EXHIBIT 10.1
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MASTER LOAN AND SECURITY AGREEMENT
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DATED AS OF FEBRUARY 15, 2005
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MORTGAGEIT, INC.
AS BORROWER
MORTGAGEIT HOLDINGS, INC.
AS BORROWER
AND
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
AS LENDER
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TABLE OF CONTENTS
Page
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Section 1. Definitions and Accounting Matters......................................1
1.01 Certain Defined Terms...................................................1
1.02 Accounting Terms and Determinations....................................14
Section 2. Advances, Note and Prepayments.........................................14
2.01 Advances...............................................................14
2.02 Notes..................................................................15
2.03 Procedure for Borrowing................................................15
2.04 Limitation on Types of Advances; Illegality............................16
2.05 Repayment of Advances; Interest........................................16
2.06 Mandatory Prepayments or Pledge........................................17
2.07 Optional Prepayments...................................................17
2.08 Requirements of Law....................................................17
2.09 Purpose of Advances....................................................18
Section 3. Payments; Computations; Taxes..........................................18
3.01 Payments...............................................................18
3.02 Computations...........................................................19
3.03 U.S. Taxes.............................................................19
Section 4. Collateral Security....................................................19
4.01 Collateral; Security Interest..........................................19
4.02 Further Documentation..................................................21
4.03 Changes in Locations, Name, etc........................................21
4.04 Lender's Appointment as Attorney-in-Fact...............................21
4.05 Performance by Lender of Borrower's Obligations........................22
4.06 Proceeds...............................................................22
4.07 Remedies...............................................................22
4.08 Limitation on Duties Regarding Presentation of Collateral..............23
4.09 Powers Coupled with an Interest........................................23
4.10 Release of Security Interest...........................................24
Section 5. Conditions Precedent...................................................24
5.01 Initial Advance........................................................24
5.02 Initial and Subsequent Advances........................................25
Section 6. Representations and Warranties.........................................27
6.01 Existence..............................................................27
6.02 Financial Condition....................................................27
6.03 Litigation.............................................................27
6.04 No Breach..............................................................27
6.05 Action.................................................................27
6.06 Approvals..............................................................28
6.07 Margin Regulations.....................................................28
6.08 Taxes..................................................................28
6.09 Investment Company Act.................................................28
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6.10 No Legal Bar...........................................................28
6.11 No Default.............................................................28
6.12 Collateral; Collateral Security........................................28
6.13 Chief Executive Office; Chief Operating Office.........................29
6.14 Location of Books and Records..........................................29
6.15 True and Complete Disclosure...........................................29
6.16 Tangible Net Worth; Liquidity..........................................29
6.17 ERISA..................................................................29
6.18 Licenses...............................................................29
6.19 Relevant States........................................................29
6.20 True Sales.............................................................29
6.21 No Burdensome Restrictions.............................................30
6.22 Subsidiaries...........................................................30
6.23 Origination and Acquisition of Mortgage Loans..........................30
6.24 No Adverse Selection...................................................30
6.25 Borrower Solvent; Fraudulent Conveyance................................30
6.26 Insured Closing Letter.................................................30
6.27 Escrow Agreement.......................................................30
Section 7. Covenants of the Borrower..............................................31
7.01 Financial Statements...................................................31
7.02 Litigation.............................................................32
7.03 Existence, Etc.........................................................33
7.04 Prohibition of Fundamental Changes.....................................33
7.05 Borrowing Base Deficiency..............................................33
7.06 Notices................................................................33
7.07 Servicing..............................................................34
7.08 MERS...................................................................34
7.09 Underwriting Guidelines................................................34
7.10 Lines of Business......................................................34
7.11 Transactions with Affiliates...........................................34
7.12 Use of Proceeds........................................................34
7.13 Reserved...............................................................34
7.14 Limitation on Sale of Assets...........................................35
7.15 Limitation on Distributions............................................35
7.16 Financial Condition Covenants..........................................35
7.17 Maintenance of Tangible Net Worth......................................35
7.18 Maintenance of Ratio of Total Indebtedness to Tangible Net Worth.......35
7.19 Restricted Payments....................................................35
7.20 Servicing Transmission.................................................35
7.21 No Amendment or Waiver.................................................35
7.22 Insurance..............................................................35
7.23 Further Identification of Collateral...................................36
7.24 Mortgage Loan Determined to be Defective...............................36
7.25 Interest Rate Protection Agreements....................................36
7.26 Certificate of a Responsible Officer of the Borrower...................36
7.27 Reserved...............................................................36
7.28 Committed Warehouse Facility...........................................36
Section 8. Events of Default......................................................36
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Section 9. Remedies Upon Default..................................................38
Section 10. No Duty on Lender's Part...............................................39
Section 11. Miscellaneous..........................................................39
11.01 Waiver.................................................................39
11.02 Notices................................................................39
11.03 Indemnification and Expenses...........................................39
11.04 Amendments.............................................................40
11.05 Successors and Assigns.................................................40
11.06 Survival...............................................................40
11.07 Captions...............................................................40
11.08 Counterparts...........................................................40
11.09 Loan Agreement Constitutes Security Agreement; Governing Law...........40
11.10 SUBMISSION TO JURISDICTION; WAIVERS....................................41
11.11 WAIVER OF JURY TRIAL...................................................41
11.12 Acknowledgments........................................................41
11.13 Hypothecation or Pledge of Collateral..................................41
11.14 Assignments; Participations............................................42
11.15 Servicing..............................................................42
11.16 Periodic Due Diligence Review..........................................43
11.17 Set-Off................................................................44
11.18 Intent.................................................................44
11.19 Replacement by Repurchase Agreement....................................44
11.20 Joint and Several Liability; Cross-Default.............................44
11.21 Entire Agreement.......................................................44
SCHEDULES
SCHEDULE 1 Representations and Warranties re: Mortgage Loans
SCHEDULE 2 Filing Jurisdictions and Offices
SCHEDULE 3 Relevant States
SCHEDULE 4 Subsidiaries
EXHIBITS
EXHIBIT A Form of Promissory Note
EXHIBIT B Form of Custodial Agreement
EXHIBIT C Form of Opinion of Counsel to the Borrower
EXHIBIT D Form of Notice of Borrowing and Pledge
EXHIBIT E Underwriting Guidelines
EXHIBIT F Required Fields for Servicing Transmission
EXHIBIT G Required Fields for Mortgage Loan Data Transmission
EXHIBIT H Form of Borrowing Base Certificate
EXHIBIT I Form of Confidentiality Agreement
EXHIBIT J Form of Instruction Letter
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MASTER LOAN AND SECURITY AGREEMENT
MASTER LOAN AND SECURITY AGREEMENT, dated as of February 15, 2005,
between MORTGAGEIT, INC., a New York corporation and MORTGAGEIT HOLDINGS, INC. a
Maryland corporation (each, a "Borrower" and collectively, the "Borrower" or the
"Borrowers") and GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation (the "Lender").
RECITALS
Each Borrower wishes to obtain financing from time to time to provide
interim funding for the origination or acquisition of certain Mortgage Loans (as
defined herein), which Mortgage Loans shall secure Advances (as defined herein)
to be made by the Lender hereunder.
The Lender has agreed, subject to the terms and conditions of this
Loan Agreement (as defined herein), to provide such financing to the Borrower.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS.
1.01 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Loan Agreement in the singular to have the same meanings when
used in the plural and vice versa):
"Accepted Servicing Practices" shall mean, with respect to any
Mortgage Loan, accepted and prudent mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type as
such Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located and in a manner at least equal in quality to the servicing the Borrower
or Borrower's designee provides to mortgage loans which they own in their own
portfolio.
"Adjusted Indebtedness" shall mean, for any Person, Indebtedness less
only those obligations created, issued or incurred by such Person for borrowed
money by the issuance and sale of debt securities that are sponsored, created,
issued or incurred by such Person or its Affiliates in connection with
securitizations.
"Advance" shall have the meaning specified in Section 2.01(a) hereof.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" (together with the
correlative meanings of "controlled by" and "under common control with") means
possession, directly or indirectly, of the power (a) to vote 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
directors or managing general partners (or their equivalent) of such Person, or
(b) to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"ALTA" means the American Land Title Association.
"Applicable Collateral Percentage" shall mean, (i) for the first 180
days following the date such Eligible Mortgage Loan first becomes subject to the
terms of this Agreement, with respect to each Advance and each Eligible Mortgage
Loan:
(a) in the case of "A" or "Alt-A" credit first lien Dry Loans (other
than HELOCs): (i) for the first 120 days following the date such Mortgage
Loan first becomes subject to the terms of this Agreement), 98% and (ii)
thereafter 95%;
(b) in the case of Subprime Mortgage Loans, Second Lien Mortgage Loans
and HELOCS that are Dry Loans, (i) for the first 120 calendar days
following the date such Mortgage Loan first becomes subject to the terms of
this Agreement), 97% and (ii) thereafter 94%; and
(c) in the case of Wet Loans:
(1) for which all Required Documents have not been delivered for
0 to 7 Business Days following the date each such Wet Loan first
becomes subject to the terms of this Agreement, 97%, and (2) for which
all Required Documents have not been delivered within 7 Business Days
following the date each such Wet Loan first becomes subject to the
terms of this Agreement, 0%.
The Applicable Collateral Percentage of any Mortgage Loan which is not
an Eligible Mortgage Loan shall be 0%.
"Applicable Margin" shall mean with respect to Advances that are
Tranche A Advances and Tranche B Advances respectively, and which are secured by
the Mortgage Loans, the applicable rate per annum set forth below for each day
that such Advances shall be so secured:
Tranche A Advances 0.60% if the Maximum Credit is $250,000,000, and
0.65% if the Maximum Credit exceeds $250,000,000
Tranche B Advances 0.70% if the Maximum Credit is $250,000,000, and
0.75% if the Maximum Credit exceeds $250,000,000
"Appraised Value" shall mean the value set forth in an appraisal made
in connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
"Assignment of Mortgage" shall mean, with respect to any Mortgage, an
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the assignment and pledge of
the Mortgage.
"Attorney Bailee Letter" shall have the meaning assigned to such term
in the Custodial Agreement.
"Bankruptcy Code" shall mean the United States Bankruptcy Code of
1978, as amended from time to time.
"Best's" means Best's Key Rating Guide, as the same shall be amended
from time to time.
"Borrower" shall mean with respect to any Advance, the entity that
requested such Advance and to whom such Advance was funded, which entity shall
be either MortgageIT, Inc. or MortgageIT Holdings, Inc., as the case may be.
"Borrowers" shall mean collectively, MortgageIT, Inc. and MortgageIT
Holdings, Inc.
"Borrowing Base" shall mean the aggregate Collateral Value of all
Eligible Mortgage Loans that have been, and remain pledged to the Lender
hereunder.
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"Borrowing Base Certificate" shall mean the certificate prepared by
the Lender substantially in the form of Exhibit H, attached hereto.
"Borrowing Base Deficiency" shall have the meaning provided in Section
2.06 hereof.
"Business Day" shall mean any day other than (i) a Saturday or Sunday,
(ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New
York, the Custodian or banking and savings and loan institutions in the State of
New York, Connecticut or California or the City of New York or the city or state
in which the Custodian's offices are located are closed, or (iii) a day on which
trading in securities on the New York Stock Exchange or any other major
securities exchange in the United States is not conducted.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this Loan
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Cash Equivalents" shall mean (a) securities with maturities of 90
days or less from the date of acquisition issued or fully guaranteed or insured
by the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of 90 days or less from the
date of acquisition and overnight bank deposits of any commercial bank having
capital and surplus in excess of $500,000,000, (c) repurchase obligations of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than seven days with respect to securities issued or
fully guaranteed or insured by the United States Government, (d) commercial
paper of a domestic issuer rated at least A-1 or the equivalent thereof by
Standard and Poor's Ratings Group ("S&P") or P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc. ("Moody's") and in either case maturing within
90 days after the day of acquisition, (e) securities with maturities of 90 days
or less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's, (f) securities with maturities of 90
days or less from the date of acquisition backed by standby letters of credit
issued by any commercial bank satisfying the requirements of clause (b) of this
definition or, (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Change of Control" means the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of outstanding shares of voting stock of any Borrower at
any time if after giving effect to such acquisition more than 50% of the
combined voting power of the continuing or surviving entity's shares is owned by
Persons who were not shareholders of such Person immediately prior to such
acquisition.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall have the meaning assigned to such term in Section
4.01(b) hereof.
"Collateral Value" shall mean with respect to each Mortgage Loan, the
lesser of (a) the product of (x) the Applicable Collateral Percentage and (y)
the outstanding principal balance of such Mortgage Loan, and (b) the Market
Value thereof; provided that, the Collateral Value shall be deemed to be zero
with respect to each Mortgage Loan:
(1) in respect of which there is a material breach of a representation
and warranty set forth on Schedule 1 (assuming each representation and
warranty is made as of the date
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Collateral Value is determined) or there is an Exception which was not
otherwise waived by Lender;
(2) which the Lender determines, in its reasonable discretion, is not
eligible for sale in the secondary market or for securitization
without unreasonable credit enhancement;
(3) which has been released from the possession of the Custodian under
Section 5(a) of the Custodial Agreement to the Borrower or its bailee
for a period in excess of seven (7) Business Days;
(4) which has been released from the possession of the Custodian (i)
under Section 5(b) of the Custodial Agreement under any Transmittal
Letter in excess of the time period stated in such Transmittal Letter
for release, or (ii) under Section 5(c) of the Custodial Agreement
under an Attorney Bailee Letter, from and after the date such
Attorney's Bailee Letter is terminated or ceases to be in full force
and effect;
(5) which has been subject to this Loan Agreement for greater than 180
calendar days; or if such Mortgage Loan has been subject to this Loan
Agreement for greater than 120 calendar days and the Collateral Value
of such Mortgage Loan, when added to the Collateral Value of all other
Mortgage Loans that have been subject to this Loan Agreement for
greater than 120 calendar days exceeds 10% of the aggregate
outstanding principal balance of all Advances;
(6) in respect of which (a) the related Mortgaged Property is the
subject of a foreclosure proceeding or (b) the related Mortgage Note
has been extinguished under relevant state law in connection with a
judgment of foreclosure or foreclosure sale or otherwise;
(7) if (a) the related Mortgage Note or the related Mortgage is not
genuine or is not the legal, valid, binding and enforceable obligation
of the maker thereof, subject to no right of rescission, set-off,
counterclaim or defense, or (b) such Mortgage, is not a valid,
subsisting, enforceable and perfected first or second lien on the
Mortgaged Property (or, in the case of a Cooperative Loan, on the
related Cooperative Shares and Proprietary Lease);
(8) in respect of which the related Mortgagor is the subject of a
bankruptcy proceeding;
(9) if the Mortgagor has not made its first contractually due payment
on the related Mortgage Loan within 30 days of the related due date
therefor;
(10) that was originated or acquired by the Borrower more than 45 days
prior to the date such Mortgage Loan was first subject to the terms of
this Loan Agreement;
(11) if such Mortgage Loan is thirty (30) or more days past due with
respect to any scheduled payment of principal or interest; or
(12) if such Mortgage Loan is a Wet Loan and the Collateral Value of
such Mortgage Loan when added to the aggregate Collateral Value of all
other Wet Loans exceeds (A) $75,000,000 if such calculation is
performed on any day which occurs during the period from the fifth day
immediately preceding the last day of each calendar month through and
including the fifth day of the next succeeding calendar month, or (B)
$50,000,000 on any other date;
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(13) which is a HELOC and the Collateral Value of such HELOC, when
added to the Collateral Value of all other HELOCs that secure Advances
hereunder exceeds $50,000,000; or
(14) which is a Subprime Mortgage Loan and the Collateral Value of
such Subprime Mortgage Loan, when added to the Collateral Value of all
other Subprime Mortgage Loans that secure Advances hereunder exceeds
$75,000,000;
"Combined LTV or CLTV" means with respect to any Mortgage Loan, the
ratio of (i) the original outstanding principal amount of the Mortgage Loan and
any other mortgage loan which is secured by a lien on the related Mortgaged
Property to (ii) the lesser of (a) the Appraised Value of the Mortgaged Property
at origination or (b) if the Mortgaged Property was purchased within 12 months
of the origination of the Mortgage Loan, the purchase price of the Mortgaged
Property.
"Contractual Obligation" shall mean as to any Person, any material
provision of any agreement, instrument or other undertaking to which such Person
is a party or by which it or any of its property is bound or any material
provision of any security issued by such Person.
"Cooperative Corporation" shall mean with respect to any Cooperative
Loan, the cooperative apartment corporation that holds legal title to the
related Cooperative Project and grants occupancy rights to units therein to
stockholders through Proprietary Leases or similar arrangements.
"Cooperative Loan" shall mean a Mortgage Loan that is secured by a
first lien on and a perfected security interest in Cooperative Shares and the
related Proprietary Lease granting exclusive rights to occupy the related
Cooperative Unit in the building owned by the related Cooperative Corporation.
"Cooperative Project" shall mean with respect to any Cooperative Loan,
all real property and improvements thereto and rights therein and thereto owned
by a Cooperative Corporation including without limitation the land, separate
dwelling units and all common elements.
"Cooperative Shares" shall mean with respect to any Cooperative Loan,
the shares of stock issued by a Cooperative Corporation and allocated to a
Cooperative Unit and represented by a stock certificate.
"Cooperative Unit" shall mean with respect to any Cooperative Loan, a
specific unit in a Cooperative Project.
"Custodial Agreement" shall mean the Custodial Agreement, dated as of
the date hereof, among the Borrowers, the Custodian and the Lender,
substantially in the form attached hereto as Exhibit B, as the same shall be
modified and supplemented and in effect from time to time.
"Custodian" shall mean Deutsche Bank Trust Company Americas, its
successors and permitted assigns.
"Custodian Loan Transmission" shall have the meaning assigned thereto
in the Custodial Agreement.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
"Disbursement Account" shall mean the account established by the
Lender pursuant to which funds shall be disbursed to fund any Wet Loan.
"Dollars" and "$" shall mean lawful money of the United States of
America.
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"Dry Loan" shall mean a first or second lien Mortgage Loan which is
underwritten in accordance with the Underwriting Guidelines which Mortgage File
contains all required Mortgage Loan Documents.
"Due Date" means the day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
"Due Diligence Review" shall mean the performance by the Lender of any
or all of the reviews permitted under Section 11.16 hereof with respect to any
or all of the Mortgage Loans or the Borrower or related parties, as desired by
the Lender from time to time.
"Effective Date" shall mean the date upon which the conditions
precedent set forth in Section 5.01 shall have been satisfied.
"Eligible Mortgage Loan" shall mean a Mortgage Loan secured by a first
or second mortgage lien (as reflected on the Mortgage Loan Data Transmission) on
a one to four family residential property (or, in the case of a Cooperative
Loan, on the Cooperative Shares and Proprietary Lease granting exclusive rights
to occupy a Cooperative Unit) and as to which (i) the representations and
warranties in Section 6.12 and 6.23 and Schedule 1 hereof are correct, (ii) was
originated or acquired by the Borrower in accordance with the Borrower's or
Lender approved third party's Underwriting Guidelines and (iii) such other
customary criteria for eligibility determined by the Lender shall have been
satisfied.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which Borrower is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which Borrower is
a member.
"Escrow Payments" means with respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
"Event of Default" shall have the meaning provided in Section 8
hereof.
"Exception" shall have the meaning assigned thereto in the Custodial
Agreement.
"Exception Report" shall mean the exception report prepared by the
Custodian pursuant to the Custodial Agreement.
"Xxxxxx Xxx" shall mean Xxxxxx Mae, or any successor thereto.
"First Lien" shall mean with respect to each Mortgaged Property, the
lien of the mortgage, deed of trust or other instrument securing a mortgage note
which creates a first lien on the Mortgaged Property.
"Xxxxxxx Mac" shall mean Xxxxxxx Mac, or any successor thereto.
"Funding Date" shall mean the date on which an Advance is made
hereunder.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States of America.
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"Governmental Authority" shall mean any nation or government, any
state or other political subdivision, agency or instrumentality thereof, any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any court or arbitrator having
jurisdiction over such Person, any of its Subsidiaries or any of its properties.
"Gross Margin" means with respect to each adjustable rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note.
"Guarantee" shall mean, as to any Person, any obligation of such
Person directly or indirectly guaranteeing any Indebtedness of any other Person
or in any manner providing for the payment of any Indebtedness of any other
Person or otherwise protecting the holder of such Indebtedness against loss
(whether by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, or to take-or-pay or otherwise),
provided that the term "Guarantee" shall not include (i) endorsements for
collection or deposit in the ordinary course of business, or (ii) obligations to
make servicing advances for delinquent taxes and insurance, or other obligations
in respect of a Mortgaged Property, to the extent required by the Lender. The
amount of any Guarantee of a Person shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith. The terms "Guarantee" and "Guaranteed" used as verbs shall have
correlative meanings.
"HELOC" shall mean a closed end home equity line of credit, or any
previously open end home equity line of credit which has converted to a closed
end loan, which is secured by a first or second mortgage lien and underwritten
in accordance with the Borrower's or Lender approved third party's Underwriting
Guidelines.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for account of such Person; (e) Capital Lease Obligations of such Person; (f)
obligations of such Person under repurchase agreements or like arrangements; (g)
indebtedness of others Guaranteed by such Person; (h) all obligations of such
Person incurred in connection with the acquisition or carrying of fixed assets
by such Person; (i) indebtedness of general partnerships of which such Person is
a general partner; and (j) any other indebtedness of such Person by a note,
bond, debenture or similar instrument.
"Index" means with respect to each adjustable rate Mortgage Loan, the
index set forth in the related Mortgage Note for the purpose of calculating the
interest rate thereon.
"Instruction Letter" shall mean a letter agreement between the
Borrower and each Subservicer substantially in the form of Exhibit J attached
hereto, in which such Persons acknowledge the Lender's security interest in the
Mortgage Loans, and agree to remit any collections with respect to the Mortgage
Loans as the Lender may so direct from time to time, which Instruction Letter
may be delivered by Lender to such Subservicer in its sole discretion.
"Insurance Proceeds" means with respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
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"Insured Closing Letter" shall have the meaning assigned to such term
in the Custodial Agreement.
"Interest Period" shall mean, with respect to any Advance, (i)
initially, the period commencing on the Funding Date with respect to such
Advance and ending on the calendar day prior to the next succeeding Payment
Date, and (ii) thereafter, each period commencing on the Payment Date of a month
and ending on the calendar day prior to the Payment Date of the next succeeding
month. Notwithstanding the foregoing, no Interest Period may end after the
Termination Date.
"Interest Rate Adjustment Date" means with respect to each adjustable
rate Mortgage Loan, the date, specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
"Interest Rate Protection Agreement" shall mean with respect to any or
all of the Mortgage Loans and/or Advances, any interest rate swap, cap or collar
agreement or any other applicable hedging arrangements providing for protection
against fluctuations in interest rates or the exchange of nominal interest
obligations, either generally or under specific contingencies entered into by
Borrower and reasonably acceptable to the Lender.
"Lender" shall have the meaning assigned thereto in the heading
hereto.
"LIBO Base Rate" shall mean with respect to each day an Advance is
outstanding (or if such day is not a Business Day, the next succeeding Business
Day), the rate per annum equal to the rate published by Bloomberg or, if such
rate is not available, the rate appearing at page 3750 of the Telerate Screen,
as one-month LIBOR on such date, and if such rate shall not be so quoted, the
rate per annum at which the Lender is offered Dollar deposits at or about 11:00
A.M. (eastern time), on such date by prime banks in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations in
respect of its Advances are then being conducted for delivery on such day for a
period of one month and in an amount comparable to the amount of the Advances to
be outstanding on such day.
"LIBO Rate" shall mean with respect to each Interest Period pertaining
to an Advance, a rate (reset on a monthly basis) per annum determined by the
Lender in its sole discretion in accordance with the following formula (rounded
upwards to the nearest l/100th of one percent), which rate as determined by the
Lender shall be conclusive, absent manifest error by the Lender:
LIBO Base Rate
--------------------------------------------
1.00 - LIBO Reserve Requirements
The LIBO Rate shall be calculated each Funding Date and Payment Date
commencing with the first Funding Date.
"LIBO Reserve Requirements" shall mean for any Interest Period for any
Advance, the aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements applicable to the Lender in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction with
respect thereto), dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
such Board) maintained by a member bank of such Governmental Authority. As of
the Effective Date, the LIBO Reserve Requirements shall be deemed to be zero.
"Lien" shall mean any mortgage, lien, pledge, charge, security
interest or similar encumbrance.
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"Loan Agreement" shall mean this Master Loan and Security Agreement,
as may be amended, supplemented or otherwise modified from time to time as
mutually agreed by the parties in writing.
"Loan Documents" shall mean collectively, this Loan Agreement, the
Note and the Custodial Agreement.
"Loan-to-Value Ratio" or "LTV" means with respect to any Mortgage
Loan, the ratio of the original outstanding principal amount of the Mortgage
Loan to the lesser of (a) the Appraised Value of the Mortgaged Property at
origination or (b) if the Mortgaged Property was purchased within 12 months of
the origination of the Mortgage Loan, the purchase price of the Mortgaged
Property.
"Market Value" shall mean the value, determined by the Lender in its
sole reasonable discretion, of the Mortgage Loans if sold in their entirety to a
single third-party purchaser or of any Mortgage Loan if it were part of a
package consisting of all of the Mortgage Loans and such package was sold in its
entirety to a single third-party purchaser. The Lender's determination of Market
Value shall be conclusive upon the parties, absent manifest error on the part of
the Lender. The Lender shall have the right to xxxx to market the Mortgage Loans
on a daily basis which Market Value with respect to one or more of the Mortgage
Loans may be determined to be zero. The Borrower acknowledges that the Lender's
determination of Market Value is for the limited purpose of determining
Collateral Value for lending purposes hereunder without the ability to perform
customary purchaser's due diligence and is not necessarily equivalent to a
determination of the fair market value of the Mortgage Loans achieved by
obtaining competing bids in an orderly market in which the originator/servicer
is not in default under a revolving debt facility and the bidders have adequate
opportunity to perform customary loan and servicing due diligence.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the property, business, operations, financial condition or prospects of the
Borrower, (b) the ability of the Borrower to perform in all material respects
its obligations under any of the Loan Documents to which it is a party, (c) the
validity or enforceability in all material respects of any of the Loan
Documents, (d) the rights and remedies of the Lender under any of the Loan
Documents, (e) the timely payment of the principal of or interest on the
Advances or other amounts payable in connection therewith or (f) the Collateral.
"Maximum Credit" shall mean Two Hundred Fifty Million Dollars
($250,000,000), or if the Lender and the Borrowers shall agree in writing within
120 days of the Effective Date, which agreement shall be in Lender's and
Borrowers' sole discretion, such higher amount not to exceed Four Hundred Fifty
Million Dollars ($450,000,000).
"MERS" shall mean Mortgage Electronic Registration Systems, Inc., a
Delaware corporation, or any successor in interest thereto.
"MERS Identification Number" shall mean the eighteen digit number
permanently assigned to each MERS Mortgage Loan.
"MERS Mortgage Loan" shall mean any Mortgage Loan as to which the
related Mortgage or Assignment of Mortgage has been recorded in the name of
MERS, as agent for the holder from time to time of the Mortgage Note, and which
is identified as a MERS Mortgage Loan on the related Mortgage Loan List.
"Monthly Payment" means the scheduled monthly payment of principal and
interest on a Mortgage Loan as adjusted in accordance with changes in the
Mortgage Interest Rate pursuant to the provisions of the Mortgage Note for an
adjustable rate Mortgage Loan.
"Mortgage" shall mean with respect to a Mortgage Loan, the mortgage,
deed of trust or other instrument, which creates a first lien or second lien (as
indicated on the Mortgage Loan Data
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Transmission) on either (i) with respect to a Mortgage Loan other than a
Cooperative Loan, the fee simple or leasehold estate in such real property or
(ii) with respect to a Cooperative Loan, the Proprietary Lease and related
Cooperative Shares, which in each case secures the Mortgage Note.
"Mortgaged Property" means the real property (including all
improvements, buildings, fixtures, building equipment and personal property
thereon and all additions, alterations and replacements made at any time with
respect to the foregoing) and all other collateral securing repayment of the
debt evidenced by a Mortgage Note.
"Mortgagee" means either Borrower or any subsequent holder of a
Mortgage Loan.
"Mortgage File" shall have the meaning assigned thereto in the
Custodial Agreement.
"Mortgage Interest Rate" means the annual rate of interest borne on a
Mortgage Note, which shall be adjusted from time to time with respect to
adjustable rate Mortgage Loans.
"Mortgage Interest Rate Cap" means with respect to an adjustable rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
"Mortgage Loan" shall mean a mortgage loan, including, without
limitation, any Subprime Mortgage Loan, HELOC or Cooperative Loan which the
Custodian has been instructed to hold for the Lender pursuant to the Custodial
Agreement, and which mortgage loan includes, without limitation, (i) a Mortgage
Note, the related Mortgage and all other Mortgage Loan Documents and (ii) all
right, title and interest of the Borrower in and to the Mortgaged Property
covered by such Mortgage (or, in the case of a Cooperative Loan, on the
Cooperative Shares and Proprietary Lease granting exclusive rights to occupy a
Cooperative Unit).
"Mortgage Loan Documents" shall mean, with respect to a Mortgage Loan,
the documents comprising the Mortgage File for such Mortgage Loan.
"Mortgage Loan List" shall mean the hard copy report provided by the
Borrower which shall include with respect to each Mortgage Loan to be included
as Collateral: (i) the Mortgage Loan number, (ii) the Mortgagor's name, (iii)
the original principal amount of the Mortgage Loan and (iv) the current
principal balance of the Mortgage Loan.
"Mortgage Loan Data Transmission" shall mean a computer-readable
magnetic or other electronic format incorporating the fields identified on
Exhibit G.
"Mortgage Note" shall mean the original executed promissory note or
other evidence of the indebtedness of a mortgagor/borrower with respect to a
Mortgage Loan.
"Mortgagor" means the obligor on a Mortgage Note.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
in Section 3(37) of ERISA to which contributions have been or are required to be
made by Borrower or any ERISA Affiliate and that is covered by Title IV of
ERISA.
"Net Income" shall mean, for any period, the net income of the
Borrower for such period as determined in accordance with GAAP.
"Net Worth" shall mean, with respect to any Person, an amount equal
to, on a consolidated basis, such Person's stockholder's equity, determined in
accordance with GAAP.
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"Note" shall mean the promissory note provided for by Section 2.02(a)
hereof for Advances and any promissory note delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Notice of Borrowing and Pledge" shall have the meaning assigned to
such term in Section 2.03(a).
"Payment Date" shall mean the 5th calendar day of each calendar month,
or if such day is not a Business Day, the next succeeding Business Day.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Exceptions" shall mean the exceptions to lien priority
including but not limited to: (i) the lien of current real property taxes and
assessments not yet due and payable; (ii) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record as
of the date of recording acceptable to mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy delivered to
the originator of the Mortgage Loan and (A) referred to or otherwise considered
in the appraisal (if any) made for the originator of the Mortgage Loan or (B)
which do not adversely affect the appraised value of the Mortgaged Property set
forth in such appraisal; (iii) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property ; and (iv) in the case of a
Second Lien Mortgage Loan, a First Lien on the Mortgaged Property.
"Person" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, trust,
unincorporated association or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by either Borrower or any ERISA Affiliate and that is covered by
Title IV of ERISA, other than a Multiemployer Plan.
"PMI Policy" or "Primary Insurance Policy" means a policy of primary
mortgage guaranty insurance issued by a Qualified Insurer.
"Post-Default Rate" shall mean, in respect of any principal of any
Advance or any other amount under this Loan Agreement, the Note or any other
Loan Document that is not paid when due to the Lender (whether at stated
maturity, by acceleration or mandatory prepayment or otherwise), a rate per
annum during the period from and including the due date to but excluding the
date on which such amount is paid in full equal to 3% per annum, plus (a)(i) the
LIBO Rate plus the Applicable Margin, or (ii) if the LIBO Rate is not
applicable, the interest rate (including the Applicable Margin) otherwise
applicable to such Advance.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Proprietary Lease" shall mean the lease on a Cooperative Unit
evidencing the possessory interest of the owner of the Cooperative Shares in
such Cooperative Unit.
"Qualified Insurer" means an insurance company duly qualified as such
under the laws of the states in which the Mortgaged Property is located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, and approved as an insurer by
Xxxxxx Mae and Xxxxxxx Mac and whose claims paying ability is rated in the two
highest rating
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categories by any of the rating agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance.
"Qualified Originator" shall mean (a) the Borrower and (b) any other
originator of Mortgage Loans as may be approved by the Lender in writing from
time to time.
"Regulations T, U and X" shall mean Regulations T, U and X of the
Board of Governors of the Federal Reserve System (or any successor), as the same
may be modified and supplemented and in effect from time to time.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Required Documents" shall mean those documents identified in Section
2 of the Custodial Agreement.
"Rescission" shall mean the right of a Mortgagor to rescind the
related Mortgage Note and related documents pursuant to applicable law.
"Responsible Officer" shall mean, as to any Person, the chief
executive officer or, with respect to financial matters, the chief financial
officer of such Person; provided, that in the event any such officer is
unavailable at any time he or she is required to take any action hereunder,
Responsible Officer shall mean any officer authorized to act on such officer's
behalf as demonstrated by a certificate of corporate resolution.
"Restricted Payments" shall mean with respect to any Person,
collectively, all dividends or other distributions of any nature (cash,
securities, assets or otherwise), and all payments, by virtue of redemption or
otherwise, on any class of equity securities (including, without limitation,
warrants, options or rights therefor) issued by such Person, whether such
securities are now or may hereafter be authorized or outstanding and any
distribution in respect of any of the foregoing, whether directly or indirectly.
"Second Lien" shall mean with respect to each Mortgaged Property, the
lien of the mortgage, deed of trust or other instrument securing a mortgage note
which creates a second lien on the Mortgaged Property.
"Second Lien Mortgage Loan" shall mean an Eligible Mortgage Loan
secured by the lien on the Mortgaged Property, subject to one prior lien on such
Mortgaged Property securing financing obtained by the related Mortgagor and to
Permitted Exceptions.
"Secured Obligations" shall have the meaning assigned thereto in
Section 4.01(c) hereof.
"Servicer" shall mean the Borrower in its capacity as servicer or
master servicer of the Mortgage Loans.
"Servicing Agreement" shall have the meaning provided in Section
11.15(c) hereof.
"Servicing File" means with respect to each Mortgage Loan, the file
retained by the Borrower consisting of originals of all material documents in
the Mortgage File which are not delivered to the Custodian and copies of the
Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement.
"Servicing Records" shall have the meaning assigned thereto in Section
11.15(b) hereof.
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"Servicing Transmission" shall mean a computer-readable magnetic or
other electronic format acceptable to the parties containing the information
identified on Exhibit F.
"Settlement Agent" shall have the meaning provided in the Custodial
Agreement.
"Subprime Mortgage Loan" shall mean any first or second lien, wet or
dry Mortgage Loans secured by one to four family residential properties to
Mortgagors of "B", "C" or "D" credit quality.
"Subservicer" shall have the meaning provided in Section 11.15(c)
hereof.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Tangible Net Worth" shall mean, with respect to any Person, the Net
Worth of such person determined in accordance with GAAP minus all intangible
assets, including goodwill, patents, tradenames, trademarks, copyrights,
franchises, any organizational expenses, deferred expenses, receivables from
shareholders, Affiliates or employees, and any other asset as shown as an
intangible asset on the balance sheet of such Person on a consolidated basis as
determined at a particular date in accordance with GAAP.
"Termination Date" shall mean February 13, 2006, or such earlier date
on which this Loan Agreement shall terminate in accordance with the provisions
hereof or by operation of law.
"Total Indebtedness" shall mean with respect to any Person, for any
period, the aggregate Indebtedness of such Person and its Subsidiaries during
such period, less the amount of any nonspecific consolidated balance sheet
reserves maintained in accordance with GAAP.
"Tranche A Advances" shall mean Advances so long as, and to the extent
that, they are secured by Dry Loans.
"Tranche B Advances" shall mean Advances so long as, and to the extent
that, they are secured by Wet Loans.
"Trust Receipt" shall have the meaning provided in the Custodial
Agreement.
"Trust Status" shall mean the determination by the Custodian and
confirmed by the Lender whether a Mortgage Loan delivered as a Wet Loan has
become a Dry Loan.
"Underwriting Guidelines" shall mean the underwriting guidelines of
the Borrower attached as Exhibit E hereto as amended from time to time in
accordance with Section 7.09.
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York,
"Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
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"Wet Loan" shall mean a wet-funded first or second lien Mortgage Loan
which is underwritten in accordance with the Underwriting Guidelines and does
not contain all the required Mortgage Loan Documents in the Mortgage File, which
in order to be deemed to an Eligible Mortgage Loan shall have the following
additional characteristics:
(a) the proceeds thereof have been funded (or, on the date of the
Advance supported by a Notice of Borrowing and Pledge are being funded) by
wire transfer or cashier's check, cleared check or draft or other form of
immediately available funds to the Settlement Agent for such Wet Loan;
(b) the Borrower expects such Wet Loan to close and become a valid
lien securing actual indebtedness by funding to the order of the Mortgagor
thereunder;
(c) the proceeds thereof have not been returned to the Lender from the
Settlement Agent for such Wet Loan;
(d) the Borrower has not learned that such Wet Loan will not be closed
and funded to the order of the Mortgagor; and
(e) upon recordation such Mortgage Loan will constitute a first or
second lien on the premises described therein.
1.02 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Lender hereunder shall be
prepared, in accordance with GAAP.
SECTION 2. ADVANCES, NOTE AND PREPAYMENTS.
2.01 Advances.
(a) Subject to fulfillment of the conditions precedent set forth in
Sections 5.01 and 5.02 hereof, and provided that no Default shall have occurred
and be continuing hereunder, the Lender may, in its sole discretion, from time
to time, on the terms and conditions of this Loan Agreement, to make loans
(individually, an "Advance"; collectively, the "Advances") to the Borrower in
Dollars, on any Business Day from and including the Effective Date to but
excluding the Termination Date in an aggregate principal amount at any one time
outstanding up to but not exceeding the lesser of (i) the Maximum Credit (which
shall be further subject to the limitations in the definition of Collateral
Value) and (ii) the Borrowing Base as in effect from time to time. It is
acknowledged and agreed that, notwithstanding any other provision of this Loan
Agreement to the contrary, the facility provided under this Loan Agreement is an
uncommitted facility and the Lender shall have no obligation to make any Advance
hereunder. Any Advance hereunder shall be made in the sole discretion of the
Lender. The Lender may, at any time, terminate this Loan Agreement by providing
written notice to the Borrower. Within thirty (30) calendar days of receipt of
such notice, the Borrower agrees to repay the aggregate outstanding amount of
all Advances including all interest accrued thereon.
(b) Subject to the terms and conditions of this Loan Agreement, during
such period the Borrower may borrow, repay and reborrow hereunder.
(c) In no event shall an Advance be made when any Default or Event of
Default has occurred and is continuing.
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2.02 Notes.
(a) The Advances made by the Lender shall be evidenced by a single
promissory note of the Borrower substantially in the form of Exhibit A hereto
(the "Note"), dated the date hereof, payable to the Lender in a principal amount
equal to the amount of the Maximum Credit as originally in effect and otherwise
duly completed. The Lender shall have the right to have its Note subdivided, by
exchange for promissory notes of lesser denominations or otherwise.
(b) The date, amount and interest rate of each Advance made by the
Lender to the Borrower, and each payment made on account of the principal
thereof, shall be recorded by the Lender on its books and, prior to any transfer
of the Note, noted by the Lender on the grid attached to the Note or any
continuation thereof; provided, that the failure of the Lender to make any such
recordation or notation shall not affect the obligations of the Borrower to make
a payment when due of any amount owing hereunder or under the Note in respect of
the Advances.
2.03 Procedure for Borrowing.
(a) Borrowing Procedure for Requesting an Advance. The Borrower may
request a borrowing to be secured by any Mortgage Loans hereunder, on any
Business Day during the period from and including the Effective Date to the
Termination Date, by delivering to the Lender, with a copy to the Custodian, a
Mortgage Loan Data Transmission and an irrevocable Notice of Borrowing and
Pledge substantially in the form of Exhibit D hereto (a "Notice of Borrowing and
Pledge"), appropriately completed, which Notice of Borrowing and Pledge and
Mortgage Loan Data Transmission must be received by the times and on the days
specified in Section 2(a) of the Custodial Agreement. Such Notice of Borrowing
and Pledge shall clearly indicate those Mortgage Loans that are intended to be
Wet Loans and Dry Loans and include a Mortgage Loan List in respect of the
Eligible Mortgage Loans that the Borrower proposes to pledge to the Lender and
to be included in the Borrowing Base in connection with such borrowing. The
Borrower agrees to immediately report to the Custodian and the Lender by
facsimile transmission within one Business Day of discovery that any Wet Loans
that were previously pledged to the Borrower do not close for any reason
including, but not limited to, a Recission.
(b) Pursuant to the Custodial Agreement, the Custodian shall review
any Required Documents delivered prior to 12:00 p.m. (eastern time) on any
Business Day in time to include the related Mortgage Loans in such Borrowing
Base determination on the same day. Not later than 5:30 p.m. (eastern time) on
each Business Day, the Custodian shall deliver to the Lender, via electronic
transmission acceptable to the Lender, the Custodian Loan Transmission and an
Exception Report showing the status of all Mortgage Loans then held by the
Custodian, including but not limited to the Wet Loans and Dry Loans which are
subject to document exceptions, and the time the related Mortgage Loan Documents
have been released pursuant to Section 5(a) or 5(b) of the Custodial Agreement.
From time to time, the Lender shall calculate the Borrowing Base of all Mortgage
Loans that are held by the Custodian and forward to the Borrower by facsimile
transmission a copy of the Borrowing Base Certificate in the form of Exhibit H.
In addition, the Custodian shall deliver to the Lender no later than 5:30 p.m.
(eastern time) by facsimile transmission on each Funding Date, one or more Trust
Receipts (as defined in the Custodial Agreement) relating to either Wet Loans or
Dry Loans. The original copies of such Trust Receipts shall be delivered to
JPMorgan Chase Bank at Four New York Plaza, Ground Floor, Outsourcing
Department, New York, New York 10004, Attention: Xxxxxxxx Xxxx for the account
of Greenwich Capital Markets (telephone number (000) 000-0000), as agent for the
Lender by overnight delivery using a nationally recognized insured overnight
delivery service.
(c) Upon the Borrower's request for a borrowing pursuant to Section
2.03(a) above, the Lender shall, assuming all conditions precedent set forth in
this Section 2.03 (other than the delivery of the Trust Receipts as provided in
Section 2.03(b)) and in Section 5.01 and 5.02 have been met, and provided no
Default shall have occurred and be continuing (in accordance with Section 2.01),
not later than 9:30 a.m. (eastern time) in the case of AM Funded Wet Loans on
the requested Funding Date or 5:00 p.m. (eastern time) in the case of PM Funded
Wet Loans or Dry Loans on the requested Funding Date
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make an Advance (determined by the Lender) in an amount which would not cause
the aggregate amount of Advances then outstanding to exceed the lesser of (i)
the Maximum Credit or (ii) the Borrowing Base shown on the latest Borrowing Base
Certificate of the Lender. Subject to the foregoing, such borrowing will be made
available to the Borrower by the Lender transferring, via wire transfer
(pursuant to wire transfer instructions provided by the Borrower on or prior to
such Funding Date), in the aggregate amount of such borrowing in funds
immediately available to the Borrower; provided, however, that the Lender may,
at its sole option, elect not to make any Advance hereunder.
2.04 Limitation on Types of Advances; Illegality. Anything herein to
the contrary notwithstanding, if, on or prior to the determination of any LIBO
Base Rate:
(a) the Lender determines, which determination shall be conclusive,
that quotations of interest rates for the relevant deposits referred to in
the definition of "LIBO Base Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for Advances as provided herein;
or
(b) the Lender determines, which determination shall be conclusive,
that the Applicable Margin plus the relevant rate of interest referred to
in the definition of "LIBO Base Rate" in Section 1.01 hereof upon the basis
of which the rate of interest for Advances is to be determined is not
likely adequately to cover the cost to the Lender of making or maintaining
Advances; or
(c) it becomes unlawful for the Lender to make or maintain Advances
hereunder using a LIBO Rate;
then the Lender shall give the Borrower prompt notice thereof and, so long as
such condition remains in effect, the Lender shall not make additional Advances,
and the Borrower shall, at its option, either prepay such Advances or pay
interest on such Advances at a rate per annum as determined by the Lender taking
into account the increased cost to the Lender of making and maintaining the
Advances.
2.05 Repayment of Advances; Interest.
(a) The Borrower shall repay in full on the Termination Date the then
aggregate outstanding principal amount of the Advances (as evidenced by the
Note).
(b) Interest on the Advances shall be payable in arrears monthly on
the Payment Date in respect of the previous calendar month and on the
Termination Date. No later than the Business Day prior to each Payment Date, the
Lender shall provide to the Borrower a report which shall state the interest
amount due for the current interest period on the Advance. The calculation on
such report shall be based upon information provided in the Servicing
Transmission and the report provided pursuant to Section 7.20.
(c) The Borrower shall pay to the Lender interest on the unpaid
principal amount of each Advance for the period from and including the date of
such Advance to but excluding the date such Advance shall be paid in full, at a
rate per annum equal to the LIBO Rate plus the Applicable Margin.
Notwithstanding the foregoing, the Borrower shall pay to the Lender interest at
the applicable Post-Default Rate on any principal of any Advance and on any
other amount payable by the Borrower hereunder or under the Note, that shall not
be paid in full when due (whether at stated maturity, by acceleration or by
mandatory prepayment or otherwise), for the period from and including the due
date thereof to but excluding the date the same is paid in full. Accrued
interest on each Advance as calculated in Section 2.05(b) above shall be payable
monthly on each Payment Date and on the Termination Date, except that interest
payable at the Post-Default Rate shall accrue daily and shall be payable
promptly upon receipt of invoice. Promptly after the determination of any
interest rate provided for herein or any change therein, the Lender shall give
written notice thereof to the Borrower.
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2.06 Mandatory Prepayments or Pledge.
On each Advance Date or other date on which there is a change in the
Mortgage Loans held by the Custodian, the Custodian shall deliver to the Lender
and the Borrower the Custodian Loan Transmission. The Lender shall deliver to
the Borrower a Borrowing Base Certificate in the form attached hereto as Exhibit
H, the calculation in such certificate to be based on the delinquency status and
principal balance of the Eligible Mortgage Loans as of the later of the funding
date balance or the last calendar day of the prior month. Such information shall
be ascertained from the Servicing Transmission which shall be delivered or
caused to be delivered by the Borrower in accordance with Section 7.20 and shall
include all Mortgage Loans which were funded on or prior to the last calendar
day of the previous month.
In the event that such Borrowing Base Certificate indicates or if at
any time the aggregate outstanding principal amount of Advances exceeds the
Borrowing Base (a "Borrowing Base Deficiency"), as determined by the Lender and
notified to the Borrower on any Business Day, the Borrower shall no later than
one Business Day after receipt of such written notice, either prepay the
Advances in part or in whole or pledge additional Eligible Mortgage Loans (which
Collateral shall be in all respects acceptable to the Lender) to the Lender,
such that after giving effect to such prepayment or pledge the aggregate
outstanding principal amount of the Advances does not exceed the Borrowing Base.
2.07 Optional Prepayments.
(a) (a) The Advances are prepayable without premium or penalty, in
whole or in part on each Payment Date. The Advances are prepayable at any other
time, in whole or in part, in accordance herewith and subject to clause (b)
below. Any amounts prepaid shall be applied to repay the outstanding principal
amount of any Advances (together with interest thereon) until paid in full.
Amounts repaid may be reborrowed in accordance with the terms of this Loan
Agreement. If the Borrower intends to prepay an Advance in whole or in part from
any source, the Borrower shall give, with respect to prepayment of an Advance in
an amount greater than or equal to the lesser of $50,000,000 or 25% of the
Advances then outstanding, two (2) Business Days' prior written notice thereof
to the Lender. No prior written notice shall be required with respect to a
prepayment of an Advance in an amount that is both less than $50,000,000 and
less than 25% of the Advances then outstanding. If such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to such date on the amount prepaid.
Partial prepayments shall be in an aggregate principal amount of at least
$100,000.
(b) (b) If the Borrower makes a prepayment of the Advances on any day
which is not a Payment Date, the Borrower shall indemnify the Lender and hold
the Lender harmless from any actual loss or expense which the Lender may sustain
or incur arising from (a) the re-employment of funds obtained by the Lender to
maintain the Advances hereunder or from (b) fees payable to terminate the
deposits from which such funds were obtained, in either case, which actual loss
or expense shall be equal to an amount equal to the excess, as reasonably
determined by the Lender, of (i) its cost of obtaining funds for such Advances
for the period from the date of such payment through the following Payment Date
over (ii) the amount of interest likely to be realized by such Lender in
redeploying the funds not utilized by reason of such payment for such period.
This Section 2.07 shall survive termination of this Loan Agreement and payment
of the Note.
2.08 Requirements of Law.
(a) If any Requirement of Law (other than with respect to any
amendment made to the Lender's certificate of incorporation and by-laws or other
organizational or governing documents) or any change in the interpretation or
application thereof or compliance by the Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
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(i) shall subject the Lender to any tax of any kind whatsoever
with respect to this Loan Agreement, the Note or any Advance made by it
(excluding net income taxes) or change the basis of taxation of payments to
the Lender in respect thereof;
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory advance or similar requirement against assets held by
deposits or other liabilities in or for the account of Advances or other
extensions of credit by, or any other acquisition of funds by any office of
the Lender which is not otherwise included in the determination of the LIBO
Base Rate hereunder;
(iii) shall impose on the Lender any other condition;
and the result of any of the foregoing is to increase the cost to the Lender, by
an amount which the Lender deems to be material, of making, continuing or
maintaining any Advance or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay the Lender such
additional amount or amounts as will compensate the Lender for such increased
cost or reduced amount receivable thereafter incurred.
(b) If the Lender shall have determined that the adoption of or any
change in any Requirement of Law (other than with respect to any amendment made
to the Lender's certificate of incorporation and by-laws or other organizational
or governing documents) regarding capital adequacy or in the interpretation or
application thereof or compliance by the Lender or any corporation controlling
the Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on the
Lender's or such corporation's capital as a consequence of any obligations
hereunder to a level below that which the Lender or such corporation (taking
into consideration the Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by the Lender to be material, then from
time to time, the Borrower shall promptly pay to the Lender such additional
amount or amounts as will thereafter compensate the Lender for such reduction.
(c) If the Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower of the event
by reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this subsection submitted by the Lender to the
Borrower shall be conclusive in the absence of manifest error.
2.09 Purpose of Advances.
Each Advance shall be used to finance the origination or purchase of
Eligible Mortgage Loans identified to the Lender in writing on each Mortgage
Loan Schedule as such Mortgage Loan Schedule may be amended from time to time.
SECTION 3. PAYMENTS; COMPUTATIONS; TAXES.
3.01 Payments.
Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower under this Loan
Agreement and the Note, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Lender at the
following account maintained by the Lender at JPMorgan Chase Bank: Account
Number 140095961, For the A/C of Greenwich Capital Financial Products, Inc.,
ABA# 000000000, Attn: Xxxxxxx Xxxxxx, not later than 1:00 p.m. (eastern time),
on the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day). The Borrower acknowledges that it has no rights of withdrawal
from the foregoing account.
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3.02 Computations. Interest on the Advances shall be computed on the
basis of a 360-day year for the actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
3.03 U.S. Taxes.
(a) The Borrower agrees to pay to the Lender such additional amounts
as are necessary in order that the net payment of any amount due to the Lender
hereunder after deduction for or withholding in respect of any U.S. Tax (as
defined below) imposed with respect to such payment (or in lieu thereof, payment
of such U.S. Tax by the Lender), will not be less than the amount stated herein
to be then due and payable; provided, that the foregoing obligation to pay such
additional amounts shall not apply:
(i) to any payment to the Lender hereunder unless the Lender is
entitled to submit a Form 1001 (relating to the Lender and entitling it to
a complete exemption from withholding on all interest to be received by it
hereunder in respect of the Advances) or Form 4224 (relating to all
interest to be received by the Lender hereunder in respect of the
Advances), or
(ii) to any U.S. Tax imposed solely by reason of the failure by
the Lender to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connections with the United States of America of the
Lender if such compliance is required by statute or regulation of the
United States of America as a precondition to relief or exemption from such
U.S. Tax.
For the purposes of this Section 3.03(a), (w) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a claim
to which such Form relates), and (y) "U.S. Taxes" shall mean any present or
future tax, assessment or other charge or levy imposed by or on behalf of the
United States of America or any taxing authority thereof or therein.
(b) Within 30 days after paying any such amount to the Lender, and
within 30 days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the Borrower shall
deliver to the Lender evidence satisfactory to the Lender of such deduction,
withholding or payment (as the case may be).
(c) The Lender represents and warrants to the Borrower that on the
date hereof the Lender is either incorporated under the laws of the United
States or a State thereof or is entitled to submit a Form 1001 (relating to the
Lender and entitling it to a complete exemption from withholding on all interest
to be received by it hereunder in respect of the Advances) or Form 4224
(relating to all interest to be received by the Lender hereunder in respect of
the Advances).
SECTION 4. COLLATERAL SECURITY.
4.01 Collateral; Security Interest.
(a) Pursuant to the Custodial Agreement, the Custodian shall hold the
Mortgage Loan Documents as exclusive bailee and agent for the Lender pursuant to
the terms of the Custodial Agreement and shall deliver to the Lender Trust
Receipts with Exception Reports (as such terms are defined in the Custodial
Agreement) to the effect that it has reviewed such Mortgage Loan Documents in
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the manner required by the Custodial Agreement and identifying any deficiencies
in such Mortgage Loan Documents as so reviewed.
(b) Each of the following items or types of property, whether now
owned or hereafter acquired, now existing or hereafter created and wherever
located, is hereinafter referred to as the "Collateral":
(i) all Mortgage Loans identified on a Notice of Borrowing and
Pledge delivered by the applicable Borrower to the Lender and the Custodian
from time to time;
(ii) all Mortgage Loan Documents, including without limitation
all promissory notes, and all Servicing Records (as defined in Section
11.15(b) below), and any other collateral pledged or otherwise relating to
such Mortgage Loans, together with all files, material documents,
instruments, surveys (if available), certificates, correspondence,
appraisals, computer records, computer storage media, Mortgage Loan
accounting records and other books and records relating thereto;
(iii) all mortgage guaranties and insurance (issued by
governmental agencies or otherwise) and any mortgage insurance certificate
or other document evidencing such mortgage guaranties or insurance relating
to any Mortgage Loans and all claims and payments thereunder;
(iv) all other insurance policies and insurance proceeds relating
to any Mortgage Loans or the related Mortgaged Property;
(v) all Interest Rate Protection Agreements relating to any or
all of the foregoing;
(vi) any purchase agreements or other agreements or contracts
relating to or constituting any or all of the foregoing;
(vii) all purchase or take-out commitments relating to or
constituting any or all of the foregoing;
(viii) all "accounts", "chattel paper", "commercial tort claims",
"deposit accounts", "documents," "equivalent", "general intangibles",
"goods", "instruments", "inventory", "investment property", "letter of
credit rights", and "securities' accounts" as each of those terms is
defined in the Uniform Commercial Code and related to any Mortgage Loan or
related Mortgaged Property, and all cash and Cash Equivalents and all
products and proceeds relating to or constituting any or all of the
foregoing;
(ix) all interests in real property owned by the Borrower or
collateralizing any Mortgage Loans; and
(x) any and all replacements, substitutions, distributions on or
proceeds of any or all of the foregoing.
(c) Each Borrower hereby assigns, pledges and grants a security
interest to the Lender in all of its right, title and interest in, to and under
all the Collateral, whether now owned or hereafter acquired, now existing or
hereafter created and wherever located, to secure the repayment of principal of
and interest on all Advances and all other amounts owing to the Lender
hereunder, under the Note and under the other Loan Documents (collectively, the
"Secured Obligations"). Each Borrower agrees to xxxx its computer records and
tapes to evidence the security interests granted to the Lender hereunder.
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4.02 Further Documentation. At any time and from time to time, upon
the written request of the Lender, and at the sole expense of the Borrower, the
Borrower will promptly and duly execute and deliver, or will promptly cause to
be executed and delivered, such further instruments and documents and take such
further action as the Lender may reasonably request for the purpose of obtaining
or preserving the full benefits of this Loan Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Liens created hereby. The Borrower also
hereby authorizes the Lender to file any such financing or continuation
statement without the signature of the Borrower to the extent permitted by
applicable law. A carbon, photographic or other reproduction of this Loan
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
4.03 Changes in Locations, Name, etc. The Borrower shall not (i)
change the location of its chief executive office/chief place of business from
that specified in Section 6 hereof, (ii) change its name, identity or corporate
structure (or the equivalent) or change the location where it maintains its
records with respect to the Collateral, or (iii) reincorporate or reorganize
under the laws of another jurisdiction unless it shall have given the Lender at
least 30 days prior written notice thereof and shall have delivered to the
Lender all Uniform Commercial Code financing statements and amendments thereto
as the Lender shall request and taken all other actions deemed reasonably
necessary by the Lender to continue its perfected status in the Collateral with
the same or better priority.
4.04 Lender's Appointment as Attorney-in-Fact.
(a) The Borrower hereby irrevocably constitutes and appoints the
Lender and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of the Borrower and in the name of the Borrower or in its
own name, from time to time in the Lender's discretion, for the purpose of
carrying out the terms of this Loan Agreement, including without limitation,
protecting, preserving and realizing upon the Collateral, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Loan Agreement,
including without limitation, to protect, preserve and realize upon the
Collateral, and, without limiting the generality of the foregoing, the Borrower
hereby gives the Lender the power and right, on behalf of the Borrower, without
assent by, but with notice to, the Borrower, if an Event of Default shall have
occurred and be continuing, to do the following:
(i) in the name of the Borrower or its own name, or otherwise, to
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
mortgage insurance or with respect to any other Collateral and to file any
claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Lender for the purpose of
collecting any and all such moneys due under any such mortgage insurance or
with respect to any other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral; and
(iii) (A) to direct any party liable for any payment under any
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Lender or as the Lender shall direct; (B) to ask
or demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (C) to sign and endorse any
invoices, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce
any other right in respect of
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any Collateral; (E) to defend any suit, action or proceeding brought
against the Borrower with respect to any Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding described in clause (E)
above and, in connection therewith, to give such discharges or releases as
the Lender may deem appropriate; and (G) generally, to sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though the Lender were the
absolute owner thereof for all purposes, and to do, at the Lender's option
and the Borrower's expense, at any time, or from time to time, all acts and
things which the Lender deems necessary to protect, preserve or realize
upon the Collateral and the Lender's Liens thereon and to effect the intent
of this Loan Agreement, all as fully and effectively as the Borrower might
do.
The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) The Borrower also authorizes the Lender, at any time and from time
to time, to execute, in connection with the sale provided for in Section 4.07
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(c) The powers conferred on the Lender are solely to protect the
Lender's interests in the Collateral and shall not impose any duty upon the
Lender to exercise any such powers. The Lender shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers,
and neither the Lender nor any of its officers, directors, or employees shall be
responsible to the Borrower for any act or failure to act hereunder, except for
its own gross negligence or willful misconduct.
4.05 Performance by Lender of Borrower's Obligations. If the Borrower
fails to perform or comply with any of its material agreements contained in the
Loan Documents and the Lender may itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the reasonable out-of-pocket
expenses of the Lender incurred in connection with such performance or
compliance, together with interest thereon at a rate per annum equal to the
Post-Default Rate, shall be payable by the Borrower to the Lender on demand and
shall constitute Secured Obligations.
4.06 Proceeds. If an Event of Default shall occur and be continuing,
(a) all proceeds of Collateral received by the Borrower consisting of cash,
checks and other near-cash items shall be held by the Borrower in trust for the
Lender, segregated from other funds of the Borrower, and shall forthwith upon
receipt by the Borrower be turned over to the Lender in the exact form received
by the Borrower (duly endorsed by the Borrower to the Lender, if required) and
(b) any and all such proceeds received by the Lender will be applied by the
Lender against, the Secured Obligations (whether matured or unmatured), such
application to be in such order as the Lender shall elect. Any balance of such
proceeds remaining after the Secured Obligations shall have been paid in full
and this Loan Agreement shall have been terminated shall be promptly paid over
to the Borrower or to whomsoever may be lawfully entitled to receive the same.
For purposes hereof, proceeds shall include, but not be limited to, all
principal and interest payments, all prepayments and payoffs, insurance claims,
condemnation awards, sale proceeds, real estate owned rents and any other income
and all other amounts received with respect to the Collateral.
4.07 Remedies. If a Default shall occur and be continuing, the Lender
may, at its option, enter into one or more Interest Rate Protection Agreements
covering all or a portion of the Mortgage Loans pledged to the Lender hereunder,
and the Borrower shall be responsible for all damages, judgments, costs and
expenses of any kind which may be imposed on, incurred by or asserted against
the Lender relating to or arising out of such Interest Rate Protection
Agreements; including without limitation any losses resulting from such Interest
Rate Protection Agreements. If an Event of Default shall occur and be
continuing, the Lender may exercise, in addition to all other rights and
remedies granted to it in this Loan Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all
rights and remedies of a secured party under the Uniform Commercial Code, at law
and in equity. Without limiting the generality of the foregoing, the Lender
without demand of
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performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Borrower or any other Person (all and each of which demands, defenses,
presentments, protests, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels or as an entirety at public or private sale or sales, at any
exchange, broker's board or office of the Lender or elsewhere upon such terms
and conditions and at prices that are consistent with the prevailing market for
similar collateral as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Lender shall act in good faith to obtain the best execution
possible under prevailing market conditions. The Lender shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Borrower,
which right or equity is hereby waived or released. The Borrower further agrees,
at the Lender's request, to assemble the Collateral and make it available to the
Lender at places which the Lender shall reasonably select, whether at the
Borrower's premises or elsewhere. The Lender shall apply the net proceeds of any
such collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Lender hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Secured Obligations, in such order as the Lender may
elect, and only after such application and after the payment by the Lender of
any other amount required or permitted by any provision of law, including,
without limitation, Section 9-504(1)(c) of the Uniform Commercial Code, need the
Lender account for the surplus, if any, to the Borrower. To the extent permitted
by applicable law, the Borrower waives all claims, damages and demands it may
acquire against the Lender arising out of the exercise by the Lender of any of
its rights hereunder, other than those claims, damages and demands arising from
the gross negligence or willful misconduct of the Lender. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition. The Borrower shall remain liable for any
deficiency (plus accrued interest thereon as contemplated pursuant to Section
2.05(b) hereof) if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Obligations and the reasonable
fees and disbursements incurred by the Lender, including reasonable fees and
expenses of any attorneys employed by the Lender to collect such deficiency.
Because the Borrower recognizes that it may not be possible to purchase or sell
all of the Collateral on a particular Business Day, or in a transaction with the
same purchaser, or in the same manner because the market for such Collateral may
not be liquid, the Borrower agrees that liquidation of the Collateral 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, the Lender may elect, in its sole discretion, the time and manner
of liquidating any Collateral and nothing contained herein shall (A) obligate
the Lender to liquidate any Collateral on the occurrence of an Event of Default
or to liquidate all Collateral in the same manner or on the same Business Day or
(B) constitute a waiver of any of the Lender's rights or remedies.
4.08 Limitation on Duties Regarding Presentation of Collateral. The
Lender's duty with respect to the custody, safekeeping and physical preservation
of the Collateral in its possession, under Section 9-207 of the Uniform
Commercial Code or otherwise, shall be to deal with it in the same manner as the
Lender deals with similar property for its own account. Neither the Lender nor
any of its directors, officers or employees shall be liable for failure to
demand, collect or realize upon all or any part of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Borrower or otherwise.
4.09 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
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4.10 Release of Security Interest. Upon termination of this Loan
Agreement and repayment to the Lender of all Secured Obligations and the
performance of all obligations under the Loan Documents the Lender shall release
its security interest in any remaining Collateral; provided that if any payment,
or any part thereof, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or a
trustee or similar officer for the Borrower or any substantial part of its
Property, or otherwise, this Loan Agreement, all rights hereunder and the Liens
created hereby shall continue to be effective, or be reinstated, until such
payments have been made.
SECTION 5. CONDITIONS PRECEDENT.
5.01 Initial Advance. The obligation of the Lender to make its initial
Advance hereunder is subject to the satisfaction, immediately prior to or
concurrently with the making of such Advance, of the following conditions
precedent:
(a) Loan Agreement. The Lender shall have received this Loan
Agreement, executed and delivered by a duly authorized officer of the Borrower.
(b) Loan Documents. The Lender shall have received the following
documents, each of which shall be satisfactory to the Lender in form and
substance:
(i) Note. The Note, duly completed and executed; and
(ii) Custodial Agreement. The Custodial Agreement, duly executed
and delivered by the Borrower and the Custodian. In addition, the Borrower
shall have filed all Uniform Commercial Code and related filings and
performed under the Custodial Agreement and taken such other action as the
Lender shall have requested in order to perfect the security interests
created pursuant to the Loan Agreement.
(c) Organizational Documents. A good standing certificate and
certified copies of the charter and by-laws (or equivalent documents) of the
Borrower and of all corporate or other authority for the Borrower with respect
to the execution, delivery and performance of the Loan Documents and each other
document to be delivered by the Borrower from time to time in connection
herewith (and the Lender may conclusively rely on such certificate until it
receives notice in writing from the Borrower to the contrary).
(d) Legal Opinions. Legal opinions of counsel to the Borrower,
substantially in the form attached hereto as Exhibit C.
(e) Reserved.
(f) Filings, Registrations, Recordings. (i) Any documents (including,
without limitation, financing statements) required to be filed, registered or
recorded in order to create, in favor of the Lender, a perfected, first-priority
security interest in the Collateral, subject to no Liens other than those
created hereunder, shall have been properly prepared and executed for filing,
registration or recording in each office in each jurisdiction in which such
filings, registrations and recordations are required to perfect such
first-priority security interest; and (ii) UCC lien searches in such
jurisdictions as shall be applicable to the Borrower and the Collateral, the
results of which shall be satisfactory to the Lender.
(g) Fees and Expenses. The Lender shall have received all fees and
expenses required to be paid by the Borrower on or prior to the initial Funding
Date, which fees and expenses may be netted out of any Advance made by the
Lender hereunder.
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(h) Financial Statements. The Lender shall have received the financial
statements referenced in Section 7.01(a).
(i) Underwriting Guidelines. The Lender and the Borrower shall have
agreed upon the Borrower's current Underwriting Guidelines for Mortgage Loans
and the Lender shall have received a copy thereof.
(j) Consents, Licenses, Approvals, etc. The Lender shall have received
copies certified by the Borrower of all consents, licenses and approvals, if
any, required in connection with the execution, delivery and performance by the
Borrower of, and the validity and enforceability of, the Loan Documents, which
consents, licenses and approvals shall be in full force and effect.
(k) Insurance. The Lender shall have received evidence in form and
substance satisfactory to the Lender showing compliance by the Borrower as of
such initial Funding Date with Section 7.22 hereof.
(l) Instruction Letter. The Lender shall have received an Instruction
Letter in the form attached hereto as Exhibit J executed by the Borrower.
(m) Electronic Tracking Agreement. The Lender and the Borrower shall
have entered into an Electronic Tracking Agreement with MERS in a form
acceptable to the Lender.
(n) Other Documents. The Lender shall have received such other
documents as the Lender or its counsel may reasonably request.
5.02 Initial and Subsequent Advances. The making of each Advance to
the Borrower (including the initial Advance) on any Business Day is subject to
the following further conditions precedent, both immediately prior to the making
of such Advance and also after giving effect thereto and to the intended use
thereof:
(a) no Default or Event of Default shall have occurred and be
continuing;
(b) both immediately prior to the making of such Advance and also
after giving effect thereto and to the intended use thereof, the
representations and warranties made by the Borrower in Section 6 hereof,
and in each of the other Loan Documents, shall be true and complete on and
as of the date of the making of such Advance in all material respects (in
the case of the representations and warranties in Section 6.23 and Schedule
1, solely with respect to Mortgage Loans included in the Borrowing Base)
with the same force and effect as if made on and as of such date (or, if
any such representation or warranty is expressly stated to have been made
as of a specific date, as of such specific date). At the request of the
Lender, the Lender shall have received an officer's certificate signed by a
Responsible Officer of the Borrower certifying as to the truth and accuracy
of the above, which certificate shall specifically include a statement that
the Borrower is in compliance with all governmental licenses and
authorizations and is qualified to do business and in good standing in all
required jurisdictions;
(c) the aggregate outstanding principal amount of the Advances shall
not exceed the Borrowing Base or the Maximum Credit;
(d) subject to the Lender's right to perform one or more Due Diligence
Reviews pursuant to Section 11.16 hereof, the Lender shall have completed
its due diligence review of the Mortgage Loan Documents for each Advance
and such other documents, records, agreements, instruments, mortgaged
properties or information relating to such Advances as the Lender in its
reasonable discretion deems appropriate to review and such review shall be
satisfactory to the Lender in its reasonable discretion;
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(e) the Lender shall have received a Notice of Borrowing and Pledge,
Mortgage Loan List and Mortgage Loan Data Transmission and all other
documents required under Section 2.03;
(f) the Lender shall have received from the Custodian a Custodian Loan
Transmission and one or more Trust Receipts in respect of Mortgage Loans to
be pledged hereunder on such Business Day and an Exception Report, in each
case dated such Business Day and duly completed;
(g) in the event that the Mortgage Loans to be pledged would cause the
aggregate outstanding principal balance of Mortgage Loans pledged secured
by Mortgaged Property from any state to exceed 10% of the aggregate
outstanding principal balance of Mortgage Loans pledged hereunder, then the
Borrower shall, upon request by the Lender, deliver an opinion of counsel
acceptable to the Lender in such state, substantially in the form of items
number 12 and 13 of Exhibit C;
(h) with respect to any Mortgage Loan that was funded in the name of
or acquired by a Qualified Originator which is an Affiliate of the
Borrower, the Lender may, in its sole discretion, require the Borrower to
provide evidence sufficient to satisfy the Lender that such Mortgage Loan
was acquired in a legal sale, including without limitation, an opinion, in
form and substance and from an attorney, in both cases, acceptable to the
Lender in its sole discretion, that such Mortgage Loan was acquired in a
legal sale;
(i) none of the following shall have occurred and/or be continuing:
(i) an event or events resulting in the inability of the Lender
to finance any Advances with traditional counterparties at rates which
would have been reasonable prior to the occurrence of such
catastrophic event or events or a material adverse change in the
financial condition of the Lender which affects (or can reasonably be
expected to affect) materially and adversely the ability of the Lender
to fund any obligations under or otherwise comply with the terms of
this Loan Agreement; or
(ii) any other event beyond the control of the Lender which the
Lender reasonably determines may result in the Lender's inability to
perform any obligations under this Loan Agreement including, without
limitation, acts of God, strikes, lockouts, riots, acts of war or
terrorism, epidemics, nationalization, expropriation, currency
restrictions, fire, communication line failures, computer viruses,
power failures, earthquakes, or other disasters of a similar nature to
the foregoing.
(j) if any Mortgage Loans to be pledged hereunder were acquired by the
Borrower, such Mortgage Loans shall conform to the Borrower's Underwriting
Guidelines or the Lender shall have received Underwriting Guidelines for
such Mortgage Loans acceptable to the Lender in its reasonable discretion;
(k) the Lender shall have received all information requested from the
Borrower relating to Interest Rate Protection Agreements pursuant to
Section 7.25, and the Lender shall have reasonably determined that such
Interest Rate Protection Agreements adequately protect the Borrower from
interest rate fluctuations; and
(l) the Lender shall have received, no later than 10:00 a.m. three (3)
days prior to the requested Funding Date, an Instruction Letter, executed
by the Borrower, with the related Servicing Agreement attached thereto,
which such Servicing Agreement shall be in form and substance acceptable to
Lender.
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Each request for a borrowing by the Borrower hereunder shall constitute a
certification by the Borrower to the effect set forth in this Section (both as
of the date of such notice, request or confirmation and as of the date of such
borrowing).
SECTION 6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Lender that throughout the term of this Loan Agreement:
6.01 Existence. The Borrower (a) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite corporate or other power, and has all
governmental licenses, authorizations, consents and approvals, necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, except where the lack of such licenses, authorizations, consents and
approvals would not be reasonably likely to have a Material Adverse Effect, (c)
is qualified to do business and is in good standing in all other jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary, except where failure so to qualify would not be reasonably likely
(either individually or in the aggregate) to have a Material Adverse Effect, and
(d) is in compliance in all material respects with all Requirements of Law.
6.02 Financial Condition. The Borrowers have heretofore furnished to
the Lender a copy of their audited consolidated balance sheets and the audited
consolidated balance sheets of their consolidated Subsidiaries, each as at
December 31, 2003 with the opinion thereon of BDO Xxxxxxx LLP, a copy of which
has been provided to Lender. The Borrowers have also heretofore furnished to the
Lender the related consolidated statements of income and retained earnings and
of cash flows for the Borrowers and their consolidated Subsidiaries for the one
year period ending December 31, 2003, setting forth comparative form the figures
for the previous year. All such financial statements are materially complete and
correct and fairly present the consolidated financial condition of the Borrowers
and their respective Subsidiaries and the consolidated results of their
operations for the fiscal year ended on said date, all in accordance with GAAP
applied on a consistent basis. Since December 31, 2003 there has been no
development or event nor any prospective development or event which has had or
should reasonably be expected to have a Material Adverse Effect.
6.03 Litigation. There are no actions, suits, arbitrations,
investigations or proceedings pending or, to its knowledge, threatened against
the Borrower or any of its Subsidiaries or affecting any of the property thereof
before any Governmental Authority, (i) as to which individually or in the
aggregate there is a reasonable likelihood of an adverse decision which would be
reasonably likely to have a Material Adverse Effect or (ii) which questions the
validity or enforceability of any of the Loan Documents or any action to be
taken in connection with the transactions contemplated hereby and there is a
reasonable likelihood of a Material Adverse Effect or adverse decision.
6.04 No Breach. Neither (a) the execution and delivery of the Loan
Documents or (b) the consummation of the transactions therein contemplated in
compliance with the terms and provisions thereof will conflict with or result in
a breach of the charter or by-laws of the Borrower, or any applicable law, rule
or regulation, or any order, writ, injunction or decree of any Governmental
Authority, or other material agreement or instrument to which the Borrower, or
any of its Subsidiaries, is a party or by which any of them or any of their
property is bound or to which any of them is subject, or constitute a default
under any such material agreement or instrument, or (except for the Liens
created pursuant to this Loan Agreement) result in the creation or imposition of
any Lien upon any property of the Borrower or any of its Subsidiaries, pursuant
to the terms of any such agreement or instrument.
6.05 Action. The Borrower has all necessary corporate or other power,
authority and legal right to execute, deliver and perform its obligations under
each of the Loan Documents to which it is a party; the execution, delivery and
performance by the Borrower of each of the Loan Documents to which it is a party
has been duly authorized by all necessary corporate or other action on its part;
and each Loan Document has been duly and validly executed and delivered by the
Borrower and constitutes a
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legal, valid and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms.
6.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority, or any other Person,
are necessary for the execution, delivery or performance by the Borrower of the
Loan Documents to which it is a party or for the legality, validity or
enforceability thereof, except for filings and recordings in respect of the
Liens created pursuant to this Loan Agreement.
6.07 Margin Regulations. Neither the making of any Advance hereunder,
nor the use of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulation G, T, U or X.
6.08 Taxes. The Borrower and its Subsidiaries have filed all Federal
income tax returns and all other material tax returns that are required to be
filed by them and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by any of them, except for any such taxes, if any,
that are being appropriately contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes and other governmental charges are, in the
opinion of the Borrower, adequate.
6.09 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to any Federal or state statute or
regulation which limits its ability to incur indebtedness.
6.10 No Legal Bar. The execution, delivery and performance of this
Loan Agreement and the Note, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of the Borrower or of any of its Subsidiaries and will not result in,
or require, the creation or imposition of any Lien (other than the Liens created
hereunder) on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation.
6.11 No Default. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which should reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
6.12 Collateral; Collateral Security.
(a) The Borrower has not assigned, pledged, or otherwise conveyed or
encumbered any Mortgage Loan to any other Person, and immediately prior to the
pledge of any such Mortgage Loan to the Lender, the Borrower was the sole owner
of such Mortgage Loan and had good and marketable title thereto, free and clear
of all Liens, in each case except for Liens to be released simultaneously with
the Liens granted in favor of the Lender hereunder and no Person other than the
Borrower has any Lien on any Mortgage Loan.
(b) The provisions of this Loan Agreement are effective to create in
favor of the Lender a valid security interest in all right, title and interest
of the Borrower in, to and under the Collateral.
(c) Upon receipt by the Custodian of each Mortgage Note, endorsed in
blank by a duly authorized officer of the payee or last endorsee, the Lender
shall have a fully perfected first priority security interest therein, in the
Mortgage Loan evidenced thereby and in the Borrower's interest in the related
Mortgaged Property.
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(d) Upon the filing of financing statements on Form UCC-1 naming the
Lender as "Secured Party" and the Borrower as "Debtor", and describing the
Collateral, in the jurisdictions and recording offices listed on Schedule 2
attached hereto, the security interests granted hereunder in the Collateral will
constitute fully perfected first priority security interests under the Uniform
Commercial Code in all right, title and interest of the Borrower in, to and
under such Collateral, which can be perfected by filing under the Uniform
Commercial Code.
6.13 Chief Executive Office; Chief Operating Office. The Borrower's
chief executive office on the Effective Date is located at 00 Xxxxxx Xxxx, Xxx
Xxxx, Xxx Xxxx, 00000 and the chief operating office is located at 00 Xxxxxx
Xxxx, Xxx Xxxx, Xxx Xxxx, 00000.
6.14 Location of Books and Records. The location where the Borrower
keeps its books and records including all computer tapes and records relating to
the Collateral is its chief executive office or chief operating office or the
offices of the Custodian.
6.15 True and Complete Disclosure. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Borrower to the Lender in connection with the negotiation, preparation or
delivery of this Loan Agreement and the other Loan Documents or included herein
or therein or delivered pursuant hereto or thereto, when taken as a whole, do
not contain any untrue statement of material fact or omit to state any material
fact necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. All written
information furnished after the date hereof by or on behalf of the Borrower to
the Lender in connection with this Loan Agreement and the other Loan Documents
and the transactions contemplated hereby and thereby will be true, complete and
accurate in every material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is stated or
certified. There is no fact known to a Responsible Officer that, after due
inquiry, could reasonably be expected to have a Material Adverse Effect that has
not been disclosed herein, in the other Loan Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Lender for use in connection with the transactions contemplated hereby or
thereby.
6.16 Tangible Net Worth; Liquidity. The Borrowers' Tangible Net Worth
(on a consolidated basis) is not less than $175,000,000 and, at December 31,
2004, the Borrowers' cash and Cash Equivalents (on a consolidated basis) were in
an amount not less than $20,000,000. The ratio of the Borrowers' Indebtedness to
Tangible Net Worth (on a consolidated basis) is not greater than 25:1. The ratio
of Borrowers' Adjusted Indebtedness to Tangible Net Worth (on a consolidated
basis) is not greater than 15:1.
6.17 ERISA. Each Plan to which the Borrower or its Subsidiaries make
direct contributions, and, to the knowledge of the Borrower, each other Plan and
each Multiemployer Plan, is in compliance with, and has been administered in
compliance with, the applicable provisions of ERISA, the Code and any other
Federal or State law, except where, in each case, the failure to comply would
not result in any Material Adverse Effect. No event or condition has occurred
and is continuing as to which the Borrower would be under an obligation to
furnish a report to the Lender under Section 7.01(d) hereof.
6.18 Licenses. The Lender will not be required as a result of
financing or taking a pledge of the Mortgage Loans to be licensed, registered or
approved or to obtain permits or otherwise qualify (i) to do business in any
state in which it currently so required or (ii) under any state consumer
lending, fair debt collection or other applicable state statute or regulation.
6.19 Relevant States. Schedule 3 sets forth all of the states or other
jurisdictions (the "Relevant States") in which the Borrower originates Mortgage
Loans in its own name or through brokers on the date of this Loan Agreement.
6.20 True Sales. Any and all interest of a Qualified Originator in, to
and under any Mortgage funded in the name of or acquired by such Qualified
Originator or seller which is an Affiliate of
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the Borrower has been sold, transferred, conveyed and assigned to the Borrower
pursuant to a legal sale and such Qualified Originator retains no interest in
such Mortgage Loan, and if so requested by the Lender, is covered by an opinion
of counsel to that effect in form and substance acceptable to the Lender.
6.21 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries has a Material Adverse
Effect.
6.22 Subsidiaries. All of the Subsidiaries of the Borrower at the date
hereof are listed on Schedule 4 to this Loan Agreement.
6.23 Origination and Acquisition of Mortgage Loans. The Mortgage Loans
were originated or acquired by the Borrower, and the origination and collection
practices used by the Borrower or Qualified Originator, as applicable, with
respect to the Mortgage Loans have been, in all material respects legal, proper,
prudent and customary in the residential mortgage loan servicing business, and
in accordance with the Underwriting Guidelines. With respect to Mortgage Loans
acquired by the Borrower, all such Mortgage Loans are in conformity with the
Underwriting Guidelines. Each of the Mortgage Loans complies with the
representations and warranties listed in Schedule I hereto.
6.24 No Adverse Selection. The Borrower used no selection procedures
that identified the Mortgage Loans as being less desirable or valuable than
other comparable Mortgage Loans owned by the Borrower.
6.25 Borrower Solvent; Fraudulent Conveyance. As of the date hereof
and immediately after giving effect to each Advance, the fair value of the
assets of the Borrower is greater than the fair value of the liabilities
(including, without limitation, contingent liabilities if and to the extent
required to be recorded as a liability on the financial statements of the
Borrower in accordance with GAAP) of the Borrower and the Borrower is and will
be solvent, is and will be able to pay its debts as they mature and does not and
will not have an unreasonably small capital to engage in the business in which
it is engaged and proposes to engage. Borrower does not intend to incur, or
believe that it has incurred, debts beyond its ability to pay such debts as they
mature. Borrower is not contemplating the commencement of insolvency,
bankruptcy, liquidation or consolidation proceedings or the appointment of a
receiver, liquidator, conservator, trustee or similar official in respect of
Borrower or any of its assets. Borrower is not transferring any Mortgage Loans
with any intent to hinder, delay or defraud any of its creditors.
6.26 Insured Closing Letter. As of the date hereof and as of the date
of each delivery of a Wet Loan, the Settlement Agent has obtained an Insured
Closing Letter, closing protection letter or similar authorization letter from a
nationally recognized title insurance company approved by the Lender, copies of
which shall, upon the request of the Lender, be delivered by the Borrower to the
Custodian prior to the Funding Date.
6.27 Escrow Agreement. As of the date hereof and as of the date of
each delivery of a Wet Loan, the Settlement Agent has executed an escrow
agreement or letter stating that in the event of a Rescission of any other
reason the Mortgage Loan fails to fund on a given day, the party conducting the
closing is holding all funds which would have been disbursed on behalf of the
Mortgagor as agent for an for the benefit of the Lender and such funds shall be
redeposited in the Disbursement Account for benefit of the Lender not later than
one Business Day after the date of Rescission or other failure of the Mortgage
Loan to fund on a given day.
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SECTION 7. COVENANTS OF THE BORROWER. The Borrower covenants and
agrees with the Lender that, so long as any Advance is outstanding and until
payment in full of all Secured Obligations:
7.01 Financial Statements. The Borrower shall deliver to the Lender:
(a) (i) as soon as available and in any event within 30 days after the
end of each month, the unaudited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such month
and the related unaudited consolidated statements of income and
retained earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such month and the portion of the fiscal
year through the end of such month, setting forth in each case in
comparative form the figures for the previous year, accompanied by a
certificate of a Responsible Officer of the Borrower, which
certificate shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries in accordance with
GAAP, consistently applied, as at the end of, and for, such month
(subject to normal year-end audit adjustments);
(ii) as soon as available and in any event within 60 days after
the end of each of the first three quarterly fiscal periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheets
of the Borrower and its consolidated Subsidiaries as at the end of
such period and the related unaudited consolidated statements of
income and retained earnings and of cash flows for the Borrower and
its consolidated Subsidiaries for such period and the portion of the
fiscal year through the end of such period, setting forth in each case
in comparative form the figures for the previous year, accompanied by
a certificate of a Responsible Officer of the Borrower, which
certificate shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries in accordance with
GAAP, consistently applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 120 days after the
end of each fiscal year of the Borrower, the consolidated balance
sheets of the Borrower and its consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such year, setting forth in each case in
comparative form the figures for the previous year, accompanied by an
opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall not be qualified as
to scope of audit or going concern and shall state that said
consolidated financial statements fairly present the consolidated
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries at the end of, and for, such fiscal year in
accordance with GAAP;
(c) from time to time such other information regarding the financial
condition, operations, or business of the Borrower as the Lender may
reasonably request; and
(d) as soon as reasonably possible, and in any event within thirty
(30) days after a Responsible Officer knows, or with respect to any
Plan or Multiemployer Plan to which the Borrower or any of its
Subsidiaries makes direct contributions, has reason to believe, that
any of the events or conditions specified below with respect to any
Plan or Multiemployer Plan has occurred or exists, a statement signed
by a senior financial officer of the Borrower setting forth details
respecting such event or condition and the action, if any, that the
Borrower or its ERISA Affiliate proposes to take with respect
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thereto (and a copy of any report or notice required to be filed with
or given to PBGC by the Borrower or an ERISA Affiliate with respect to
such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder, with respect to a Plan, as
to which PBGC has not by regulation or otherwise waived the
requirement of Section 4043(a) of ERISA that it be notified
within thirty (30) days of the occurrence of such event (provided
that a failure to meet the minimum funding standard of Section
412 of the Code or Section 302 of ERISA, including, without
limitation, the failure to make on or before its due date a
required installment under Section 412(m) of the Code or Section
302(e) of ERISA, shall be a reportable event regardless of the
issuance of any waivers in accordance with Section 412(d) of the
Code); and any request for a waiver under Section 412(d) of the
Code for any Plan;
(ii) the distribution under Section 4041(c) of ERISA of a notice
of intent to terminate any Plan or any action taken by the
Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee
to administer, any Plan, or the receipt by the Borrower or any
ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal from a Multiemployer Plan
by the Borrower or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default)
or the receipt by the Borrower or any ERISA Affiliate of notice
from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it
intends to terminate or has terminated under Section 4041A of
ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days; and
(vi) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which
such Plan is a part if the Borrower or an ERISA Affiliate fails
to timely provide security to such Plan in accordance with the
provisions of said Sections.
The Borrower will furnish to the Lender, at the time it furnishes each set of
financial statements pursuant to paragraphs (a) and (b) above, a certificate of
a Responsible Officer of the Borrower to the effect that, to the best of such
Responsible Officer's knowledge, the Borrower during such fiscal period or year
has observed or performed all of its covenants and other agreements, and
satisfied every material condition, contained in this Loan Agreement and the
other Loan Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate (and, if any Default or Event of Default
has occurred and is continuing, describing the same in reasonable detail and
describing the action the Borrower has taken or proposes to take with respect
thereto).
7.02 Litigation. The Borrower will promptly, and in any event within
seven (7) calendar days after service of process on any of the following, give
to the Lender notice of all legal or arbitrable proceedings affecting the
Borrower or any of its Subsidiaries (a) that questions or challenges
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the validity or enforceability of any of the Loan Documents, or (b) in which the
amount in controversy exceeds $1,000,000 and as to which there is a reasonable
likelihood of adverse determination which would result in a Material Adverse
Effect.
7.03 Existence, Etc. Each of the Borrower and its Subsidiaries will:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises necessary for the operation of
its business;
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including, without
limitation, truth in lending, real estate settlement procedures and all
environmental laws) if failure to comply with such requirements would be
reasonably likely (either individually or in the aggregate) to have a
Material Adverse Effect;
(c) keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied;
(d) not move its chief executive office or chief operating office from
the addresses referred to in Section 6.13 unless it shall have provided the
Lender 30 days prior written notice of such change;
(e) pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for
any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which
adequate reserves are being maintained; and
(f) permit representatives of the Lender, during normal business hours
upon three (3) Business Days' prior written notice at a mutually desirable
time or at any time during the continuance of an Event of Default, to
examine, copy and make extracts from its books and records, to inspect any
of its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by the Lender.
7.04 Prohibition of Fundamental Changes. The Borrower shall not enter
into any transaction of merger or consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation, winding up or
dissolution) or sell all or substantially all of its assets; provided, that the
Borrower may merge or consolidate with (a) any Subsidiary of the Borrower, or
(b) any other Person if the Borrower is the surviving corporation; and provided
further, that if after giving effect thereto, no Default would exist hereunder.
7.05 Borrowing Base Deficiency. If at any time there exists a
Borrowing Base Deficiency the Borrower shall cure same in accordance with
Section 2.06 hereof.
7.06 Notices. The Borrower shall give notice to the Lender promptly:
(a) upon the Borrower becoming aware of, and in any event within one
(1) Business Day after, the occurrence of any Default or Event of Default
or any event of default or default under any other material agreement of
the Borrower;
(b) upon, and in any event within seven (7) calendar days after,
service of process on the Borrower or any of its Subsidiaries, or any agent
thereof for service of process, in respect of any legal or arbitrable
proceedings affecting the Borrower or any of its Subsidiaries to the extent
required by Section 7.02 hereof;
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(c) upon the Borrower becoming aware of any default related to any
Collateral, any Material Adverse Effect and any event or change in
circumstances which should reasonably be expected to have a Material
Adverse Effect;
(d) upon the Borrower becoming aware during the normal course of its
business that the Mortgaged Property in respect of any Mortgage Loan or
Mortgage Loans with an aggregate unpaid principal balance of at least
$1,000,000 has been damaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty, or otherwise damaged so as to
materially and adversely affect the Collateral Value of such Mortgage Loan;
(e) upon the entry of a judgment or decree in an amount in excess of
$1,000,000.
Each notice pursuant to this Section 7.06 (other than 7.06(e)) shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken or proposes to take with respect thereto.
7.07 Servicing. Except as provided in Section 11.15(c), the Borrower
shall not permit any Person other than the Borrower to service Mortgage Loans
without the prior written consent of the Lender, which consent shall not be
unreasonably withheld.
7.08 MERS. The Borrower is a member of MERS in good standing and
current in the payment of all fees and assessments imposed by MERS, and has
complied with all rules and procedures of MERS. In connection with the
assignment of any related Mortgage Loan registered on the MERS System, the
Borrower agrees that at the request of the Lender it will, at the Borrower's own
cost and expense, cause the MERS System to indicate that such Mortgage Loan has
been transferred to the Lender in accordance with the terms of this Loan
Agreement by including in MERS' computer files (a) the code in the field which
identifies the specific owner of the Mortgage Loans and (b) the code in the
field "Pool Field" which identifies the series in which such Mortgage Loans were
sold. The Borrower further agrees that it will not alter codes referenced in
this paragraph with respect to any related Mortgage Loan at any time that such
Mortgage Loan is subject to this Loan Agreement.
7.09 Underwriting Guidelines. The Borrower shall notify the Lender in
writing of any material modifications to the Underwriting Guidelines prior to
implementation of such change, and unless the Lender objects in writing within 5
Business Days of receipt of notice, the proposed modifications shall be deemed
acceptable.
7.10 Lines of Business. The Borrower will not engage to any material
extent in any line or lines of business activity other than the businesses
generally carried on by it as of the Effective Date.
7.11 Transactions with Affiliates. The Borrower will not enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Loan Agreement, (b) in
the ordinary course of the Borrower's business and (c) upon fair and reasonable
terms no less favorable to the Borrower than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate.
7.12 Reserved.
7.13 Limitation on Liens. The Borrower will not, nor will it permit or
allow others to, create, incur or permit to exist any Lien, security interest or
claim on or to any of the Collateral, except for Liens on the Collateral created
pursuant to this Loan Agreement. The Borrower will defend the Collateral
against, and will take such other action as is necessary to remove, any Lien,
security interest or claim on or to the Collateral, other than the security
interests created under this Loan Agreement, and the
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Borrower will defend the right, title and interest of the Lender in and to any
of the Collateral against the claims and demands of all persons whomsoever.
7.14 Limitation on Sale of Assets. Upon the occurrence of an Event of
Default, the Borrower shall not convey, sell, lease, assign, transfer or
otherwise dispose of (collectively, "Transfer"), all or substantially all of its
Property, business or assets (including, without limitation, receivables and
leasehold interests) whether now owned or hereafter acquired or allow any
Subsidiary to Transfer substantially all of its assets to any Person; provided,
that the Borrower may after prior written notice to the Lender allow such action
with respect to any Subsidiary which is not a material part of the Borrower's
overall business operations.
7.15 Limitation on Distributions. Without the Lender's consent, the
Borrower shall not make any payment on account of, or set apart assets for a
sinking or other analogous fund for the purchase, redemption, defeasance,
retirement or other acquisition of, any senior or subordinate debt (other than
debt with respect to warehouse facilities) or upon the occurrence of an Event of
Default, any stock of the Borrower, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Borrower.
7.16 Maintenance of Liquidity. The Borrowers shall ensure that, as of
the end of each calendar month, the Borrowers have, on a consolidated basis,
cash and Cash Equivalents in an amount not less than $20,000,000.
7.17 Maintenance of Tangible Net Worth. The Borrowers, on a
consolidated basis, shall maintain a Tangible Net Worth of not less than
$175,000,000.
7.18 Maintenance of Ratio of Indebtedness to Tangible Net Worth. The
Borrowers, on a consolidated basis, shall maintain a ratio of Indebtedness to
Tangible Net Worth of no greater than 25:1 and a ratio of Adjusted Indebtedness
to Tangible Net Worth of no greater than 15:1.
7.19 Restricted Payments. The Borrower shall not make any Restricted
Payments following an Event of Default.
7.20 Servicing Transmission. The Borrower shall provide to the Lender
on a monthly basis no later than 11:00 a.m. (eastern time) on the 11th calendar
day of each calendar month (or if such day is not a Business Day, the next
succeeding Business Day) (i) the Servicing Transmission, on a loan-by-loan basis
and in the aggregate, with respect to the Mortgage Loans serviced hereunder by
the Borrower which were funded prior to the first day of the current month,
summarizing the Borrower's delinquency and loss experience with respect to
Mortgage Loans serviced by the Borrower (including, in the case of the Mortgage
Loans, the following categories: current, 30-59, 60-89, 90-119, 120-149 and
150+) and (ii) any other information reasonably requested by the Lender with
respect to the Mortgage Loans.
7.21 No Amendment or Waiver. The Borrower will not, nor will it permit
or allow others to amend, modify, terminate or waive any provision of any
Mortgage Loan to which the Borrower is a party in any manner which shall
reasonably be expected to materially and adversely affect the value of such
Mortgage Loan as Collateral.
7.22 Insurance. The Borrower shall keep all property useful and
necessary in its business in good working order and condition. The Borrower
shall continue to maintain insurance coverage with respect to employee
dishonest, forgery for alteration, theft, disappearance and destruction, robbery
and safe burglary, property (other than money and securities) and computer fraud
in an aggregate amount of at least equal to $2,000,000 with respect to errors
and omissions insurance and $5,000,000 with respect to blanket insurance. The
Borrower shall maintain a fidelity bond as required by applicable state
regulations in respect of its officers, employees agents, with respect to any
claims made in
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connection with all or any portion of the Collateral. The Borrower shall notify
the Lender of any material change in the terms of any such fidelity bond or
insurance policy.
7.23 Further Identification of Collateral. The Borrower will furnish
to the Lender from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Lender or any Lender may reasonably request, all in reasonable
detail.
7.24 Mortgage Loan Determined to be Defective. Upon discovery by the
Borrower or the Lender of any breach of any representation or warranty listed on
Schedule 1 hereto applicable to any Mortgage Loan, the party discovering such
breach shall promptly give notice of such discovery to the other.
7.25 Interest Rate Protection Agreements. Upon the Lender's request,
the Borrower shall deliver to the Lender any and all information relating to
Interest Rate Protection Agreements.
7.26 Certificate of a Responsible Officer of the Borrower. At the time
that the Borrower delivers financial statements to the Lender in accordance with
Section 7.01 hereof, the Borrower shall forward to the Lender a certificate of a
Responsible Officer of the Borrower which demonstrates that the Borrower is in
compliance with the covenants set forth in Sections 7.16, 7.17 and 7.18 above.
7.27 Reserved.
7.28 Committed Warehouse Facility. MortgageIT, Inc. shall maintain
throughout the term of this Agreement, with a nationally recognized and
established lender (other than the Lender) at least one committed loan facility
that provides funding on a committed basis, and accommodates wet mortgage loans
in an amount not less than the amount provided hereunder, and which has a
committed amount equal to at least $200,000,000.
SECTION 8. EVENTS OF DEFAULT. Each of the following events shall
constitute an event of default (an "Event of Default") hereunder:
(a) the Borrower shall default in the payment of any principal of or
interest on any Advance when due (whether at stated maturity, upon
acceleration or at mandatory prepayment); or
(b) the Borrower shall default in the payment of any other amount
payable by it hereunder or under any other Loan Document after notification
by the Lender of such default, and such default shall have continued
unremedied for three Business Days; or
(c) any representation, warranty or certification made or deemed made
herein or in any other Loan Document by the Borrower or any certificate
furnished to the Lender pursuant to the provisions thereof, shall prove to
have been false or misleading in any material respect as of the time made
or furnished (other than the representations and warranties set forth in
Schedule 1 which shall be considered solely for the purpose of determining
the Collateral Value of the Mortgage Loans; unless (i) the Borrower shall
have made any such representations and warranties with knowledge that they
were materially false or misleading at the time made or (ii) any such
representations and warranties have been determined by the Lender in its
sole discretion to be materially false or misleading on a regular basis);
or
(d) the Borrower shall fail to comply with the requirements of Section
7.03(a), Section 7.04, Section 7.06 (a) or (c), Sections 7.12 through 7.19
or Section 7.22 hereof; or the Borrower shall default in the performance of
its obligations under Section 7.05 hereof, and such
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default shall continue unremedied for a period of one (1) Business Day; or
the Borrower shall otherwise fail to observe or perform any other agreement
contained in this Loan Agreement or any other Loan Document and such
failure to observe or perform shall continue unremedied for a period of
five (5) Business Days; or
(e) a final judgment or judgments for the payment of money in excess
of $2,000,000 in the aggregate (to the extent that it is, in the reasonable
determination of the Lender, uninsured and provided that any insurance or
other credit posted in connection with an appeal shall not be deemed
insurance for these purposes) shall be rendered against the Borrower or any
of its Subsidiaries by one or more courts, administrative tribunals or
other bodies having jurisdiction over them and the same shall not be
discharged (or provision shall not be made for such discharge) or bonded,
or a stay of execution thereof shall not be procured, within 60 days from
the date of entry thereof and the Borrower or any such Subsidiary shall
not, within said period of 60 days, or such longer period during which
execution of the same shall have been stayed or bonded, appeal therefrom
and cause the execution thereof to be stayed during such appeal; or
(f) the Borrower shall admit in writing its inability to pay its debts
as such debts become due; or
(g) the Borrower or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its property, (ii) make a general assignment for the
benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code or (vi) take any corporate or other action
for the purpose of effecting any of the foregoing; or
(h) a proceeding or case shall be commenced, without the application
or consent of the Borrower or any of its Subsidiaries, in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment
of its debts, (ii) the appointment of, or taking of possession by, a
receiver, custodian, trustee, examiner, liquidator or the like of the
Borrower or any such Subsidiary or of all or any substantial part of its
property, or (iii) similar relief in respect of the Borrower or any such
Subsidiary under any law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect,
for a period of 60 or more days; or an order for relief against the
Borrower or any such Subsidiary shall be entered in an involuntary case
under the Bankruptcy Code; or
(i) the Custodial Agreement or any Loan Document shall for whatever
reason (including an event of default thereunder) be terminated or the lien
on the Collateral created by this Loan Agreement or Borrower's material
obligations hereunder shall cease to be in full force and effect, or the
enforceability thereof shall be contested by the Borrower; or
(j) any materially adverse change in the Properties, business or
financial condition, or prospects of the Borrower or any of its
Subsidiaries or Affiliates, in each case as determined by the Lender in its
sole discretion, or the existence of any other condition which, in the
Lender's sole discretion, constitutes a material impairment of the
Borrower's ability to perform its obligations under this Loan Agreement,
the Note or any other Loan Document; or
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(k) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to
any Plan or any Lien in favor of the PBGC or a Plan shall arise on the
assets of the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be appointed, to administer
or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Lenders, likely to result in the termination of
such Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Lenders is likely to, incur any liability in connection with a withdrawal
from, or the insolvency or reorganization of, a Multiemployer Plan or (vi)
any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect; or
(l) any Change of Control of the Borrower shall have occurred without
the prior consent of the Lender; or
(m) the Borrower shall grant, or suffer to exist, any Lien on any
Collateral except the Liens contemplated hereby; or the Liens contemplated
hereby shall cease to be first priority perfected Liens on the Collateral
in favor of the Lender or shall be Liens in favor of any Person other than
the Lender; or
(n) the Lender shall reasonably request, specifying the reasons for
such request, information, and/or written responses to such requests,
regarding the financial well-being of the Borrower and such information
and/or responses shall not have been provided within three Business Days of
such request;
(o) the Borrower or any subsidiary or Affiliate of the Borrower shall
default under, or fail to perform as required under, or shall otherwise
materially breach the terms of any instrument, agreement or contract
between the Borrower or such other entity, on the one hand, and the Lender
or any of the Lender's Affiliates on the other; or the Borrower or any
subsidiary or Affiliate of the Borrower shall default under, or fail to
perform as requested under, the terms of any repurchase agreement, loan and
security agreement or similar credit facility or agreement for borrowed
funds entered into by the Borrower or such other entity and any third
party, which default or failure entitles any party to require acceleration
or prepayment of any indebtedness thereunder;
(p) the membership of any Borrower in MERS is terminated for any
reason; or
(q) a default or event of default shall have occurred under any other
Loan Document.
SECTION 9. REMEDIES UPON DEFAULT.
(a) Upon the occurrence of one or more Events of Default other than
those referred to in Section 8(g) or (h), the Lender may immediately declare the
principal amount of the Advances then outstanding under the Note to be
immediately due and payable, together with all interest thereon and reasonable
fees and out-of-pocket expenses accruing under this Loan Agreement; provided
that upon the occurrence of an Event of Default referred to in Sections 8(g) or
(h), such amounts shall immediately and automatically become due and payable
without any further action by any Person. Upon such declaration or such
automatic acceleration, the balance then outstanding on the Note shall become
immediately due and payable, without presentment, demand, protest or other
formalities of any kind, all of which are
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hereby expressly waived by the Borrower and may thereupon exercise any remedies
available to it at law and pursuant to the Loan Documents, including, but not
limited to, the transfer of servicing or the liquidation of the Collateral on a
servicing released basis.
(b) Upon the occurrence of one or more Events of Default, the Lender
shall have the right to obtain physical possession of the Servicing Records and
all other files of the Borrower relating to the Collateral and all documents
relating to the Collateral which are then or may thereafter come in to the
possession of the Borrower or any third party acting for the Borrower and the
Borrower shall deliver to the Lender such assignments as the Lender shall
request. The Lender shall be entitled to specific performance of all agreements
of the Borrower contained in this Loan Agreement.
SECTION 10. NO DUTY ON LENDER'S PART. The powers conferred on the
Lender hereunder are solely to protect the Lender's interests in the Collateral
and shall not impose any duty upon it to exercise any such powers. The Lender
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Borrower for any act or failure
to act hereunder, except for its or their own gross negligence or willful
misconduct.
SECTION 11. MISCELLANEOUS.
11.01 Waiver. No failure on the part of the Lender to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under any
Loan Document preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
11.02 Notices. Except as otherwise expressly permitted by this Loan
Agreement, all notices, requests and other communications provided for herein
and under the Custodial Agreement (including, without limitation, any
modifications of, or waivers, requests or consents under, this Loan Agreement)
shall be given or made in writing (including, without limitation, by telex or
telecopy) delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof); or, as to any party, at
such other address as shall be designated by such party in a written notice to
each other party. Except as otherwise provided in this Loan Agreement and except
for notices given under Section 2 (which shall be effective only on receipt),
all such communications shall be deemed to have been duly given when transmitted
by telex or telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
11.03 Indemnification and Expenses.
(a) The Borrower agrees to hold the Lender, and its Affiliates and
their officers, directors, employees, agents and advisors (each an "Indemnified
Party") harmless from and indemnify any Indemnified Party against all
liabilities, losses, damages, judgments, costs and expenses of any kind which
may be imposed on, incurred by or asserted against such Indemnified Party
(collectively, the "Costs") relating to or arising out of this Loan Agreement,
the Note, any other Loan Document or any transaction contemplated hereby or
thereby, or any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Loan Agreement, the Note, any other Loan
Document or any transaction contemplated hereby or thereby, that, in each case,
results from anything other than any Indemnified Party's gross negligence or
willful misconduct. Without limiting the generality of the foregoing, the
Borrower agrees to hold any Indemnified Party harmless from and indemnify such
Indemnified Party against all Costs with respect to all Mortgage Loans relating
to or arising out of any violation or alleged violation of any environmental
law, rule or regulation or any consumer credit laws, including without
limitation laws with respect to unfair or deceptive lending practices and
predatory lending practices, the Truth in Lending Act and/or the Real Estate
Settlement Procedures Act, that, in
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each case, results from anything other than such Indemnified Party's gross
negligence or willful misconduct. In any suit, proceeding or action brought by
an Indemnified Party in connection with any Mortgage Loan for any sum owing
thereunder, or to enforce any provisions of any Mortgage Loan, the Borrower will
save, indemnify and hold such Indemnified Party harmless from and against all
expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction or liability whatsoever of the account
debtor or obligor thereunder, arising out of a breach by the Borrower of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such account debtor or obligor or
its successors from the Borrower. The Borrower also agrees to reimburse an
Indemnified Party as and when billed by such Indemnified Party for all such
Indemnified Party's costs and expenses incurred in connection with the
enforcement or the preservation of such Indemnified Party's rights under this
Loan Agreement, the Note, any other Loan Document or any transaction
contemplated hereby or thereby, including without limitation the reasonable fees
and disbursements of its counsel. The Borrower hereby acknowledges that,
notwithstanding the fact that the Note is secured by the Collateral, the
obligation of the Borrower under the Note is a recourse obligation of the
Borrower.
(b) The Borrower agrees to pay as and when billed by the Lender all of
the out-of pocket costs and expenses incurred by the Lender in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Loan Agreement, the Note, any other Loan Document or any
other documents prepared in connection herewith or therewith. The Borrower
agrees to pay as and when billed by the Lender all of the out-of-pocket costs
and expenses incurred in connection with the consummation and administration of
the transactions contemplated hereby and thereby including, without limitation,
(i) all the reasonable fees, disbursements and expenses of counsel to the Lender
and (ii) all the due diligence, inspection, testing and review costs and
expenses incurred by the Lender with respect to Collateral under this Loan
Agreement, including, but not limited to, those costs and expenses incurred by
the Lender pursuant to Sections 11.03(a), 11.14 and 11.16 hereof.
11.04 Amendments. Except as otherwise expressly provided in this Loan
Agreement, any provision of this Loan Agreement may be modified or supplemented
only by an instrument in writing signed by the Borrower and the Lender and any
provision of this Loan Agreement may be waived by the Lender.
11.05 Successors and Assigns. This Loan Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.06 Survival. The obligations of the Borrower under Sections 3.03
and 11.03 hereof shall survive the repayment of the Advances and the termination
of this Loan Agreement. In addition, each representation and warranty made, or
deemed to be made by a request for a borrowing, herein or pursuant hereto shall
survive the making of such representation and warranty, and the Lender shall not
be deemed to have waived, by reason of making any Advance, any Default that may
arise by reason of such representation or warranty proving to have been false or
misleading, notwithstanding that the Lender may have had notice or knowledge or
reason to believe that such representation or warranty was false or misleading
at the time such Advance was made.
11.07 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this Loan
Agreement.
11.08 Counterparts. This Loan Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Loan Agreement by
signing any such counterpart.
11.09 Loan Agreement Constitutes Security Agreement; Governing Law.
This Loan Agreement shall be governed by New York law without reference to
choice of law doctrine (but with reference to Section 5-1401 of the New York
General Obligations Law, which by its terms applies to this
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Loan Agreement), and shall constitute a security agreement within the meaning of
the Uniform Commercial Code.
11.10 SUBMISSION TO JURISDICTION; WAIVERS. EACH PARTY HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS LOAN AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER
SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
11.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS LOAN AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
11.12 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Loan Agreement, the Note and the other Loan Documents to
which it is a party;
(b) the Lender has no fiduciary relationship to the Borrower, and the
relationship between the Borrower and the Lender is solely that of debtor
and creditor; and
(c) no joint venture exists among or between the Lender and the
Borrower.
11.13 Hypothecation or Pledge of Collateral. The Lender shall have
free and unrestricted use of all Collateral and nothing in this Loan Agreement
shall preclude the Lender from engaging in repurchase transactions with the
Collateral or otherwise pledging, repledging, transferring, hypothecating, or
rehypothecating the Collateral. Nothing contained in this Loan Agreement shall
obligate the Lender to segregate any Collateral delivered to the Lender by the
Borrower.
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11.14 Assignments; Participations.
(a) The Borrower may assign any of its rights or obligations hereunder
or under the Note only with the prior written consent of the Lender. The Lender
may assign or transfer to any bank or other financial institution that makes or
invests in loans or any Affiliate of the Lender all or any of its rights under
this Loan Agreement and the other Loan Documents.
(b) The Lender may, in accordance with applicable law, at any time
sell to one or more lenders or other entities ("Participants") participating
interests in any Advance, the Note, its right to make Advances, or any other
interest of the Lender hereunder and under the other Loan Documents. In the
event of any such sale by the Lender of participating interests to a
Participant, the Lender's obligations under this Loan Agreement to the Borrower
shall remain unchanged, the Lender shall remain solely responsible for the
performance thereof, the Lender shall remain the holder of the Note for all
purposes under this Loan Agreement and the other Loan Documents, and the
Borrower shall continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under this Loan Agreement
and the other Loan Documents. The Borrower agrees that if amounts outstanding
under this Loan Agreement and the Note are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Loan Agreement
and the Note to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Loan Agreement or the Note;
provided, that such Participant shall only be entitled to such right of set-off
if it shall have agreed in the agreement pursuant to which it shall have
acquired its participating interest to share with the Lender the proceeds
thereof. The Lender also agrees that each Participant shall be entitled to the
benefits of Sections 2.07 and 11.03 with respect to its participation in the
Advances outstanding from time to time; provided, that the Lender and all
Participants shall be entitled to receive no greater amount in the aggregate
pursuant to such Sections than the Lender would have been entitled to receive
had no such transfer occurred.
(c) The Lender may furnish any information concerning the Borrower or
any of its Subsidiaries in the possession of such Lender from time to time to
assignees and Participants (including prospective assignees and Participants)
only after notifying the Borrower in writing and securing signed confidentiality
statements (a form of which is attached hereto as Exhibit I) and only for the
sole purpose of evaluating participations and for no other purpose.
(d) The Borrower agrees to cooperate with the Lender in connection
with any such assignment and/or participation, to execute and deliver such
replacement notes, and to enter into such restatements of, and amendments,
supplements and other modifications to, this Loan Agreement and the other Loan
Documents in order to give effect to such assignment and/or participation. The
Borrower further agrees to furnish to any Participant identified by the Lender
to the Borrower copies of all reports and certificates to be delivered by the
Borrower to the Lender hereunder, as and when delivered to the Lender.
11.15 Servicing.
(a) The Borrower covenants to maintain or cause the servicing of the
Mortgage Loans to be maintained in conformity with Accepted Servicing Practices.
In the event that the preceding language is interpreted as constituting one or
more servicing contracts, each such servicing contract shall terminate
automatically upon the earliest of (i) an Event of Default, or (ii) the date on
which all the Secured Obligations have been paid in full, or (iii) the transfer
of servicing to any entity approved by the Lender.
(b) During the period the Borrower is servicing the Mortgage Loans,
(i) the Borrower agrees that Lender has a first priority perfected security
interest in all servicing records, including but not limited to any and all
servicing agreements, files, documents, records, data bases, computer tapes,
copies of computer tapes, proof of insurance coverage, insurance policies,
appraisals,
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other closing documentation, payment history records, and any other records
relating to or evidencing the servicing of such Mortgage Loans (the "Servicing
Records"), and (ii) the Borrower grants the Lender a security interest in all
servicing fees and rights relating to the Mortgage Loans and all Servicing
Records to secure the obligation of the Borrower or its designee to service in
conformity with this Section and any other obligation of Borrower to the Lender.
The Borrower covenants to safeguard such Servicing Records and to deliver them
promptly to the Lender or its designee (including the Custodian) at the Lender's
request. It is understood and agreed by the parties that prior to an Event of
Default, the Borrower shall retain the servicing fees with respect to the
Mortgage Loans.
(c) If the Mortgage Loans are serviced by any other third party
servicer (such third party servicer, the "Subservicer") the Borrower shall
provide a copy of the related servicing agreement with a properly executed
Instruction Letter to the Lender at least three (3) Business Days prior to the
applicable Funding Date or the date on which the Subservicer shall begin
subservicing the Mortgage Loans, which shall be in the form and substance
acceptable to Lender (the "Servicing Agreement") and shall have obtained the
written consent of the Lender for such Subservicer to subservice the Mortgage
Loans. Initially, the Subservicer shall be GMAC Mortgage Corporation.
(d) The Borrower agrees that upon the occurrence of an Event of
Default, the Lender may terminate the Borrower in its capacity as servicer and
terminate any Servicing Agreement and transfer such servicing to the Lender or
its designee, at no cost or expense to the Lender. In addition, the Borrower
shall provide to the Lender an Instruction Letter from the Borrower to the
effect that upon the occurrence of an Event of Default, the Lender may terminate
any Subervicer or Servicing Agreement and direct that collections with respect
to the Mortgage Loans be remitted in accordance with the Lender's instructions.
The Borrower agrees to cooperate with the Lender in connection with the transfer
of servicing.
(e) After the Funding Date, until the pledge of any Mortgage Loan is
relinquished by the Custodian, the Borrower will have no right to modify or
alter the terms of the Mortgage Loan or consent to the modification or
alteration of the terms of any Mortgage Loan, and the Borrower will have no
obligation or right to repossess any Mortgage Loan or substitute another
Mortgage Loan, except as provided in any Custodial Agreement.
(f) The Borrower shall permit the Lender to inspect upon reasonable
prior written notice (which shall be no more than five (5) Business Days prior
to such date) at a mutually convenient time, the Borrower's or its Affiliate's
servicing facilities, as the case may be, for the purpose of satisfying the
Lender that the Borrower or its Affiliate, as the case may be, has the ability
to service the Mortgage Loans as provided in this Loan Agreement. In addition,
with respect to any Subservicer which is not an Affiliate of the Borrower, the
Borrower shall use its best efforts to enable the Lender to inspect the
servicing facilities of such Subservicer.
11.16 Periodic Due Diligence Review. The Borrower acknowledges that
the Lender has the right to perform continuing due diligence reviews with
respect to the Mortgage Loans, for purposes of verifying compliance with the
representations, warranties and specifications made hereunder, or otherwise, and
the Borrower agrees that upon reasonable (but no less than one (1) Business
Day's) prior notice to the Borrower, the Lender or its authorized
representatives will be permitted during normal business hours to examine,
inspect, make copies of, and make extracts of, the Mortgage Files and any and
all documents, records, agreements, instruments or information relating to such
Mortgage Loans in the possession, or under the control, of the Borrower and/or
the Custodian. The Borrower also shall make available to the Lender a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting the Mortgage Files and the Mortgage Loans. Without limiting
the generality of the foregoing, the Borrower acknowledges that the Lender shall
make Advances to the Borrower based solely upon the information provided by the
Borrower to the Lender in the Mortgage Loan Data Transmission and the
representations, warranties and covenants contained herein, and that the Lender,
at its option, has the right, at any time to conduct a partial or complete due
diligence review on some or all of the Mortgage Loans securing such Advance,
including, without limitation, ordering new credit reports, new appraisals
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on the related Mortgaged Properties and otherwise re-generating the information
used to originate such Mortgage Loan. The Lender may underwrite such Mortgage
Loans itself or engage a mutually agreed upon third party underwriter to perform
such underwriting. The Borrower agrees to cooperate with the Lender and any
third party underwriter in connection with such underwriting, including, but not
limited to, providing the Lender and any third party underwriter with access to
any and all documents, records, agreements, instruments or information relating
to such Mortgage Loans in the possession, or under the control, of the Borrower.
In addition, the Lender has the right to perform continuing Due Diligence
Reviews of the Borrower and its Affiliates, directors, officers, employees and
significant shareholders. The Borrower and Lender further agree that all
out-of-pocket costs and expenses incurred by the Lender in connection with the
Lender's activities pursuant to this Section 11.16 shall be paid by the
Borrower.
11.17 Set-Off. In addition to any rights and remedies of the Lender
provided by this Loan Agreement and by law, the Lender shall have the right,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all Property and deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Lender or any
Affiliate thereof to or for the credit or the account of the Borrower. The
Lender may set-off cash, the proceeds of the liquidation of any Collateral and
all other sums or obligations owed by the Lender or its Affiliates to Borrower
against all of Borrower's obligations to the Lender or its Affiliates, whether
under this Loan Agreement or under any other agreement between the parties or
between Borrower and any affiliate of the Lender, or otherwise, whether or not
such obligations are then due, without prejudice to the Lender's or its
Affiliate's right to recover any deficiency. The Lender agrees promptly to
notify the Borrower after any such set-off and application made by the Lender;
provided that the failure to give such notice shall not affect the validity of
such set-off and application.
11.18 Intent. The parties recognize that each Advance is a "securities
contract" as that term is defined in Section 741 of Title 11 of the United
States Code, as amended.
11.19 Replacement by Repurchase Agreement. The Borrower hereby
acknowledges and agrees that this Loan Agreement may at any time and without any
further cost to the Borrower, in the sole discretion of the Lender, be replaced
by a repurchase facility with substantially similar terms as those contained in
this Loan Agreement. The Borrower hereby agrees to take such action and execute
such documents and instruments as is necessary to effectuate such conversion.
11.20 Joint and Several Liability; Cross-Default. MortgageIT, Inc. and
MortgageIT Holdings, Inc. each acknowledge and agree that they are each jointly
and severally liable to the Lender for all representations, warranties,
covenants, obligations and liabilities of each Borrower hereunder and that any
Default, Event of Default or breach of a representation, warranty or covenant by
either Borrower under this Agreement is hereby considered a Default, Event of
Default or breach by each Borrower.
11.21 Entire Agreement. This Loan Agreement embodies the entire
agreement and understanding of the parties hereto and supersedes any and all
prior agreements, arrangements and understandings relating to the matters
provided for herein. No alteration, waiver, amendments, or change or supplement
hereto shall be binding or effective unless the same is set forth in writing by
a duly authorized representative of each party hereto.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be duly executed and delivered as of the day and year first above written.
BORROWER
MORTGAGEIT, INC.
By: /s/ XXXX X. XXXX
------------------------------------
Title: General Counsel and Secretary
Address for Notices:
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Operating Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
MORTGAGEIT HOLDINGS, INC.
By: /s/ XXXX X. XXXX
------------------------------------
Title: General Counsel and Secretary
00 Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Operating Officer
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
LENDER
GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC.
By: /s/ XXXXXXX XXXXXXXXX
------------------------------------
Title: Senior Vice President
Address for Notices:
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Attention: General Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS
Eligible Mortgage Loans
As to each Mortgage Loan that forms part of the Collateral hereunder
(and the related Mortgage, Mortgage Note, Assignment of Mortgage and Mortgaged
Property), the Borrower shall be deemed to make the following representations
and warranties to the Lender as of such date and as of each date Collateral
Value is determined:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Data Transmission with respect to the Mortgage Loan is complete,
true and correct in all material respects.
(b) Payments Current. The first contractually due Monthly Payment
shall have been made within thirty (30) days of the related due date therefor.
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage securing the Mortgage Loan, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. Neither the Borrower nor the Qualified
Originator from which the Borrower acquired the Mortgage Loan has advanced
funds, or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the proceeds of the
Mortgage Loan, whichever is more recent, to the day which precedes by one month
the Due Date of the first installment of principal and interest thereunder.
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination; except by a written instrument which has been
recorded, if necessary to protect the interests of the Lender, and which has
been delivered to the Custodian and the terms of which are reflected in the
Mortgage Loan Schedule. The substance of any such waiver, alteration or
modification has been approved by the title insurer, to the extent required by
the title insurance policy, and its terms are reflected on the Mortgage Loan
Schedule. No Mortgagor in respect of the Mortgage Loan has been released, in
whole or in part, except in connection with an assumption agreement approved by
the title insurer, to the extent required by such policy, and which assumption
agreement is part of the Mortgage File delivered to the Custodian and the terms
of which are reflected in the Mortgage Loan Schedule.
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, setoff, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto, and no Mortgagor in respect of the Mortgage Loan was a debtor
in any state or Federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated.
(f) Hazard Insurance. The Mortgaged Property is insured by a fire and
extended perils insurance policy, issued by a Qualified Insurer, and such other
hazards as are customary in the area
where the Mortgaged Property is located, and to the extent required by the
Borrower as of the date of origination consistent with the Underwriting
Guidelines, against earthquake and other risks insured against by Persons
operating like properties in the locality of the Mortgaged Property, in an
amount not less than the greatest of (i) 100% of the replacement cost of all
improvements to the Mortgaged Property, (ii) either (A) the outstanding
principal balance of the Mortgage Loan with respect to each First Lien Mortgage
Loan or (B) with respect to each Second Lien Mortgage Loan, the sum of the
outstanding principal balance of the First Lien Mortgage Loan and the
outstanding principal balance of the Second Lien Mortgage Loan, (iii) the amount
necessary to avoid the operation of any co-insurance provisions with respect to
the Mortgaged Property, and consistent with the amount that would have been
required as of the date of origination in accordance with the Underwriting
Guidelines or (iv) the amount necessary to fully compensate for any damage or
loss to the improvements that are a part of such property on a replacement cost
basis. If any portion of the Mortgaged Property is in an area identified by any
federal Governmental Authority as having special flood hazards, and flood
insurance is available, a flood insurance policy meeting the current guidelines
of the Federal Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(1) the outstanding principal balance of the Mortgage Loan, (2) the full
insurable value of the Mortgaged Property, and (3) the maximum amount of
insurance available under the Flood Disaster Protection Act of 1973, as amended.
All such insurance policies (collectively, the "hazard insurance policy")
contain a standard mortgagee clause naming the Borrower, its successors and
assigns (including without limitation, subsequent owners of the Mortgage Loan),
as mortgagee, and may not be reduced, terminated or canceled without 30 days'
prior written notice to the mortgagee. No such notice has been received by the
Borrower. All premiums due and owing on such insurance policy have been paid.
The related Mortgage obligates the Mortgagor to maintain all such insurance and,
at such Mortgagor's failure to do so, authorizes the mortgagee to maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement therefor
from such Mortgagor. Where required by state law or regulation, the Mortgagor
has been given an opportunity to choose the carrier of the required hazard
insurance, provided the policy is not a "master" or "blanket" hazard insurance
policy covering a condominium, or any hazard insurance policy covering the
common facilities of a planned unit development. The hazard insurance policy is
the valid and binding obligation of the insurer and is in full force and effect.
The Borrower has not engaged in, and has no knowledge of the Mortgagor's having
engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity and
binding effect of either including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
Person, and no such unlawful items have been received, retained or realized by
the Borrower.
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, all applicable predatory and abusive lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the origination and servicing of such Mortgage
Loan have been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations, and the
Borrower shall maintain or shall cause its agent to maintain in its possession,
available for the inspection of the Lender, and shall deliver to the Lender,
upon two Business Days' request, evidence of compliance with all such
requirements.
(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole-or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission other than in the case of a release of
a portion of the land comprising a Mortgaged Property or a release of a blanket
Mortgage which release will not cause the Mortgage Loan to fail to satisfy the
Underwriting Guidelines. The Borrower has not waived the
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performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Borrower waived any default resulting from any action or inaction by the
Mortgagor.
(i) Location and Type of Mortgaged Property. The Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and consists of a
single parcel of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit in
a condominium project, or an individual unit in a planned unit development or a
de minimis planned unit development, provided, however, that any condominium
unit or planned unit development shall conform with the applicable Xxxxxx Xxx
and Xxxxxxx Mac requirements regarding such dwellings, that up to 5% of the
Mortgage Loans (by outstanding principal balance) may be Cooperative Loans and
that no residence or dwelling is a mobile home or a manufactured dwelling. No
portion of the Mortgaged Property is used for commercial purposes.
(j) Valid Lien. The Mortgage is a valid, subsisting, enforceable and
perfected (A) first lien and first priority security interest with respect to
each Mortgage Loan which is indicated by the Borrower to be a First Lien (as
reflected on the Mortgage Loan Data Transmission), or (B) second lien and second
priority security interest with respect to each Mortgage Loan which is indicated
by the Borrower to be a Second Lien (as reflected on the Mortgage Loan Data
Transmission), in either case, on the real property included in the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing and with respect
to Cooperative Loans, including the Proprietary Lease and the Cooperative
Shares. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not yet
due and payable;
(2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to prudent mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered
to the originator of the Mortgage Loan and (a) referred to or otherwise
considered in the appraisal made for the originator of the Mortgage Loan or
(b) which do not adversely affect the Appraised Value of the related
Mortgaged Property set forth in such appraisal;
(3) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended to
be provided by the Mortgage or the use, enjoyment, value or marketability
of the related Mortgaged Property; and
(4) with respect to each Mortgage Loan which is indicated by the
Borrower to be a Second Lien Mortgage Loan (as reflected on the Mortgage
Loan Data Transmission) a First Lien on the Mortgaged Property.
With respect to each Cooperative Loan, each assignment of Proprietary
Lease creates a valid enforceable and subsisting first security interest in the
collateral securing the related Mortgage Note subject only to (a) the lien of
the related Cooperative Corporation for unpaid assessments representing the
obligor's pro rata share of the Cooperative Corporation's payments for its
blanket mortgage, current and future real property taxes, insurance premiums,
maintenance fees and other assessments to which like collateral is commonly
subject and (b) other matters to which like collateral is commonly subject which
do not materially interfere with the benefits of the security intended to be
provided by the assignment of Proprietary Lease; provided, however, that the
appurtenant Proprietary Lease may be subordinated or otherwise subject to the
lien of any mortgage on the Cooperative Project.
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Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable (A) first lien and first priority
security interest with respect to each Mortgage Loan which is indicated by the
Borrower to be a First Lien (as reflected on the Mortgage Loan Data
Transmission), or (B) second lien and second priority security interest with
respect to each Mortgage Loan which is indicated by the Borrower to be a Second
Lien Mortgage Loan (as reflected on the Mortgage Loan Data Transmission), in
either case, on the property described therein and the Borrower has full right
to pledge and assign the same to the Lender. The Mortgaged Property was not, as
of the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage.
(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
and any other agreement executed and delivered by a Mortgagor or guarantor, if
applicable, in connection with a Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms. All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by such related parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any Person, including,
without limitation, the Mortgagor, any appraiser, any builder or developer, or
any other party involved in the origination of the Mortgage Loan. The Borrower
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein.
(l) Full Disbursement of Proceeds. The proceeds of the Mortgage Loan
have been fully disbursed and there is no further requirement for future
advances thereunder, and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any escrow funds
therefor have been complied with (except to the extent that holdbacks and
escrows are permitted by Xxxxxx Mae or Xxxxxxx Mac). All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.
(m) Ownership. The Borrower is the sole owner and holder of the
Mortgage Loan. All Mortgage Loans acquired by the Borrower from third parties
(including affiliates) were acquired in a true and legal sale pursuant to which
such third party sold, transferred, conveyed and assigned to the Borrower all of
its right, title and interest in, to and under such Mortgage Loan and retained
no interest in such Mortgage Loan. In connection with such sale, such third
party received reasonably equivalent value and fair consideration and, in
accordance with GAAP and for federal income tax purposes, reported the sale of
such Mortgage Loan to the Borrower as a sale of its interests in such Mortgage
Loan. The Mortgage Loan is not assigned or pledged, and the Borrower has good,
indefeasible and marketable title thereto, and has full right to transfer,
pledge and assign the Mortgage Loan to the Lender free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to assign, transfer and
pledge each Mortgage Loan pursuant to this Loan Agreement and following the
pledge of each Mortgage Loan, the Lender will hold such Mortgage Loan free and
clear of any encumbrance, equity, participation interest, lien, pledge, charge,
claim or security interest except any such security interest created pursuant to
the terms of this Loan Agreement.
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (i) in
compliance with any and all applicable licensing requirements of
-4-
the laws of the state wherein the Mortgaged Property is located, and (ii) either
(A) organized under the laws of such state, (B) qualified to do business in such
state, (C) a federal savings and loan association, a savings bank or a national
bank having a principal office in such state or (D) not doing business in such
state.
(o) LTV. As of the date of origination of the Mortgage Loan, the LTV
and CLTV (if applicable) are as identified on the Mortgage Loan Data
Transmission.
(p) Title Insurance. The Mortgage Loan is covered by either (i) an
attorney's opinion of title and abstract of title, the form and substance of
which is acceptable to prudent mortgage lending institutions making mortgage
loans in the area wherein the Mortgaged Property is located or (ii) an ALTA
Lender's title insurance policy or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance
policy is issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Borrower, its successors and assigns, as to the first
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization, the
maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (1), (2), (3) and, with
respect to each Mortgage Loan which is indicated by the Borrower to be a Second
Lien Mortgage Loan (as reflected on the Mortgage Loan Data Transmission) clause
(4) of paragraph (j) of this Part I of Schedule 1, and in the case of adjustable
rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such Lender's title insurance policy affirmatively insures ingress
and egress and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exception or to replace the standard survey exception
with a specific survey reading. The Borrower, its successors and assigns, are
the sole insureds of such Lender's title insurance policy, and such Lender's
title insurance policy is valid and remains in full force and effect and will be
in force and effect upon the consummation of the transactions contemplated by
this Loan Agreement. No claims have been made under such Lender's title
insurance policy, and no prior holder or servicer of the related Mortgage,
including the Borrower, has done, by act or omission, anything which would
impair the coverage of such Lender's title insurance policy, including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other Person, and no such unlawful items have been received,
retained or realized by the Borrower.
(q) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event has
occurred which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation or event
of acceleration, and neither the Borrower nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each
Mortgage Loan which is indicated by the Borrower to be a Second Lien Mortgage
Loan (as reflected on the Mortgage Loan Data Transmission) (i) the First Lien is
in full force and effect, (ii) there is no default, breach, violation or event
of acceleration existing under such First Lien mortgage or the related mortgage
note, (iii) no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration thereunder, and either (A) the First Lien
mortgage contains a provision which allows or (B) applicable law requires, the
mortgagee under the second lien Mortgage Loan to receive notice of, and affords
such mortgagee an opportunity to cure any default by payment in full or
otherwise under the First Lien mortgage.
-5-
(r) No Mechanics' Liens. At origination, there were no mechanics' or
similar liens or claims which have been filed for work, labor or material (and
no rights are outstanding that under the law could give rise to such liens)
affecting the Mortgaged Property which are or may be liens prior to, or equal or
coordinate with the lien of the Mortgage.
(s) Location of Improvements: No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning and building law, ordinance or
regulation.
(t) Origination: Payment Terms. The Mortgage Loan was originated by or
in conjunction with a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or similar banking institution which is supervised and
examined by a federal or state authority. Except if the Mortgage Loan is a HELOC
or an interest-only loan, principal payments on the Mortgage Loan commenced no
more than sixty (60) days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate is adjusted, with respect to
adjustable rate Mortgage Loans, on each Interest Rate Adjustment Date to equal
the Index plus the Gross Margin (rounded up or down to the nearest .125 %),
subject to the Mortgage Interest Rate Cap. The Mortgage Note is payable on the
day set forth in the Mortgage Note in equal monthly installments of principal
and interest, which installments of interest, with respect to adjustable rate
Mortgage Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than 30 years from
commencement of amortization. The Due Date of the first payment under the
Mortgage Note is no more than 60 days from the date of the Mortgage Note.
(u) Customary Provisions. The Mortgage Note has a stated maturity. The
Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure. Upon default by a
Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage.
(v) Conformance with Underwriting Guidelines and Agency Standards. The
Mortgage Loan was underwritten in accordance with the applicable Underwriting
Guidelines. The Mortgage Note and Mortgage are on forms similar to those used by
Xxxxxxx Mac or Xxxxxx Mae and the Borrower has not made any representations to a
Mortgagor that are inconsistent with the mortgage instruments used.
(w) Occupancy of the Mortgaged Property. As of the Funding Date the
Mortgaged Property is either vacant or lawfully occupied under applicable law.
All inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities. The Borrower has not received written notification
from any governmental authority that the Mortgaged Property is in material
non-compliance with such laws or regulations, is being used, operated
-6-
or occupied unlawfully or has failed to have or obtain such inspection, licenses
or certificates, as the case may be. The Borrower has not received notice of any
violation or failure to conform with any such law, ordinance, regulation,
standard, license or certificate. Except as otherwise set forth in the Mortgage
Loan Data Transmission, the Mortgagor represented at the time of origination of
the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence.
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above.
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Custodian or
the Lender to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor.
(z) Delivery of Mortgage Documents. If (a) the Mortgage Loan is a Dry
Loan (other than a Cooperative Loan), the Mortgage Note, the Mortgage, the
Assignment of Mortgage (other than for a MERS Mortgage Loan), (b) the Mortgage
Loan is a Dry Loan that is a Cooperative Loan, the Mortgage Note, the
Proprietary Lease, the assignment of Proprietary Lease, the Cooperative Shares
and in the case of (a) and (b), any other documents required to be delivered
under the Custodial Agreement for each Mortgage Loan have been delivered to the
Custodian. The Borrower or its agent is in possession of a complete, true and
materially accurate Mortgage File in compliance with the Custodial Agreement,
except for such documents the originals of which have been delivered to the
Custodian.
(aa) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.
(bb) Due-On-Sale. The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder.
(cc) No Buydown Provisions: No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Borrower, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature.
(dd) Consolidation of Future Advances. Any future advances made to the
Mortgagor prior to the origination of the Mortgage Loan have been consolidated
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having (A) first lien priority with respect to
each Mortgage Loan which is indicated by the Borrower to be a First Lien (as
reflected on the Mortgage Loan Data Transmission), or (B) second lien priority
with respect to each Mortgage Loan which is indicated by the Borrower to be a
Second Lien Mortgage Loan (as reflected on the Mortgage Loan Data Transmission),
in either case, by a title insurance policy, an endorsement to the policy
insuring the mortgagee's consolidated interest or by other title evidence
acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal amount does
-7-
not exceed the original principal amount of the Mortgage Loan or, with respect
to HELOCs, the original commitment amount.
(ee) Mortgaged Property Undamaged. The Mortgaged Property (and with
respect to any Cooperative Loan, the Cooperative Unit) is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other casualty
so as to affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises were intended and each
Mortgaged Property is in good repair. There have not been any condemnation
proceedings with respect to the Mortgaged Property and the Borrower has no
knowledge of any such proceedings.
(ff) Collection Practices: Escrow Deposits: Interest Rate Adjustments.
The origination and collection practices used by the originator, each servicer
of the Mortgage Loan and the Borrower with respect to the Mortgage Loan have
been in all material respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and proper.
With respect to escrow deposits and Escrow Payments (other than with respect to
each Mortgage Loan which is indicated by the Borrower to be a Second Lien
Mortgage Loan and for which the mortgagee under the First Lien is collecting
Escrow Payments (as reflected on the Mortgage Loan Data Transmission), all such
payments are in the possession of, or under the control of, the Borrower and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments have
been collected in full compliance with state and federal law. An escrow of funds
is not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Borrower have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage Note. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited.
(gg) Conversion to Fixed Interest Rate. With respect to adjustable
rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest
rate Mortgage Loan.
(hh) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, PMI Policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with the
placement of any such insurance, no commission, fee, or other compensation has
been or will be received by the Borrower or by any officer, director, or
employee of the Borrower or any designee of the Borrower or any corporation in
which the Borrower or any officer, director, or employee had a financial
interest at the time of placement of such insurance.
(ii) Servicepersons' Civil Relief Act. The Mortgagor has not notified
the Borrower, and the Borrower has no knowledge, of any relief requested or
allowed to the Mortgagor under the Servicepersons' Civil Relief Act of 1940.
(jj) Appraisal. Except with respect to HELOCs originated in accordance
with the Underwriting Guidelines, or if not otherwise required by Xxxxxx Xxx or
Xxxxxxx Mac for such Mortgage Loan, the Mortgage File contains an appraisal of
the related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser, duly appointed by the Borrower or the
Qualified Originator, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of Xxxxxx Mae or Xxxxxxx
Mac and Title XI of the Federal Institutions Reform, Recovery, and Enforcement
Act of 1989 as
-8-
amended and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
(kk) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of adjustable rate mortgage loans, and
the Borrower maintains such statement in the Mortgage File.
(ll) Construction or Rehabilitation of Mortgaged Property. No Mortgage
Loan was made in connection with the construction or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property.
(mm) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Funding Date (whether or not known to the Borrower on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any private mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Borrower, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay.
(nn) Capitalization of Interest. The Mortgage Note does not by its
terms provide for the capitalization or forbearance of interest.
(oo) No Equity Participation. No document relating to the Mortgage
Loan provides for any contingent or additional interest in the form of
participation in the cash flow of the Mortgaged Property or a sharing in the
appreciation of the value of the Mortgaged Property. The indebtedness evidenced
by the Mortgage Note is not convertible to an ownership interest in the
Mortgaged Property or the Mortgagor and the Borrower has not financed nor does
it own directly or indirectly, any equity of any form in the Mortgaged Property
or the Mortgagor.
(pp) Withdrawn Mortgage Loans. If the Mortgage Loan has been released
to the Borrower pursuant to a Request for Release as permitted under Section 5
of the Custodial Agreement, then the promissory note relating to the Mortgage
Loan was returned to the Custodian within 7 Business Days.
(qq) No Exception. Other than as noted by the Custodian on the
Exception Report; no Exception exists (as defined in the Custodial Agreement)
with respect to the Mortgage Loan which would materially adversely affect the
Mortgage Loan or the Lender's security interest, granted by the Borrower, in the
Mortgage Loan as determined by the Lender in its sole discretion and which, in
the case of a Wet Loan, has not been cured within seven (7) Business Days of the
funding date.
(rr) Qualified Originator. The Mortgage Loan has been originated by,
and, if applicable, purchased by the Borrower from, a Qualified Originator.
(ss) Mortgage Submitted for Recordation. The Mortgage (other than for
a MERS Mortgage Loan) has been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the Mortgaged Property
is located.
-9-
(tt) First Lien Consent. With respect to each Mortgage Loan which is a
Second Lien, (i) if the related first lien provides for negative amortization,
the LTV was calculated at the maximum principal balance of such first lien that
could result upon application of such negative amortization feature, and (ii)
either no consent for the Mortgage Loan is required by the holder of the first
lien or such consent has been obtained and is contained in the Mortgage File.
(uu) Acceptable Investment. No specific circumstances or conditions
exist with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that should reasonably be expected to (i) cause
private institutional investors which invest in Mortgage Loans similar to the
Mortgage Loan to regard the Mortgage Loan as an unacceptable investment, (ii)
cause the Mortgage Loan to be more likely to become past due in comparison to
similar Mortgage Loans, or (iii) adversely affect the value or marketability of
the Mortgage Loan in comparison to similar Mortgage Loans;
(vv) Environmental Matters. The Mortgaged Property is free from any
and all toxic or hazardous substances and there exists no violation of any
local, state or federal environmental law, rule or regulation;
(ww) Ground Leases. With respect to each ground lease to which the
Mortgaged Property is subject (a "Ground Lease"): (i) the Mortgagor is the owner
of a valid and subsisting interest as tenant under the Ground Lease; (ii) the
Ground Lease is in full force and effect, unmodified and not supplemented by any
writing or otherwise; (iii) all rent, additional rent and other charges reserved
therein have been paid to the extent they are payable to the date hereof; (iv)
the Mortgagor enjoys the quiet and peaceful possession of the estate demised
thereby, subject to any sublease; (v) the Mortgagor is not in default under any
of the terms thereof and there are no circumstances which, with the passage of
time or the giving of notice or both, would constitute an event of default
thereunder; (vi) the lessor under the Ground Lease is not in default under any
of the terms or provisions thereof on the part of the lessor to be observed or
performed; (vii) the lessor under the Ground Lease has satisfied all of its
repair or construction obligations, if any, to date pursuant to the terms of the
Ground Lease; (viii) the remaining term of the Ground Lease extends not less
than ten (10) years following the maturity date of such Mortgage Loan; and (ix)
the execution, delivery and performance of the Mortgage do not require the
consent (other than those consents which have been obtained and are in full
force and effect) under, and will not contravene any provision of or cause a
default under, the Ground Lease;
(xx) Value of Mortgaged Property. The Borrower has no knowledge of any
circumstances existing that should reasonably be expected to adversely affect
the value or the marketability of the Mortgaged Property or the Mortgage Loan or
to cause the Mortgage Loan to prepay during any period materially faster or
slower than the Mortgage Loans originated by the Borrower generally;
(yy) HOEPA. No Mortgage Loan is (a) subject to the provisions of the
Homeownership and Equity Protection Act of 1994 as amended ("HOEPA"), (b) a
"high cost" mortgage loan, "covered" mortgage loan or "predatory" mortgage loan
or any other comparable term, no matter how defined, under any federal, state or
local law, or (c) subject to any comparable federal, state or local statutes or
regulations or any other statute or regulation providing for heightened scrutiny
or assignee liability to holders of such mortgage loans;
(zz) No Predatory Lending. No predatory, abusive or deceptive lending
practices, including but not limited to, the extension of credit to a mortgagor
without regard for the mortgagor's
-10-
ability to repay the Mortgage Loan and the extension of credit to a mortgagor
which has no tangible net benefit to the mortgagor, were employed in connection
with the origination of the Mortgage Loan;
(aaa) Georgia Mortgage Loans. No Mortgage Loan which is secured by a
Mortgaged Property which is located in the state of Georgia was originated prior
to March 7, 2005; and
(bbb) Cooperative Loans. With respect to each Cooperative Loan, each
original UCC financing statement, continuation statement or other governmental
filing or recordation necessary to create or preserve the perfection and
priority of the first priority lien and security interest in the Cooperative
Shares and Proprietary Lease has been timely and properly made. Any security
agreement, chattel mortgage or equivalent document related to the Cooperative
Loan and delivered to the Borrower or its designee establishes in the Borrower a
valid and subsisting perfected first lien on and security interest in the
Mortgaged Property described therein, and the Borrower has full right to sell
and assign the same.
(ccc) MERS Mortgage Loans. With respect to each MERS Mortgage Loan, a
Mortgage Identification Number has been assigned by MERS and such Mortgage
Identification Number is accurately provided on the Mortgage Loan Schedule. The
related Assignment of Mortgage to MERS has been duly and properly recorded. With
respect to each MERS Mortgage Loan, Borrower has not received any notice of
liens or legal actions with respect to such Mortgage Loan and no such notices
have been electronically posted by MERS.
-11-
SCHEDULE 2
FILING JURISDICTIONS AND OFFICES
MortgageIT, Inc.: New York Secretary of State
MortgageIT Holdings, Inc.: Maryland State Department of Assessments and Taxation
SCHEDULE 3
RELEVANT STATES
All 50 states
SCHEDULE 4
SUBSIDIARIES
MortgageIT, Inc. (a wholly owned subsidiary of MortgageIT Holdings, Inc.)
MortgageIT SPV Holdings, Inc. (a wholly owned subsidiary of MortgageIT Holdings,
Inc.)
MortgageIT Securities Corp. (a wholly owned subsidiary of MortgageIT, Inc.)
Home Closer, LLC (a wholly owned subsidiary of MortgageIT, Inc.)
Unified Settlement Services, LLC (a wholly owned subsidiary of Home Closer, LLC)
EXHIBIT A
[FORM OF PROMISSORY NOTE]
$250,000,000
February 15, 0000 Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, MORTGAGEIT, INC., a New York corporation and
MORTGAGEIT HOLDINGS, INC., a New York corporation (each, a "Borrower" and
collectively, the "Borrowers"), hereby promise to pay to the order of GREENWICH
CAPITAL FINANCIAL PRODUCTS, INC. (the "Lender"), at the principal office of the
Lender at 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, in lawful money of
the United States, and in immediately available funds, the principal sum of Two
Hundred Fifty Million Dollars ($250,000,000) (or such lesser amount as shall
equal the aggregate unpaid principal amount of the Advances made by the Lender
to the Borrowers under the Loan Agreement), on the dates and in the principal
amounts provided in the Loan Agreement, and to pay interest on the unpaid
principal amount of each such Advance, at such office, in like money and funds,
for the period commencing on the date of such Advance until such Advance shall
be paid in full, at the rates per annum and on the dates provided in the Loan
Agreement.
The date, amount and interest rate of each Advance made by the Lender
to the Borrowers, and each payment made on account of the principal thereof,
shall be recorded by the Lender on its books and, prior to any transfer of this
Note, endorsed by the Lender on the schedule attached hereto or any continuation
thereof; provided, that the failure of the Lender to make any such recordation
or endorsement shall not affect the obligations of the Borrowers to make a
payment when due of any amount owing under the Loan Agreement or hereunder in
respect of the Advances made by the Lender.
This Note is the Note referred to in the Master Loan and Security
Agreement dated as of February 15, 2005 (as amended, supplemented or otherwise
modified and in effect from time to time, the "Loan Agreement") between the
Borrowers, and the Lender, and evidences Advances made by the Lender thereunder.
Terms used but not defined in this Note have the respective meanings assigned to
them in the Loan Agreement.
The Borrowers agree to pay all the Lender's costs of collection and
enforcement (including reasonable attorneys' fees and disbursements of Lender's
counsel) in respect of this Note when incurred, including, without limitation,
reasonable attorneys' fees through appellate proceedings.
Notwithstanding the pledge of the Collateral, each Borrower hereby
acknowledges, admits and agrees that the Borrowers' obligations under this Note
are recourse obligations of the Borrowers to which each Borrower pledges its
full faith and credit.
The Borrowers, and any indorsers or guarantors hereof, (a) severally
waive diligence, presentment, protest and demand and also notice of protest,
demand, dishonor and nonpayments of this Note, (b) expressly agree that this
Note, or any payment hereunder, may be extended from time to time, and consent
to the acceptance of further Collateral, the release of any Collateral for this
Note, the release of any party primarily or secondarily liable hereon, and (c)
expressly agree that it will not be necessary for the Lender, in order to
enforce payment of this Note, to first institute or exhaust the Lender's
remedies against the Borrowers or any other party liable hereon or against any
Collateral for this Note. No extension of time for the payment of this Note, or
any installment hereof, made by agreement by the Lender with any person now or
hereafter liable for the payment of this Note, shall affect the liability under
this Note of the Borrowers, even if the Borrowers are not a party to such
agreement; provided,
however, that the Lender and the Borrowers, by written agreement between them,
may affect the liability of the Borrowers.
Any reference herein to the Lender shall be deemed to include and
apply to every subsequent holder of this Note. Reference is made to the Loan
Agreement for provisions concerning optional and mandatory prepayments,
Collateral, acceleration and other material terms affecting this Note.
Each Borrower hereby acknowledges and agrees that the Borrowers will
each be jointly and severally liable to the Lender for all representations,
warranties, covenants and liabilities of any Borrower hereunder and under the
Loan Agreement.
Any enforcement action relating to this Note may be brought by motion
for summary judgment in lieu of a complaint pursuant to Section 3213 of the New
York Civil Practice Law and Rules. The Borrowers hereby submit to New York
jurisdiction with respect to any action brought with respect to this Note and
waives any right with respect to the doctrine of forum non conveniens with
respect to such transactions.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE BUT WITH
REFERENCE TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH BY
ITS TERMS APPLIES TO THIS NOTE) WHOSE LAWS THE BORROWERS EXPRESSLY ELECT TO
APPLY TO THIS NOTE. THE BORROWERS AGREE THAT ANY ACTION OR PROCEEDING BROUGHT TO
ENFORCE OR ARISING OUT OF THIS NOTE MAY BE COMMENCED IN THE SUPREME COURT OF THE
STATE OF NEW YORK, BOROUGH OF MANHATTAN, OR IN XXX XXXXXXXX XXXXX XX XXX XXXXXX
XXXXXX FOR THE SOUTHERN DISTRICT OF NEW YORK.
MORTGAGEIT, INC.
By:
------------------------------------
Name:
Title:
MORTGAGEIT HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
-2-
SCHEDULE OF LOANS
This Note evidences Advances made under the within-described Loan
Agreement to the Borrower, on the dates, in the principal amounts and bearing
interest at the rates set forth below, and subject to the payments and
prepayments of principal set forth below:
Principal Amount Amount Paid Unpaid Principal Notation
Date Made of Loan or Prepaid Amount Made by
--------- ---------------- ----------- ---------------- --------
EXHIBIT B
FORM OF CUSTODIAL AGREEMENT
EXHIBIT C
[FORM OF OPINION OF COUNSEL TO THE BORROWER]
(date)
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Dear Sirs and Mesdames:
You have requested [our] [my] opinion, as counsel to MortgageIT, Inc.,
a ________ corporation, and MortgageIT Holdings, Inc., a ________ corporation,
(each a, "Borrower" and collectively, the "Borrowers"), with respect to certain
matters in connection with that certain Master Loan and Security Agreement,
dated as of February 15, 2005 (the "Loan and Security Agreement"), by and
between the Borrowers and Greenwich Capital Financial Products, Inc. (the
"Lender"), being executed contemporaneously with a Promissory Note dated
February 15, 2005 from the Borrowers to the Lender (the "Note"), a Custodial
Agreement, dated as of February 15, 2005 (the "Custodial Agreement"), by and
among the Borrowers, Deutsche Bank Trust Company Americas (the "Custodian"), and
the Lender. Capitalized terms not otherwise defined herein have the meanings set
forth in the Loan and Security Agreement.
[We] [I] have examined the following documents:
1. the Loan and Security Agreement;
2. the Note;
3. Custodial Agreement;
4. unfiled copies of the financing statements listed on Schedule 1
(collectively, the "Financing Statements") naming the Borrower as
Debtor and the Lender as Secured Party and describing the Collateral
(as defined in the Loan and Security Agreement) as to which security
interests may be perfected by filing under the Uniform Commercial Code
of the States listed on Schedule 1 (the "Filing Collateral"), which I
understand will be filed in the filing offices listed on Schedule 1
(the "Filing Offices");
5. the reports listed on Schedule 2 as to UCC financing statements
(collectively, the "UCC Search Report"); and
6. such other documents, records and papers as we have deemed necessary
and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I] have
relied upon the representations and warranties of the Borrowers contained in the
Loan and Security Agreement. [We] [I] have assumed the authenticity of all
documents submitted to me as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. Each Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the state of [state] and is qualified
to transact business in, duly licensed and is in good standing under,
the laws of each state in which any Mortgaged Property is located to
the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of each Mortgage Loan pursuant to the Loan and
Security Agreement.
2. Each Borrower has the corporate power to engage in the transactions
contemplated by the Loan and Security Agreement, the Note, and the
Custodial Agreement and all requisite corporate power, authority and
legal right to execute and deliver the Loan and Security Agreement,
the Note, and the Custodial Agreement and observe the terms and
conditions of such instruments. Each Borrower has all requisite
corporate power to borrow under the Loan and Security Agreement and to
grant a security interest in the Collateral pursuant to the Loan and
Security Agreement.
3. The execution, delivery and performance by each Borrower of the Loan
and Security Agreement, the Note, and the Custodial Agreement, and the
borrowings by the Borrower and the pledge of the Collateral under the
Loan and Security Agreement have been duly authorized by all necessary
corporate action on the part of such Borrower. Each of the Loan and
Security Agreement, the Note and the Custodial Agreement have been
executed and delivered by each Borrower and are legal, valid and
binding agreements enforceable in accordance with their respective
terms against such Borrower, subject to bankruptcy laws and other
similar laws of general application affecting rights of creditors and
subject to the application of the rules of equity, including those
respecting the availability of specific performance, none of which
will materially interfere with the realization of the benefits
provided thereunder or with the Lender's security interest in the
Mortgage Loans.
4. No consent, approval, authorization or order of, and no filing or
registration with, any court or governmental agency or regulatory body
is required on the part of either Borrower for the execution, delivery
or performance by such Borrower of the Advance and Security Agreement,
the Note and the Custodial Agreement or for the borrowings by such
Borrower under the Loan and Security Agreement or the granting of a
security interest to the Lender in the Collateral, pursuant to the
Loan and Security Agreement.
5. The execution, delivery and performance by each Borrower of, and the
consummation of the transactions contemplated by, the Loan and
Security Agreement, the Note and the Custodial Agreement do not and
will not (a) violate any provision of such Borrower's charter or
by-laws, (b) violate any applicable law, rule or regulation, (c)
violate any order, writ, injunction or decree of any court or
governmental authority or agency or any arbitral award applicable to
such Borrower of which I have knowledge (after due inquiry) or (d)
result in a breach of, constitute a default under, require any consent
under, or result in the acceleration or required prepayment of any
indebtedness pursuant to the terms of, any agreement or instrument of
which I have knowledge (after due inquiry) to which such Borrower is a
party or by which it is bound or to which it is subject, or (except
for the Liens created pursuant to the Loan and Security Agreement)
result in the creation or imposition of any Lien upon any Property of
such Borrower pursuant to the terms of any such agreement or
instrument.
6. There is no action, suit, proceeding or investigation pending or, to
the best of [our] [my] knowledge, threatened against either Borrower
which, in [our] [my] judgment, either in
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any one instance or in the aggregate, would be reasonably likely to
result in any material adverse change in the properties, business or
financial condition, or prospects of such Borrower or in any material
impairment of the right or ability of such Borrower to carry on its
business substantially as now conducted or in any material liability
on the part of such Borrower or which would draw into question the
validity of the Loan and Security Agreement, the Note, the Custodial
Agreement or the Mortgage Loans or of any action taken or to be taken
in connection with the transactions contemplated thereby, or which
would be reasonably likely to impair materially the ability of such
Borrower to perform under the terms of the Loan and Security
Agreement, the Note, the Custodial Agreement or the Mortgage Loans.
7. The Loan and Security Agreement is effective to create, in favor of
the Lender, a valid security interest under the Uniform Commercial
Code in all of the right, title and interest of the Borrowers in, to
and under the Collateral as collateral security for the payment of the
Secured Obligations (as defined in the Loan and Security Agreement),
except that (a) such security interests will continue in Collateral
after its sale, exchange or other disposition only to the extent
provided in Section 9-306 of the Uniform Commercial Code, (b) the
security interests in Collateral in which a Borrower acquires rights
after the commencement of a case under the Bankruptcy Code in respect
of the Borrower may be limited by Section 552 of the Bankruptcy Code.
8. When the Mortgage Notes are delivered to the Custodian, endorsed in
blank by a duly authorized officer of a Borrower, the security
interest referred to in paragraph 7 above in the Mortgage Notes will
constitute a fully perfected first priority security interest in all
right, title and interest of the Borrowers therein, in the Mortgage
Loan evidenced thereby and in the Borrowers' interest in the related
Mortgaged Property.
9. (a) Upon the filing of financing statements on Form UCC-1 naming the
Lender as "Secured Party" and a Borrower as "Debtor", and describing
the Collateral, in the jurisdictions and recording offices listed on
Schedule 1 attached hereto, the security interests referred to in
paragraph 8 above will constitute fully perfected security interests
under the Uniform Commercial Code in all right, title and interest of
such Borrower in, to and under such Collateral, which can be perfected
by filing under the Uniform Commercial Code.
(b) The UCC Search Report sets forth the proper filing offices and the
proper debtors necessary to identify those Persons who have on file in
the jurisdictions listed on Schedule 1 financing statements covering
the Filing Collateral as of the dates and times specified on Schedule
2. Except for the matters listed on Schedule 2, the UCC Search Report
identifies no Person who has filed in any Filing Office a financing
statement describing the Filing Collateral prior to the effective
dates of the UCC Search Report.
10. The Assignments of Mortgage are in recordable form, except for the
insertion of the name of the assignee, and upon the name of the
assignee being inserted, are acceptable for recording under the laws
of the state where each related Mortgaged Property is located.
11. Each Borrower is duly registered as a [____________] in each state in
which Mortgage Loans were originated to the extent such registration
is required by applicable law, and has obtained all other licenses and
governmental approvals in each jurisdiction to the extent that the
failure to obtain such licenses and approvals would render any
Mortgage
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Loan unenforceable or would materially and adversely affect the
ability of the Borrower to perform any of its obligations under, or
the enforceability of, the Loan Documents.
12. Assuming that all other elements necessary to render a Mortgage Loan
legal, valid, binding and enforceable were present in connection with
the execution, delivery and performance of each Mortgage Loan
(including completion of the entire Mortgage Loan fully, accurately
and in compliance with all applicable laws, rules and regulations) and
assuming further that no action was taken in connection with the
execution, delivery and performance of each Mortgage Loan (including
in connection with the sale of the related Mortgaged Property) that
would give rise to a defense to the legality, validity, binding effect
and enforceability of such Mortgage Loan, nothing in the forms of such
Mortgage Loans, as attached hereto as Exhibit A, would render such
Mortgage Loans other than legal, valid, binding and enforceable.
13. Assuming their validity, binding effect and enforceability in all
other respects (including completion of the entire Mortgage Loan
fully, accurately and in compliance with all applicable laws, rules
and regulations), the forms of Mortgage Loans attached hereto as
Exhibit A are in sufficient compliance with ________ law and Federal
consumer protection laws so as not to be rendered void or voidable at
the election of the Mortgagor thereunder.
Very truly yours,
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EXHIBIT D
FORM OF NOTICE OF BORROWING AND PLEDGE
[insert date]
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: ________________________
Notice of Borrowing and Pledge No.: __________________________
Ladies/Gentlemen:
Reference is made to the Master Loan and Security Agreement, dated as
of February 15, 2005 (the "Loan Agreement"; capitalized terms used but not
otherwise defined herein shall have the meaning given them in the Loan
Agreement), between MortgageIT, Inc. and MortgageIt Holdings, Inc.
(collectively, "Borrower") and Greenwich Capital Financial Products, Inc. (the
"Lender").
In accordance with Section 2.03(a) of the Loan Agreement, the
undersigned Borrower hereby requests that you, the Lender, make Advances to us
in connection with our delivery of Mortgage Loans on ____________________
[insert requested Funding Date, which in the case of Dry Loans must be at least
two (2) Business Days following the date of the request], in connection with
which we shall pledge to you as Collateral the Mortgage Loans (along with all
previous pledges defined as Eligible Mortgage Loans for such date) set forth on
the Mortgage Loan Schedule attached hereto.
The Borrower hereby certifies, as of such Funding Date, that:
(a) no Default or Event of Default has occurred and is continuing on
the date hereof nor will occur after giving effect to such Advance as a
result of such Advance;
(b) each of the representations and warranties made by the Borrower in
or pursuant to the Loan Documents is true and correct in all material
respects on and as of such date (in the case of the representations and
warranties in respect of Mortgage Loans, solely with respect to Mortgage
Loans being included the Borrowing Base on the Funding Date) as if made on
and as of the date hereof (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such
specific date);
(c) the Borrower is in compliance with all governmental licenses and
authorizations and is qualified to do business and is in good standing in
all required jurisdictions; and
(d) the Borrower has satisfied all conditions precedent in Section
5.02 of the Loan Agreement and all other requirements of the Loan
Agreement.
The undersigned duly authorized officer of Borrower further represents and
warrants that (1) the documents constituting the Custodial File (as defined in
the Custodial Agreement) with respect to the Mortgage Loans that are the subject
of the Advance requested herein and more specifically identified on the mortgage
loan schedule or computer readable magnetic transmission delivered to both the
Lender and the Custodian in connection herewith (the "Receipted Mortgage Loans")
[with respect to Dry Loans: have been or are hereby submitted] [with respect to
Wet Loans: shall be delivered, within _____ (__) days of the date of the
execution of this Notice of Borrowing and Pledge,] to Custodian and such
Required
Documents are to be held by the Custodian subject to Lender's first priority
security interest thereon, (2) all other documents related to such Receipted
Mortgage Loans (including, but not limited to, mortgages, insurance policies,
loan applications and appraisals) have been or will be created and held by
Borrower in trust for Lender, (3) all documents related to such Receipted
Mortgage Loans withdrawn from Custodian shall be held in trust by Borrower for
Lender, and Borrower will not attempt to pledge, hypothecate or otherwise
transfer such Receipted Mortgage Loans to any other party until the Advance to
which such Receipted Mortgage Loans are related has been paid in full by
Borrower and (4) Borrower has granted a first priority perfected security
interest in and lien on the Receipted Mortgage Loans.
Borrower hereby represents and warrants that (x) the Receipted Mortgage Loans
have an unpaid principal balance as of the date hereof of $__________ and (y)
the number of Receipted Mortgage Loans is ______.
Very truly yours,
By:
------------------------------------
Name:
Title:
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SCHEDULE I
TO NOTICE OF BORROWING AND PLEDGE
[MORTGAGE LOANS PROPOSED TO BE PLEDGED
TO LENDER ON FUNDING DATE]
[attach Mortgage Loan Schedule]
EXHIBIT E
UNDERWRITING GUIDELINES
[TO BE PROVIDED BY BORROWER]
EXHIBIT F
REQUIRED FIELDS FOR SERVICING TRANSMISSION
[TO BE PROVIDED BY LENDER]
EXHIBIT G
REQUIRED FIELDS FOR MORTGAGE LOAN DATA TRANSMISSION
[TO BE PROVIDED BY LENDER]
EXHIBIT H
FORM OF BORROWING BASE CERTIFICATE
[TO BE PROVIDED BY LENDER]
EXHIBIT I
FORM OF CONFIDENTIALITY
AGREEMENT
In connection with your consideration of a possible or actual acquisition
of a participating interest (the "Transaction") in an advance, or note of
Greenwich Capital Financial Products, Inc. ("Greenwich") pursuant to a Master
Loan and Security Agreement between Greenwich and MortgageIT, Inc. and
MortgageIT Holdings, Inc. (collectively, the "Borrower"") dated February 15,
2005, you have requested the right to review certain non-public information
regarding the Borrower that is in the possession of Greenwich. In consideration
of, and as a condition to, furnishing you with such information and any other
information (whether communicated in writing or communicated orally) delivered
to you by Greenwich or its affiliates, directors, officers, employees, advisors,
agents or "controlling persons" (within the meaning of the Securities Exchange
Act of 1934, as amended (the "1934 Act")) (such affiliates and other persons
being herein referred to collectively as Greenwich "Representatives") in
connection with the consideration of a Transaction (such information being
herein referred to as "Evaluation Material"), Greenwich hereby requests your
agreement as follows:
1. The Evaluation Material will be used solely for the purpose of
evaluating a possible Transaction with Greenwich involving you or your
affiliates, and unless and until you have completed such Transaction
pursuant to a definitive agreement between you or any such affiliate
and Greenwich, such Evaluation Material will be kept strictly
confidential by you and your affiliates, directors, officers,
employees, advisors, agents or controlling persons (such affiliates
and other persons being herein referred to collectively as "your
Representatives"), except that the Evaluation Material or portions
thereof may be disclosed to those of your Representatives who need to
know such information for the purpose of evaluating a possible
Transaction with Greenwich (it being understood that prior to such
disclosure your Representatives will be informed of the confidential
nature of the Evaluation Material and shall agree to be bound by this
Agreement). You agree to be responsible for any breach of this
Agreement by your Representatives.
2. The term "Evaluation Material" does not include any information which
(i) at the time of disclosure or thereafter is generally known by the
public (other than as a result of its disclosure by you or your
Representatives) or (ii) was or becomes available to you on a
nonconfidential basis from a person not otherwise bound by a
confidential agreement with Greenwich or its Representatives or is not
otherwise prohibited from transmitting the information to you. As used
in this Agreement, the term "person" shall be broadly interpreted to
include, without limitation, any corporation, company, joint venture,
partnership or individual.
3. In the event that you receive a request to disclose all or any part of
the information contained in the Evaluation Material under the terms
of a valid and effective subpoena or order issued by a court of
competent jurisdiction, you agree to (i) immediately notify Greenwich
and the Borrower of the existence, terms and circumstances surrounding
such a request, (ii) consult with the Borrower on the advisability of
taking legally available steps to resist or narrow such request, and
(iii) if disclosure of such information is required, exercise your
best efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to such information.
4. Unless otherwise required by law in the opinion of your counsel,
neither you nor your Representative will, without our prior written
consent, disclose to any person the fact that the Evaluation Material
has been made available to you.
5. You agree not to initiate or maintain contact (except for those
contacts made in the ordinary course of business) with any officer,
director or employee of the Borrower regarding the business,
operations, prospects or finances of the Borrower or the employment of
such officer, director or employee, except with the express written
permission of the Borrower.
6. You understand and acknowledge that the Borrower is not making any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material or any other information
provided to you by Greenwich. The Borrower, its respective affiliates
or Representatives, nor any of its respective officers, directors,
employees, agents or controlling persons (within the meaning of the
0000 Xxx) shall have any liability to you or any other person
(including, without limitation, any of your Representatives) resulting
from your use of the Evaluation Material.
7. You agree that neither Greenwich or the Borrower has not granted you
any license, copyright, or similar right with respect to any of the
Evaluation Material or any other information provided to you by
Greenwich.
8. If you determine that you do not wish to proceed with the Transaction,
you will promptly deliver to Greenwich all of the Evaluation Material,
including all copies and reproductions thereof in your possession or
in the possession of any of your Representatives.
9. Without prejudice to the rights and remedies otherwise available to
the Borrower, the Borrower shall be entitled to equitable relief by
way of injunction if you or any of your Representatives breach or
threaten to breach any of the provisions of this Agreement. You agree
to waive, and to cause your Representatives to waive, any requirement
for the securing or posting of any bond in connection with such
remedy.
10. The validity and interpretation of this Agreement shall be governed
by, and construed and enforced in accordance with, the laws of the
State of New York applicable to agreements made and to be fully
performed therein (excluding the conflicts of law rules). You submit
to the jurisdiction of any court of the State of New York or the
United States District Court for the Southern District of the State of
New York for the purpose of any suit, action, or other proceeding
arising out of this Agreement.
11. The benefits of this Agreement shall inure to the respective
successors and assigns of the parties hereto, and the obligations and
liabilities assumed in this Agreement by the parties hereto shall be
binding upon the respective successors and assigns.
12. If it is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) that any term or
provision hereof is invalid or unenforceable, (i) the remaining terms
and provisions hereof shall be unimpaired and shall remain in full
force and effect and (ii) the invalid or unenforceable provision or
term shall be replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of such
invalid or unenforceable term or provision.
-2-
13. This Agreement embodies the entire agreement and understanding of the
parties hereto and supersedes any and all prior agreements,
arrangements and understandings relating to the matters provided for
herein. No alteration, waiver, amendments, or change or supplement
hereto shall be binding or effective unless the same is set forth in
writing by a duly authorized representative of each party and may be
modified or waived only by a separate letter executed by the Borrower
and you expressly so modifying or waiving such Agreement.
14. For the convenience of the parties, any number of counterparts of this
Agreement may be executed by the parties hereto. Each such counterpart
shall be, and shall be deemed to be, an original instrument, but all
such counterparts taken together shall constitute one and the same
Agreement.
-3-
Kindly execute and return one copy of this letter which will constitute our
Agreement with respect to the subject matter of this letter.
By:
----------------------------------------------------
Greenwich Capital Financial Products, Inc.
Confirmed and agreed to
this _____ day of
_____________, 200_.
By:
------------------------------------
Name:
Title:
EXHIBIT J
FORM OF INSTRUCTION LETTER
__________ __, 2005
___________________, as [Subservicer]
___________________
___________________
Attention: _______________
Re: Loan and Security Agreement, dated as of February 15, 2005,
by and between Greenwich Capital Financial Products, Inc.,
("Lender"), and MortgageIT, Inc. and MortgageIt Holdings,
Inc. (collectively, "Borrower")
Ladies and Gentlemen:
Pursuant to the Master Loan and Security Agreement, dated as of
February 15, 2005 (the "Loan and Security Agreement"), between the Lender and
the Borrower, you are hereby notified that: (i) the undersigned Borrower has
pledged to the Lender the assets described on Schedule 1 hereto (the "Eligible
Assets"), (ii) each of the Eligible Assets is subject to a security interest in
favor of the Lender, and (iii) effective as of the delivery of this letter to
the Subservicer, unless otherwise notified by the Lender in writing, any
payments or distributions made with respect to such Eligible Assets shall be
remitted immediately by the [Subservicer] in accordance with the Lender's wiring
instructions provided below:
Account No.: [____________________]
ABA No.: [____________________]
[____________________]
Reference: [____________________]
The Subservicer also acknowledges its consent to terminate such
Servicing Agreement upon notification by the Lender of an occurrence of an Event
of Default.
Please acknowledge receipt of this instruction letter by signing in
the signature block below and forwarding an executed copy to the Lender promptly
upon receipt. Any notices to the Lender should be delivered to the following
address: 000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Xxx
Xxxxxxxxxx, Telephone: (000) 000-0000, Facsimile: (000) 000-0000.
Very truly yours,
[BORROWER]
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED:
, as [Subservicer]
-----------------------------------
By:
-------------------------------
Name:
Title:
Telephone:
Facsimile: