Transferred
Mortgage Asset or any related Mortgage Loan Collateral, including, without
limitation, arising out of or as a result of:
(a) the inclusion, or purported inclusion, in any Purchase of any
Mortgage Asset that is not an Eligible Mortgage Asset on the date of such
Purchase, or the characterization in any statement made by the Seller of any
Transferred Mortgage Asset as an Eligible Mortgage Asset which is not an
Eligible Mortgage Asset as of the date of such statement;
(b) any representation or warranty or statement made or deemed
made by the Seller (or any of its officers) under or in connection with this
Agreement, which shall have been incorrect when made;
(c) the failure by the Seller to comply with any applicable law,
rule or regulation with respect to any Transferred Mortgage Asset or the related
Mortgage Loan Collateral, or the failure
49
of any Transferred Mortgage Asset or the related Mortgage Loan Collateral to
conform to any such applicable law, rule or regulation;
(d) the failure to vest in the Buyer absolute ownership of the
Mortgage Assets that are, or that purport to be, the subject of a Purchase under
this Agreement and the Mortgage Loan Collateral and Collections in respect
thereof, free and clear of any Adverse Claim;
(e) the failure of the Seller to have filed, or any delay in
filing, financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws with respect to any
Mortgage Assets that are, or that purport to be, the subject of a Purchase under
this Agreement and the Mortgage Loan Collateral and Collections in respect
thereof, whether at the time of any Purchase or at any subsequent time;
(f) any claim by any Obligor arising out of the Seller's
activities in connection with originating or purchasing any Transferred Mortgage
Asset or any offset by any Obligor against the Seller arising out of acts by the
Seller;
(g) any failure of the Seller, as Seller or Servicer, to perform
its duties or obligations in accordance with the provisions hereof or to perform
its duties or obligations under any Mortgage Loan Collateral related to a
Transferred Mortgage Asset;
(h) the commingling of Collections of Transferred Mortgage Assets
by the Seller or a designee of the Seller, as Servicer or otherwise, at any time
with other funds of the Seller or an Affiliate of the Seller;
(i) any investigation, litigation or proceeding related to this
Agreement or the use of proceeds of Purchases or the ownership of Transferred
Mortgage Assets or the Mortgage Loan Collateral or Collections with respect
thereto or in respect of any Transferred Mortgage Asset or related Mortgage Loan
Collateral;
(j) any failure of the Seller to comply with its covenants
contained in Section 5.01; or
(k) any claim brought by any Person other than an Indemnified
Party arising from any activity by the Seller or any Affiliate of the Seller in
servicing, administering or collecting any Transferred Mortgage Asset.
It is expressly agreed and understood by the parties hereto (i) that
the foregoing indemnification is not intended to, and shall not, constitute a
guarantee of the collectibility or payment of the Transferred Mortgage Assets
and (ii) that nothing in this Section 8.01 shall require Seller to indemnify any
Person (A) for Mortgage Assets which are not collected, not paid or
uncollectible on account of the insolvency, bankruptcy, or financial inability
to pay of the applicable Obligor, (B) for damages, losses, claims or liabilities
or related costs or expenses resulting from such Person's gross negligence or
willful misconduct, or (C) for any income taxes or franchise taxes incurred by
such Person arising out of or as a result of this Agreement or in respect of any
Transferred Mortgage Asset or any related Mortgage Loan Collateral.
50
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement or consent to
any departure by the Seller therefrom shall be effective unless in a writing
signed by the Buyer, and by any assignee of the Buyer if the amendment or waiver
in any way affects any right, remedy or obligation of the Buyer to such
assignee, and, in the case of any amendment, also signed by the Seller, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
the Buyer or any assignee to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
Section 9.02. Notices, Etc..
All notices and other communications hereunder shall, unless otherwise
stated herein, be in writing (which shall include facsimile communication) and
be faxed or delivered, to each party hereto, at its address set forth under its
name on the signature pages hereof or at such other address as shall be
designated by such party in a written notice to the other parties hereto.
Notices and communications by facsimile shall be effective when sent (and shall
be followed by hard copy sent by regular mail), and notices and communications
sent by other means shall be effective when received.
Section 9.03. Binding Effect; Assignability.
(a) This Agreement shall be binding upon and inure to the benefit
of the Seller, the Buyer and their respective successors and assigns; provided,
however, that the Seller may not assign its rights or obligations hereunder or
any interest herein without the prior written consent of the Buyer, or as
provided in the next sentence. In connection with any sale or assignment by the
Buyer of all or a portion of the Transferred Mortgage Assets, the buyer or
assignee (including ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac or any other Approved Investor or
other purchaser to whom rights under this Agreement may be assigned but only
with respect to an assignment made following and during the continuance of an
Event of Default), as the case may be, shall, to the extent specifically
provided in connection with its purchase or assignment, under a master agreement
or otherwise (in the case of Mortgage Loans delivered to ▇▇▇▇▇▇ Mae), have all
rights and remedies of the Buyer under this Agreement (as if such buyer or
assignee, as the case may be, were the Buyer hereunder) and without limitation
of the foregoing, all representations and warranties (including ▇▇▇▇▇▇ ▇▇▇
Representations and Warranties in the case of Mortgage Loans delivered to ▇▇▇▇▇▇
Mae) made by the Seller to Buyer shall be directly enforceable by such buyer or
assignee, except to the extent specifically provided in the agreement between
the Buyer and such buyer or assignee, as the case may be.
(b) This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such
51
time, after the Facility Termination Date, when all of the Obligations are paid
in full; provided, however, that rights and remedies with respect to any breach
of any representation and warranty made by the Seller pursuant to Article IV and
the provisions of Article VIII and Sections 9.04 and 9.05 shall be continuing
and shall survive any termination of this Agreement.
Section 9.04. Costs, Expenses and Taxes, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the
Buyer pursuant to Article VIII hereof, the Seller agrees to pay on demand all
out-of-pocket costs and expenses in connection with the preparation, execution
and delivery of this Agreement and the other documents and agreements to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Buyer with respect thereto and with
respect to advising the Buyer as to its rights and remedies under this
Agreement, and the Seller agrees to pay all reasonable costs and expenses, if
any (including counsel fees and expenses), in connection with the enforcement of
this Agreement and the other documents to be delivered hereunder excluding,
however, any costs of enforcement or collection of Transferred Mortgage Assets
which are not paid on account of the insolvency, bankruptcy or financial
inability to pay of the applicable Obligor.
(b) In addition, the Seller agrees to pay any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement or the other documents or agreements to be
delivered hereunder, and the Seller agrees to save each Indemnified Party
harmless from and against any liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees.
Section 9.05. No Proceedings.
The Seller hereby agrees that it will not institute against the Buyer
any proceeding of the type referred to in Section 7.01(a)(viii) or (ix) so long
as there shall not have elapsed one year plus one day since the later of (i) the
Facility Termination Date and (ii) the date on which all of the Obligations are
paid in full.
Section 9.06. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW WHICH SHALL APPLY HERETO).
Section 9.07. Third Party Beneficiary.
Each of the parties hereto hereby acknowledges that the Buyer may
assign or grant a security interest in all or any portion of its rights under
this Agreement and that such assignees may (except as otherwise agreed to by
such assignees) further assign or grant a security interest in their rights
under this Agreement, and the Seller hereby consents to any such assignments or
grants of security interests. All such assignees, including parties to the
Restated Loan Agreement in the case of assignment or the grant of a security
interest to such parties, shall be
52
third party beneficiaries of, and shall be entitled to enforce the Buyer's
rights and remedies under, this Agreement to the same extent as if they were
parties thereto, except to the extent specifically limited under the terms of
their assignment. Notwithstanding any provision to the contrary contained in
this Agreement, with respect to each Mortgage Loan sold to Buyer that is
subsequently sold to ▇▇▇▇▇▇ ▇▇▇, in addition to the other rights and remedies
granted herein, ▇▇▇▇▇▇ Mae shall have, and may exercise any and all rights and
remedies that are available to ▇▇▇▇▇▇ ▇▇▇ under the ▇▇▇▇▇▇ Mae Incorporated
Documents as a result of a breach of any of the ▇▇▇▇▇▇ ▇▇▇ Representations and
Warranties. ▇▇▇▇▇▇ Mae's definition or determination of what event constitutes a
breach shall be determinable by ▇▇▇▇▇▇ ▇▇▇ under the terms of the ▇▇▇▇▇▇ Mae
Incorporated Documents. All rights and remedies granted herein are cumulative
and non-exclusive, and the exercise of any one shall not preclude the exercise
of others.
Section 9.08. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same agreement.
Section 9.09. Repurchase Transactions.
Buyer may in its sole discretion engage in repurchase transactions with
the Purchased Mortgage Assets or otherwise pledge or hypothecate the Purchased
Mortgage Assets with a counterparty of Buyer's choice; provided, however, that
no such transaction by Buyer shall relieve Buyer of its obligations to Seller in
connection with the repurchase by Seller of any Purchased Mortgage Assets in
accordance with the terms of this Agreement and that, upon demand by Seller,
Buyer shall redeliver to Seller such repurchased Purchased Mortgage Assets as
are specifically identified by Seller free and clear of any liens or
encumbrances created, or permitted or suffered to be created, by Buyer.
53
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SELLER AND SERVICER: PULTE MORTGAGE CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President/Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BUYER: PULTE FUNDING, INC.
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇ ▇'▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
54
EXHIBIT A
FORM OF
DEFERRED PURCHASE PRICE NOTE
________, 20__
FOR VALUE RECEIVED, PULTE FUNDING, INC., a Michigan corporation (the
"Buyer"), hereby promises to pay to PULTE MORTGAGE CORPORATION, a Delaware
corporation (the "Seller") the principal amount of this Note, determined as
described below, together with interest thereon at a rate per annum equal at all
times to the Pricing Rate for periods of one month, in each case in lawful money
of the United States of America. Capitalized terms used herein but not defined
herein shall have the meanings assigned to such terms in the Master Repurchase
Agreement dated as of December 22, 2000 among the Seller and the Buyer (such
agreement, as it may from time to time be amended, restated or otherwise
modified in accordance with its terms, the "Master Repurchase Agreement"), as
modified by the Amended and Restated Addendum to Master Repurchase Agreement
thereto, dated as of August 23, 2002 (the "Addendum Agreement" and, together
with the Master Repurchase Agreement the "Repurchase Agreement"). This Note is
the note referred to in the definition of "Deferred Purchase Price" in the
Repurchase Agreement.
The aggregate principal amount of this Note at any time shall be equal
to the difference between (a) the sum of the aggregate principal amount of this
Note on the date of the issuance hereof and each addition to the principal
amount of this Note pursuant to the terms of Paragraph 3 of the Master
Repurchase Agreement minus (b) the aggregate amount of all payments made in
respect of the principal amount of this Note, in each case, as recorded on the
schedule annexed to and constituting a part of this Note, but failure to so
record shall not affect the obligations of the Buyer to the Seller.
The entire principal amount of this Note shall be due and payable on
the date one year after the Facility Termination Date or such later date as may
be agreed in writing by the Seller and the Buyer. The principal amount of this
Note may, at the option of the Buyer, be prepaid without penalty in whole at any
time or in part from time to time. Interest on this Note shall be paid in
arrears on each Settlement Date, at maturity and thereafter on demand. All
payments hereunder shall be made by wire transfer of immediately available funds
to such account of the Seller as the Seller may designate in writing.
Notwithstanding any other provisions contained in this Note, in no
event shall the rate of interest payable by the Buyer under this Note exceed the
highest rate of interest permissible under applicable law.
The indebtedness evidenced by this Deferred Purchase Note is
subordinated to the prior payment in full of all of the Buyer's obligations
under the Restated Loan Agreement. By its acceptance of this Deferred Purchase
Price Note, the Seller hereby agrees that the subordination provisions contained
herein are for the direct benefit of, and may be enforced by, the Lenders, the
Administrative Agent, the Collateral Agent, and/or any of their assignees
(collectively, the
"Senior Claimants") under the Restated Loan Agreement. Until the date on which
the Advances outstanding under (and as defined in) the Restated Loan Agreement
have been repaid in full and all other obligations of the Buyer thereunder (all
such obligations, collectively, the "Senior Claim") have been indefeasibly
satisfied in full, the Seller shall not demand, accelerate, ▇▇▇ for, take,
receive or accept from the Buyer, directly or indirectly, in cash or other
property or by set-off or any other manner (including, without limitation, from
or by way of collateral) any payment or security of all or any of the
indebtedness under this Deferred Purchase Price Note or exercise any remedies or
take any action or proceeding to enforce the same; provided, however, that
nothing in this paragraph shall restrict the Buyer from paying, or the Seller
from requesting, any payments under this Deferred Purchase Price Note so long as
the Buyer is not required under the Restated Loan Agreement to set aside for the
benefit of, or otherwise pay over to, any of the Senior Claimants the funds used
for such payments and further provided that no Event of Default shall have
occurred and be continuing and the making of such payment would not otherwise
violate the terms and provisions of the Restated Loan Agreement. Should any
payment, distribution or security or proceeds thereof be received by the Seller
in violation of the immediately preceding sentence, the Seller agrees that such
payment shall be segregated, received and held in trust for the benefit of, and
deemed to be the property of, and shall be immediately paid over and delivered
to the Collateral Agent for the benefit of the Senior Claimants.
The Buyer hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever.
Neither this Note, nor any right of the Seller to receive payments
hereunder, shall, without the prior written consent of the Buyer and (so long as
the Restated Loan Agreement remains in effect or any amounts remain outstanding
thereunder) the Administrative Agent under the Restated Loan Agreement, be
assigned, transferred, exchanged, pledged, hypothecated, participated or
otherwise conveyed.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW WHICH SHALL APPLY HERETO).
PULTE FUNDING, INC.
By: _______________________________
Title:
Name:
SCHEDULE TO DEFERRED PURCHASE PRICE NOTE
Addition to Principal Amount of Principal Unpaid Principal Notation Made
Date Amount Paid or Prepaid Balance By
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EXHIBIT B
FORM OF
▇▇▇▇ OF SALE AND
BLANKET ASSIGNMENT OF ELIGIBLE MORTGAGE ASSETS
▇▇▇▇ OF SALE, dated as of _____________, 20__, from PULTE MORTGAGE
CORPORATION, a Delaware corporation, (hereinafter, together with its successors
and assigns, the "Seller"), to PULTE FUNDING, INC., a Michigan corporation,
(hereinafter, together with its successors and assigns, the "Buyer"). All terms
used herein which are not defined herein shall have the meanings given to them
in the Master Repurchase Agreement, dated as of December 22, 2000, as amended by
the Amended and Restated Addendum to Master Repurchase Agreement, dated as of
August 23, 2002, (the "Agreement") by and among the Seller, as seller, and
Buyer, as buyer.
WHEREAS, pursuant to the Agreement, the Seller agreed to grant, sell,
assign, convey, transfer and deliver to the Buyer, from time to time, certain
Eligible Mortgage Assets.
NOW, THEREFORE, in consideration of the payment of the Purchase Price
for the Eligible Mortgage Assets set forth on Schedule 1 attached hereto and
made a part hereof (the "Purchased Eligible Mortgage Assets"), and other good
and valuable consideration, the receipt of which is hereby acknowledged, and
intending to be legally bound hereby, the Seller by these presents does hereby
sell, convey, grant, transfer, assign, and set over to, subject to the terms of
the Agreement, Buyer, its successors and assigns, all of the Seller's right,
title and interest, legal or equitable, in and to the Purchased Eligible
Mortgage Assets. The terms of this ▇▇▇▇ of Sale shall not supersede the terms of
the Agreement.
IN WITNESS WHEREOF, the Seller has caused this ▇▇▇▇ of Sale to be
executed as of the date written above.
SELLER: PULTE MORTGAGE CORPORATION
By:
Name:
Title:
Schedule 1 to ▇▇▇▇ of Sale
Purchased Eligible Mortgage Assets
[Attached]
SCHEDULE I
TRADE NAMES
None
SCHEDULE II
APPROVED INVESTORS
▇▇▇▇▇'▇ S&P FITCH
TAKE-OUT INVESTORS LIMIT LT/ST LT/ST LT/ST RATED ENTITY
------------------------------------------------------------------------------------------------------------------------------------
ABN AMRO Incorporated 100%
Astoria Financial Corp. 10% Ba3 ▇▇ ▇▇▇▇▇'▇: JS
Aurora Loan Services, Inc. 25% NR AAA S&P: Section
BNP Paribas Securities Corp. 100%
Banc of America Securities LLC 100%
Bank One Corporation 100% A1 ▇.▇. ▇▇▇▇▇'▇: JS
Banc One Capital Markets, Inc. 100%
Banc of America Securities LLC 100%
Bank of America Mortgage (formerly Nationsbanc
Mortgage Corp.) 100% Aa3/P-1 A+/A1 ▇▇▇▇▇'▇: SU S&P: SU
Barlays Capital Inc. 100%
Bear, ▇▇▇▇▇▇▇ & Co., Inc. 100%
Charter One Financial Inc. 25% NR BBB S&P: SU
Chase Financial Corp. 100% NR ▇▇
▇▇▇▇▇ Manhattan Mortgage Corporation 100% A1 AAA ▇▇▇▇▇'▇: SB S&P: Section
Chase Securities Inc. 100%
CIBC World Markets Corp. 100%
Citicorp Mortgage Corp. 100% Aaa NR Citi Mtg. Sec. ▇▇▇▇▇'▇:
SS S&P: Section
Commercial Federal Corp. 10% B1 BB+ ▇▇▇▇▇'▇: SB S&P: SB
Countrywide 100% A3/P-2 A/A1 ▇▇▇▇▇'▇: SU S&P: SU
Credit Suisse First Boston 100%
Credit Suisse First Boston Corporation/▇▇▇▇▇▇▇▇▇,
Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation 100%
Daiwa Securities America, Inc. 100%
Deutsche Bank Securities Inc. 100%
Dresdner Kleinwort ▇▇▇▇▇▇ North America LLC 100%
▇▇▇▇▇'▇ S&P FITCH
TAKE-OUT INVESTORS LIMIT LT/ST LT/ST LT/ST RATED ENTITY
------------------------------------------------------------------------------------------------------------------------------------
Federal Home Mortgage Corp. 100% Aaa/P-1 AAA/ A1+ ▇▇▇▇▇'▇: SU S&P: SU
Federal National Mortgage Association 100% Aaa/P-1 AAA ▇▇▇▇▇'▇: SU S&P: SU
Fidelity BancShares, Inc. 10% NR NR
First Franklin 10% NR NR
First Nationwide Mortgage Corporation 25% NR NR
First Union Mortgage Corporation 100% A1/P-1 A/A1 First Union Corp. ▇▇▇▇▇'▇:
SU S&P: SU
Fleet Mortgage group 100% A2 A+ ▇▇▇▇▇'▇: SS S&P: Section
Fuji Securities Inc. 100%
GE Capital Mortgage Services Inc. 100% Aaa AAA ▇▇▇▇▇'▇: SS S&P: Section
GMAC Mortgage 100% NR AAA ▇▇▇▇▇'▇: SS S&P: Section
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 100%
Government National Mortgage Association. 100% Aaa AAA
Greenwich Capital Markets, Inc. 100%
Greenpoint Mortgage (formerly Headlands Mortgage) 50% ▇▇▇▇ ▇▇▇/▇▇ ▇▇▇▇▇▇▇▇▇▇ Bank ▇▇▇▇▇'▇:
SU S&P : SU
HSBC Securities (USA) Inc. 100%
Homeside Lending Inc. 100% A1 A+/A1 ▇▇▇▇▇'▇: SU S&P: SU
Indy Mac (Independent National Mortgage Corp.) 100% BBB-
▇. ▇. ▇▇▇▇▇▇ Securities, Inc. 100%
Leader Mortgage Corp. 10% NR ▇▇
▇▇▇▇▇▇ Brothers Inc. 100%
Long Beach Financial Corp. 25% NR ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Government Securities Inc. 100%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 100%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Securities Inc. 100%
Nomura Securities International, Inc. 100%
Ohio Savings Financial Corp. (Ohio Savings Bank) 10% NR NR
PaineWebber Incorporated 100%
Pulte Corporation 25% BBB Baa3 ▇▇▇▇▇'▇: SU S&P: ▇▇
▇▇▇▇▇'▇ S&P FITCH
TAKE-OUT INVESTORS LIMIT LT/ST LT/ST LT/ST RATED ENTITY
------------------------------------------------------------------------------------------------------------------------------------
Regions Mortgage, Inc. (Regions Bank) 100% Aa3/P-1 A+/A1
Residential Mortgage Inc. 10% NR ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 100%
▇▇ ▇▇▇▇▇ Securities Corporation 100%
Saxon Mortgage, Inc. 100% A ▇▇ ▇▇▇▇▇'▇: SU
UBS Warburg LLC 100%
Washington Mutual (formerly Alta Residential 100% A2 A- ▇▇▇▇▇'▇: SU S&P: SU
Mortgage)
▇▇▇▇▇ Fargo Funding, Inc. (formerly Norwest 100% Aa2/ P-1 A+/A1 ▇▇▇▇▇ Fargo & Co.▇▇▇▇▇'▇:
mortgage) SU S&P: ▇▇
▇▇▇▇▇ Fargo Mortgage Resources (formerly 100% Aa2/ P-2 A+/A2 ▇▇▇▇▇ Fargo & Co.▇▇▇▇▇'▇:
Director's Acceptance) SU S&P: SU
Zions First National Bank 100%
Colorado Housing Finance Authority 10% Aaa AA-/A1+ ▇▇▇▇▇'▇: RB S&P: SS
Dakota County Bond (Minnesota) 10% Aaa ▇▇ ▇▇▇▇▇'▇: RB
Florida Housing Finance Agency 10% Aa1 ▇▇ ▇▇▇▇▇'▇: RB
Housing Finance Authority of Broward County (FL) 10% Aaa ▇▇ ▇▇▇▇▇'▇: SS
Illinois Housing Development Authority 10% Aaa AA-/A1+ ▇▇▇▇▇'▇: RB S&P: SS
Maryland Housing Opportunities Commission (HOC) 10% NR NR
Minnesota Housing Finance Agency 10% NR NR
Nevada State Housing Finance Agency 10% NR NR
New Jersey Housing Finance Agency 10% NR NR
North Carolina HFA 10% Aa3 AA-/A1+ ▇▇▇▇▇'▇: RB S&P: SS
The Industrial Development Authority of the
County of Pima, AZ 10% Ba3 B+ ▇▇▇▇▇'▇: SU S&P: SU
The Industrial Development Authority of the
County of Maricopa, AZ 10% WR A/A1 ▇▇▇▇▇'▇: RB S&P: SU
Pinellas County Finance Authority 10% Aaa A- ▇▇▇▇▇'▇: SS S&P: SS
Texas Department of Housing and Community Affairs
(TDHCA) 10% Aaa AA/A1+ ▇▇▇▇▇'▇: RB S&P: SS
Texas Veteran Land Bond and bon VLB Loans 10% NR NR
JS: Junior Subordinated
RB: Revenue Bonds
SB: Subordinated
SS: Senior Secured
SU: Senior Unsecured
SCHEDULE III
LITIGATION
None
