Exhibit 99.2
MASTER REPURCHASE AGREEMENT
Dated as of May 13, 2002
BETWEEN:
Bank of America, N.A., as buyer ("Buyer", which term shall include any
"Principal" as defined and provided for in Annex I), or as agent pursuant hereto
("Agent"), and
New Century Funding A, as seller ("Seller").
1. APPLICABILITY
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Buyer shall, from time to time, upon the terms and conditions set forth
herein, agree to enter into transactions in which Seller transfers to
Buyer Eligible Assets against the transfer of funds by Buyer, with a
simultaneous agreement by Buyer to transfer to Seller such Purchased
Assets at a date certain, against the transfer of funds by Seller. Each
such transaction shall be referred to herein as a "Transaction", and,
unless otherwise agreed in writing, shall be governed by this
Agreement.
2. DEFINITIONS AND INTERPRETATION
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a. Defined Terms.
"Additional Purchased Assets" shall have the meaning assigned thereto
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in Section 6(a) hereof.
"Adjusted Tangible Net Worth" means shall mean at any date:
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(a) Book Net Worth, minus
(b) The sum of (1) all assets which would be classified as
intangible assets of a Guarantor and its consolidated Subsidiaries
under GAAP, including, without limitation, advances to shareholders,
officers and Affiliates, investments in Affiliates, deferred taxes,
capitalized general and administrative costs, capitalized deal costs,
all goodwill (whether representing the excess cost over book value of
assets acquired or otherwise), patents, trademarks, trade names,
copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs
and research and product development costs) plus (2) all receivables
from directors, officers and shareholders of such Guarantor and its
consolidated Subsidiaries.
"Affiliate" means, with respect to any specified Person, any other
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Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" means the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting equity, by contract or otherwise.
"Agent" means Bank of America, N.A. or any successor.
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"Agreement" means this Master Repurchase Agreement, as it may be
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amended, supplemented or otherwise modified from time to time.
"Book Net Worth" shall mean the excess of total assets of a Person and
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its consolidated Subsidiaries over Total Liabilities of such Guarantor and its
consolidated Subsidiaries determined in accordance with GAAP.
"Borrower" means the obligor or obligors on a Note, including any
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Person that has acquired the related collateral and assumed the obligations of
the original obligor or obligors under the Note.
"Breakage Costs" shall have the meaning assigned thereto in Section
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3(c) herein.
"Business Day" means any day other than (i) a Saturday or Sunday or
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(ii) a day upon which the New York Stock Exchange, the Federal Reserve Bank of
New York or the Custodian is obligated by law or executive order to be closed.
"Buyer's Margin Amount" means, with respect to any Transaction as of
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any date of determination, the amount obtained by application of Buyer's Margin
Percentage to the Repurchase Price for such Transaction as of such date.
"Buyer's Margin Percentage" shall have the meaning assigned thereto in
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the Side Letter.
"Cash Equivalents" shall mean (a) securities with maturities of 180
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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 180 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 thirty 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 & Poor's Ratings Services ("S&P") or "P-1" or
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the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") and in
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either case maturing within 180 days after the day of acquisition, (e)
securities with maturities of 180 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 180 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 in Control" shall mean the acquisition by any Person, or two or
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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 an entity at any time if after giving
effect to such acquisition such Person or Persons owns fifty percent (50%) or
more of such outstanding voting stock.
"Change in Law" means (a) the adoption of any law, rule or regulation
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after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by Buyer (or any Affiliate of
Buyer) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Collateral" shall have the meaning assigned thereto in Section 8
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hereof.
"Computer Medium" means a computer or other electronic medium generated
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by or on behalf of Seller and delivered or transmitted to Buyer and Custodian
which provides information relating to the Purchased Assets, including the
identity of the related servicer with respect to each Loan and the information
set forth in the Loan Schedule, in a format reasonably acceptable to Buyer.
"Confirmation" shall have the meaning assigned thereto in Section 4(b)
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hereof.
"Custodian" means Deutsche Bank National Trust Company, or its
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successors and permitted assigns.
"Custody Agreement" means the Custodial Agreement, dated as of May 13,
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2002 among Seller, Buyer, NCMC and Custodian.
"Default" means any event, that, with the giving of notice or the
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passage of time or both, would constitute an Event of Default.
"Default Rate" means, as of any date of determination, the lesser of
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(i) the Pricing Rate plus 4% and (ii) the maximum rate permitted by applicable
law.
"Effective Date" shall mean the date set forth on the top of the first
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page of this Agreement.
"Eligible Asset" shall have the meaning assigned thereto in the Side
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Letter.
"Eligible Loan" shall have the meaning assigned thereto in the Side
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Letter.
"Event of Default" shall have the meaning assigned thereto in Section
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18 hereof.
"Facility Enlargement Fee Amount" shall have the meaning assigned
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thereto in the Side Letter.
"Facility Fee Amount" shall have the meaning assigned thereto in the
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Side Letter.
"Funded Debt" shall mean as of any date of determination with respect
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to NCFC (and its subsidiaries) amounts outstanding to third parties such as, but
not limited to, warehouse lines of credit and repurchase lines, notes payable,
securitizations held on balance sheet, subordinated debt and financing of
residuals, but excluding accounts and similar payables and accrued liabilities.
"GAAP" shall mean generally accepted accounting principles in the
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United States of America in effect from time to time.
"Governmental Authority" shall mean any nation or government, any state
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or other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions over Seller or
Guarantor.
"Guarantee" means, as to any Person, any obligation of such Person
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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.
"Guarantors" means each of NCFC and NCMC, or any successors thereto.
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"Guaranty" means the Guaranty and Pledge Agreement of the Guarantors in
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favor of the Buyer, dated as of May 13, 2002.
"Hedge Counterparty": A Person (i) (A) with long-term and commercial
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paper or short-term deposit ratings of "P-1" by ▇▇▇▇▇'▇ Investors Service and
"A-1" by Standard & Poor's and (B) which shall agree in writing that, in the
event that any of its long-term or commercial paper or short-term deposit
ratings cease to be at or above "A-2" by Moody's and "A" by Standard & Poor's,
it shall secure its obligations in accordance with the request of the Buyer or
Buyer shall have the option to treat such failure as an Early Termination Event
(as defined in the ISDA Master Agreement) by such Hedge Counterparty, and (ii)
that has entered into a Hedge Instrument.
"Hedge Instrument" means any interest rate cap agreement, interest rate
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floor agreement, interest rate swap agreement or other interest rate hedging
agreement entered into by the Seller or a Guarantor with a Hedge Counterparty
that relates to or applies to the Purchased Assets or assets similar to the
Purchased Assets.
"Income" means, with respect to any Purchased Asset at any time, any
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principal and/or interest thereon and all dividends, sale proceeds and other
collections and distributions thereon, but not including any commitment fees,
origination fees and/or servicing fees (with respect to third party servicers
that are not an Affiliate of Seller or any Guarantor).
"Indebtedness" shall mean, for any Person: (a) all obligations for
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borrowed money; (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 and paid within ninety (90) days of the date the related invoice is
received for the respective goods delivered or the respective services 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 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 on a recourse basis 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 contingent liabilities of such Person.
"Interest Coverage Ratio" shall mean with respect to NCFC (and its
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subsidiaries) as of the end of each financial quarter and measured with respect
to such financial quarter and the immediately preceding 3 quarters, an amount
equal to fraction (expressed as a decimal) as follows:
(a) the numerator of which is the sum of (i) the aggregate
earnings before interest and taxes, plus (ii) the aggregate of all
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interest expenses, minus (iii) the aggregate of all gains on
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net-interest residuals, minus (iv) the aggregate of all servicing
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gains, plus (v) the aggregate of all depreciation and amortization,
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minus (vi) the aggregate of all initial deposits into
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over-collateralization accounts, minus (vii) the aggregate accretion of
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net-interest residuals, plus (viii) the aggregate of all cash received
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with respect to residual interests; and
(a) the denominator of which is the sum of (i) the aggregate
of all interest expense, plus (ii) the aggregate of all mandatory
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repayments of residual secured financings.
"Interim Servicer" means (i) Ocwen Federal Bank, FSB, or (ii) any other
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servicer approved by Buyer in its sole discretion exercised in good faith.
"Investment Company Act" means the Investment Company Act of 1940, as
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amended, including all rules and regulations promulgated thereunder.
"Jumbo Loan" means a Loan with an original unpaid principal balance
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greater than $350,000.
"LIBOR" shall mean, for each day, the rate determined by the Buyer on
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such date (or, in the event such day is not a Business Day, the prior Business
Day) on the basis of the offered rate for one-month or overnight U.S. dollar
deposits (as applicable), as such rate appears on Telerate Page 3750 as of 11:00
a.m. (London time) on such date; provided that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the offered rates of the Reference Banks for one-month or overnight U.S. dollar
deposits (as applicable), as of 11:00 a.m. (London time) on such date. In such
event, the Buyer will request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If on such date, two or more
Reference Banks provide such offered quotations, LIBOR shall be the arithmetic
mean of all such offered quotations (rounded to the nearest whole multiple of
1/16%).
If on such date, fewer than two Reference Banks provide such offered quotations,
LIBOR shall be the higher of (i) LIBOR as determined on the previous LIBOR
determination date and (ii) the Reserve Interest Rate. With respect to each
transaction, on the related Purchase Date and for each day that such Transaction
is outstanding, LIBOR shall be calculated at the overnight rate unless otherwise
elected by the Seller in writing on the related Purchase Date.
"Liquid Assets" shall mean the sum of all of NCMC's cash, Cash
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Equivalents, and the market value of its U.S. Treasury securities and the amount
available under any committed secured financing facility or committed repurchase
facility between NCMC and a third party acceptable to the Buyer (but only to the
extent that NCMC has unencumbered assets to pledge, net of any applicable
haircut, or has excess borrowing capacity arising from assets already pledged).
"Loan" means (i) a first or second lien single family (one-to-four
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units) non-conforming residential loan, (ii) such other type of loan, lease or
other receivable as shall be agreed upon by the parties as evidenced by Appendix
A to the Custody Agreement, as amended or supplemented by mutual agreement of
the parties, or (iii) any interest in, or secured by, any such loan, lease or
other receivable.
"Loan Documents" shall have the meaning assigned thereto in the Custody
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Agreement.
"Loan File" shall have the meaning assigned thereto in the Custody
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Agreement.
"Loan Schedule" means the list of Loans delivered by a Guarantor or the
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Seller to Buyer and Custodian together with each Transaction Notice and attached
by the Custodian to the related Trust Receipt. Each Loan Schedule shall set
forth as to each Loan the related Borrower name, the address of the related
Mortgaged Property and the outstanding principal balance of the Loan as of the
initial Purchase Date, together with any other information specified by Buyer
from time to time in good faith.
"Margin Call" As defined in Section 6(a).
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"Margin Deficit" shall have the meaning assigned thereto in Section
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6(a) hereof.
"Market Value" means (i) with respect to any Purchased Asset that is an
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Eligible Asset, as of any date of determination, the value ascribed to such
asset by Buyer in its sole discretion, and (ii) with respect to a Purchased
Asset that is not an Eligible Asset, zero.
"Master Contribution Agreement" means the Master Contribution
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Agreement, dated as of May 13, 2002 between NCMC and Seller.
"Master Netting Agreement" means the Master Collateral Security and
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Master Netting Agreement dated as of May 13, 2002 among Buyer and certain
Affiliates and the Guarantors and certain Affiliates.
"Material Adverse Change" means, with respect to a Person, any material
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adverse change in the business, condition (financial or otherwise), operations,
performance, properties or prospects taken as a whole or prospects of such
Person.
"Material Adverse Effect" means (a) a Material Adverse Change with
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respect to a Guarantor or such Guarantor and its Affiliates that are party to
any Program Document taken as a whole; (b) a material impairment of the ability
of a Guarantor or any Affiliate that is a party to any Program Document to
perform under any Program Document and to avoid any Event of Default; (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability of any Program Document against either Guarantor or any Affiliate
that is a party to any Program Document; or (d) a material adverse effect upon
the value or marketability of a material portion of the Purchased Assets.
"Maximum Aggregate Purchase Price" means the amount set forth in
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Section 37 hereof.
"Mortgage" means a mortgage, deed of trust, or other instrument that
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creates a lien on the related Mortgaged Property and secures a Note.
"Mortgaged Property" means, with respect to a Loan, the related
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Borrower's fee interest in real property or leasehold interest in real property
and all other collateral securing repayment of the debt evidenced by the related
Note.
"NCFC" means New Century Financial Corporation, or any successor
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thereto.
"NCMC" means New Century Mortgage Corporation, or any successor
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thereto.
"Note" means, with respect to any Loan, the related promissory note
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together with all riders thereto and amendments thereof or other evidence of
indebtedness of the related Borrower.
"Notice Date" shall have the meaning assigned thereto in Section 4
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hereof.
"Obligations" means (a) all of Seller's and Guarantors' obligation to
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pay the Repurchase Price on the Repurchase Date and other obligations and
liabilities of Seller and Guarantors to Buyer, its Affiliates or Custodian
arising under, or in connection with, the Program Documents or directly related
to the Purchased Assets, whether now existing or hereafter arising; (b) any and
all sums paid by Buyer or on behalf of Buyer pursuant to the Program Documents
in order to preserve any Purchased Asset or its interest therein; (c) in the
event of any proceeding for the collection or enforcement of any of Seller's or
Guarantors' indebtedness, obligations or liabilities referred to in clause (a),
the reasonable expenses of retaking, holding, collecting, preparing for sale,
selling or otherwise disposing of or realizing on any Purchased Asset, or of any
exercise by Buyer or such Affiliate of its rights under the Program Documents,
including without limitation, reasonable attorneys' fees and disbursements and
court costs; and (d) all of Seller's and Guarantor's obligations to Buyer,
Custodian or any other Person pursuant to the Program Documents.
"Person" shall mean any legal person, including any individual,
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corporation, partnership, association, joint-stock company, trust, limited
liability company, unincorporated organization, governmental entity or other
entity of similar nature.
"Price Differential" means, with respect to each Transaction as of any
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date, the aggregate amount obtained by daily application of the Pricing Rate for
such Transaction to the Purchase Price on a 360-day-per-year basis for the
actual number of days during the period commencing on (and including) the
Purchase Date and ending on (but excluding) the Repurchase Date (reduced by any
amount of such Price Differential in respect of such period previously paid by
Seller to Buyer) with respect to such Transaction.
"Pricing Rate" means the per annum percentage rate for determination of
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the Price Differential as set forth in Section 3(b) hereof or as otherwise set
forth in the Side Letter.
"Prime Rate" means a rate set by Buyer based upon various factors
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including Buyer's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in such rate
announced by Buyer shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Principal" shall have the meaning given to it in Annex I.
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"Program Documents" means this Agreement, the Custody Agreement, any
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Servicing Agreement, the Master Netting Agreement, the Guaranty, any assignment
of Hedge Instrument, the Master Contribution Agreement, the Side Letter, the
Servicer Side Letter and any other agreement entered into by Seller and/or
Guarantor, on the one hand, and Buyer or one of its Affiliates (or Custodian on
its behalf) on the other, in connection herewith or therewith.
"Property" means any right or interest in or to property of any kind
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whatsoever, whether real, personal or mixed and whether tangible or intangible.
"Purchase Date" means the date on which Purchased Assets are to be
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transferred by Seller to Buyer.
"Purchase Price" shall have the meaning assigned thereto in the Side
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Letter.
"Purchased Assets" means, with respect to a Transaction, the Loans set
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forth on the related Loan Schedule, together with the related Records, Servicing
Rights, Seller's or Guarantor's rights under any related Hedge Instruments
(which interest in Hedge Instruments shall be pro rata and subject to rights of
other parties holding security interest therein), and other Collateral, and all
instruments, chattel paper, and general intangibles comprising or relating to
all of the foregoing. The term "Purchased Assets" with respect to any
Transaction at any time also shall include Additional Purchased Assets delivered
pursuant to Section 6(a) hereof.
"Records" means all instruments, agreements and other books, records,
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reports and data generated by other media for the storage of information
maintained by Seller, Guarantor, any of their Affiliates or agents, or their
servicer or custodian with respect to a Purchased Asset.
Records shall include the Notes, any Mortgages, the Loan Files and any other
instruments necessary to document or service a Loan that is a Purchased Asset,
including, without limitation, the complete payment and modification history of
each Loan that is a Purchased Asset.
"Reference Banks" Any leading banks selected by the Agent which are
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engaged in transactions in Eurodollar deposits in the international Eurocurrency
market with an established place of business in London.
"Repurchase Date" shall have the meaning assigned thereto in Section
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3(b) and shall also include the date determined by application of Section 19.
"Repurchase Price" means the price at which Purchased Assets are to be
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transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the Purchase Price and the Price Differential as of the date of such
determination.
"Reserve Interest Rate" means with respect to any LIBOR determination
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date, the rate per annum that the Agent determines to be either (i) the
arithmetic mean (rounded to the nearest whole multiple of 1/16%) of the
one-month or overnight U.S. dollar lending rates (as applicable) which New York
City banks selected by the Agent are quoting on the relevant LIBOR determination
date to the principal London offices of leading banks in the London interbank
market or (ii) in the event that the Agent can determine no such arithmetic
mean, the lowest one-month or overnight U.S. dollar lending rate (as applicable)
which New York City banks selected by the Agent are quoting on such LIBOR
determination date to leading European banks.
"Servicer Side Letter" means the letter agreement, dated as of May 13,
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2002, among Seller, Guarantors, Ocwen Federal Bank, FSB and Buyer.
"Servicing Agreement" means any agreement (other than the Custody
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Agreement) giving rise or relating to Servicing Rights with respect to a
Purchased Asset, including any assignment or other agreement relating to such
agreement.
"Servicing Rights" means contractual, possessory or other rights of
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Seller or any other Person arising under a Servicing Agreement, the Custody
Agreement or otherwise, to administer or service a Purchased Asset or to possess
related Records.
"Side Letter" means the pricing side letter, dated as of May 13, 2002,
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among Seller, Guarantors and Buyer, as the same may be amended, supplemented or
modified from time to time.
"Subsidiary" means, with respect to any Person, any corporation,
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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.
"Substitute Assets" has the meaning assigned thereto in Section 16(a).
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"Termination Date" has the meaning assigned thereto in Section 27.
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"Total Adjusted Liabilities" shall mean for any fiscal quarter, the sum
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of (i) the daily average funded indebtedness for such fiscal quarter, plus (ii)
all other consolidated liabilities, determined in accordance with GAAP, as of
the last day of such fiscal quarter.
"Total Liabilities" shall mean the total liabilities of a Person and
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its consolidated Subsidiaries, determined in accordance with GAAP.
"Total Non-warehouse Debt" shall mean as of any date of determination
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with respect to NCFC (and its subsidiaries), the sum of (i) the aggregate of all
of its Funded Debt, less (ii) 100% of its unencumbered mortgage loan inventory
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held for sale or held for investment, less, (iii) 80% of its aggregate servicing
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advance receivables (all determined in accordance with GAAP).
"Transaction" has the meaning assigned thereto in Section 1.
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"Transaction Notice" means a written request of Seller to enter into a
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Transaction, in the form attached to the Custody Agreement which is delivered to
Buyer and Custodian.
"Trust Receipt" means a Trust Receipt and Certification as defined in
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the Custody Agreement.
"Underwriting Guidelines" means NCMC's underwriting guidelines in
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effect as of the date of this Agreement, which have been approved in writing by
Buyer, as the same may be amended from time to time in accordance with terms of
this Agreement.
"Uniform Commercial Code" means the Uniform Commercial Code as in
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effect on the date hereof in the State of New York or the Uniform Commercial
Code as in effect in the applicable jurisdiction.
"Wet Funded Loan" means a Loan for which, as of the related initial
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Purchase Date, the documents in the related Loan File has not been delivered to
the Custodian, and thereafter, each date until the documents in the related Loan
File has been delivered to the Custodian.
"Wet Funding Package" shall have the meaning assigned thereto in the
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Custody Agreement.
b. Capitalized terms used but not defined in this Agreement shall have
the meanings assigned thereto in the Custody Agreement.
c. Interpretation.
Headings are for convenience only and do not affect interpretation. The
following rules of this subsection (c) apply unless the context requires
otherwise. The singular includes the plural and conversely. A gender includes
all genders. Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit
is, unless otherwise specified, a reference to a Section of, or annex or exhibit
to, this Agreement. A reference to a party to this Agreement or another
agreement or document includes the party's successors and permitted substitutes
or assigns. A reference to an agreement or document is to the agreement or
document as amended, modified, novated, supplemented or replaced, except to the
extent prohibited by any Program Document. A reference to legislation or to a
provision of legislation includes a modification or re-enactment of it, a
legislative provision substituted for it and a regulation or statutory
instrument issued under it. A reference to writing includes a facsimile
transmission and any means of reproducing words in a tangible and permanently
visible form. A reference to conduct includes, without limitation, an omission,
statement or undertaking, whether or not in writing. An Event of Default
subsists until it has been waived in writing by the Buyer or has been timely
cured. The words "hereof", "herein", "hereunder" and similar words refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
term "including" is not limiting and means "including without limitation." In
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including", the words "to" and "until"
each mean "to but excluding", and the word "through" means "to and including."
This Agreement may use several different limitations, tests or measurements to
regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with their
terms. Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied. References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Seller. Except where otherwise provided in
this Agreement any determination, statement or certificate by the Buyer or an
authorized officer of the Buyer provided for in this Agreement is conclusive and
binds the parties in the absence of manifest error. A reference to an agreement
includes a security interest, guarantee, agreement or legally enforceable
arrangement whether or not in writing related to such agreement. A reference to
a document includes an agreement (as so defined) in writing or a certificate,
notice, instrument or document, or any information recorded in computer disk
form. Where the Seller or a Guarantor is required to provide any document to the
Buyer under the terms of this Agreement, the relevant document shall be provided
in writing or printed form unless the Buyer requests otherwise. At the request
of the Buyer, the document shall be provided in computer readable format or both
printed and computer readable format. This Agreement is the result of
negotiations among and has been reviewed by counsel to the Buyer, Guarantors and
the Seller, and is the product of all parties. In the interpretation of this
Agreement, no rule of construction shall apply to disadvantage one party on the
ground that such party proposed or was involved in the preparation of any
particular provision of this Agreement or this Agreement itself. Except where
otherwise expressly stated the Buyer may give or withhold, or give
conditionally, approvals and consents, may be satisfied or unsatisfied, and may
form opinions and make determinations at its absolute discretion. Any
requirement of good faith, discretion or judgment by the Buyer shall not be
construed to require Buyer to request or await receipt of information or
documentation not immediately available from or with respect to the Seller,
Guarantor, a servicer of the Purchased Assets, any other Person or the Purchased
Assets themselves.
3. THE TRANSACTIONS
----------------
a. Seller shall repurchase Purchased Assets from Buyer on each related
Repurchase Date. Each obligation to repurchase subsists without regard to any
prior or intervening liquidation or foreclosure with respect to any Purchased
Asset. Seller is obligated to obtain the Purchased Assets from Buyer or its
designee (including the Custodian) at Seller's expense on (or after) the related
Repurchase Date.
b. Provided that the applicable conditions in Sections 9(a) and (b)
have been satisfied, each Purchased Asset that is repurchased by Seller on the
Repurchase Date occurring on the 25th day of each month (or, if such 25th day is
not a Business Day, the immediately following Business Day) following the
related Purchase Date (the day of the month so determined for each month, or any
other date designated by Seller to Buyer for such a repurchase on at least one
Business Day's prior notice to Buyer, a "Repurchase Date", which term shall also
include the date determined by application of Section 19) shall automatically
become subject to a new Transaction unless Buyer is notified by Seller at least
one (1) Business Day prior to any such Repurchase Date, provided that if the
Repurchase Date so determined is later than the Termination Date, the Repurchase
Date for such Transaction shall automatically reset to the Termination Date, and
the provisions of this sentence as it might relate to a new Transaction shall
expire on such date. For each new Transaction, unless otherwise agreed, (y) the
accrued and unpaid Price Differential shall be settled in cash on each related
Repurchase Date, and (z) the Pricing Rate shall be as set forth in the Side
Letter.
c. If Buyer locks in the rate of LIBOR at the request of Seller and
Seller repurchases Purchased Assets on any day which is not the Repurchase Date
set forth in Section 3(b) above, Seller shall indemnify Buyer and hold Buyer
harmless from any losses, costs and/or expenses which Buyer may sustain or incur
arising from the reemployment of funds obtained by Buyer hereunder or from fees
payable to terminate the deposits from which such funds were obtained ("Breakage
Costs"), in each case for the remainder of the applicable 30 day period. Buyer
shall deliver to Seller a statement setting forth the amount and basis of
determination of any Breakage Costs in such detail as determined in good faith
by Buyer to be adequate, it being agreed that such statement and the method of
its calculation shall be adequate and shall be conclusive and binding upon
Seller, absent manifest error. This Section shall survive termination of this
Agreement and the repurchase of all Purchased Assets subject to Transactions
hereunder.
4. ENTERING INTO TRANSACTIONS, TRANSACTION NOTICE CONFIRMATIONS
------------------------------------------------------------
a. Under the terms and conditions of the Program Documents, Buyer
hereby agrees to enter into Transactions with a Purchase Price up to the Maximum
Aggregate Purchase Price. Unless otherwise agreed, Seller shall give Buyer and
Custodian notice of any proposed Purchase Date in accordance with the terms of
the Custody Agreement (the date on which such notice is so given, the "Notice
Date"). On the Notice Date, Seller or a Guarantor shall (i) request that Buyer
enter into a Transaction by furnishing to Buyer and Custodian a Transaction
Notice and Loan Schedule, (ii) deliver to Buyer a Computer Medium for the
related Purchased Assets and (iii) deliver to Custodian the Loan File or Wet
Funding Package for each Loan subject to such Transaction.
b. In the event that the parties hereto desire to enter into a Transaction
on terms other than as set forth in this Agreement (as amended by the Side
Letter), the parties shall execute a "Confirmation" specifying such terms prior
to entering into such Transaction. Any such Confirmation and the related
Transaction Notice, together with this Agreement, shall constitute conclusive
evidence of the terms agreed between Buyer and Seller with respect to the
Transaction to which the Confirmation relates. In the event of any conflict
between this Agreement and a Confirmation, the terms of the Confirmation shall
control with respect to the related Transaction.
5. PAYMENT AND TRANSFER
--------------------
Unless otherwise agreed, all transfers of funds hereunder shall be in
immediately available funds and all Purchased Assets transferred shall be
transferred to the Custodian pursuant to the Custody Agreement. Any Repurchase
Price or Price Differential received by Buyer after 2:30 p.m. noon New York City
time shall be applied on the next succeeding Business Day.
6. MARGIN MAINTENANCE
------------------
a. If at any time the aggregate Market Value of all Purchased Assets
subject to all Transactions is less than the aggregate Buyer's Margin Amount for
all such Transactions (a "Margin Deficit"), then Buyer may by notice to Seller
require Seller in such Transactions to transfer to Buyer cash or, at Buyer's
option (and provided Seller has additional Eligible Assets), additional Eligible
Assets ("Additional Purchased Assets"), so that the cash and aggregate Market
Value of the Purchased Assets, including any such Additional Purchased Assets,
will thereupon equal or exceed such aggregate Buyer's Margin Amount (such
requirement, a "Margin Call").
b. Notice required pursuant to Section 6(a) may be given by any means
provided in Section 35 hereof. Any notice given before 10:00 a.m. New York time
on a Business Day shall be satisfied no later than 5:00 p.m. New York time on
such Business Day. Any notice given on or after 10:00 a.m. New York time on a
Business Day shall be satisfied no later than 5:00 p.m. New York time on the
Business Day following the date of such notice. The failure of Buyer, on any one
or more occasions, to exercise its rights hereunder, shall not change or alter
the terms and conditions to which this Agreement is subject or limit the right
of Buyer to do so at a later date. Seller, Guarantors and Buyer each agree that
a failure or delay by Buyer to exercise its rights hereunder shall not limit or
waive Buyer's rights under this Agreement or otherwise existing by law or in any
way create additional rights for Seller or a Guarantor.
7. INCOME PAYMENTS
---------------
Where a particular term of a Transaction extends over the date on which
Income is paid in respect of any Purchased Assets subject to that Transaction,
such Income shall be the property of Buyer. Notwithstanding the foregoing, Buyer
agrees that prior to the occurrence of an Event of Default, Seller shall be
entitled to receive an amount equal to all Income received, whether by
Guarantor, Buyer, Custodian, Interim Servicer or any servicer or any other
Person, which is not
otherwise received by Seller, in respect of the Purchased Assets; provided,
however, that any income received by or on behalf of Seller while the related
Transaction is outstanding shall be deemed held by Seller solely in trust for
Buyer pending the repurchase on the related Repurchase Date. Upon the occurrence
of an Event of Default, the Seller and each Guarantor shall cause all Income to
be delivered to the Buyer.
8. SECURITY INTEREST
-----------------
Seller and Buyer intend that the Transactions hereunder be sales to Buyer
of the Purchased Assets and not loans from Buyer to Seller secured by the
Purchased Assets. However, in order to preserve Buyer's rights under this
Agreement in the event that a court or other forum recharacterizes the
Transactions hereunder as other than sales, and as security for Seller's
performance of all of its Obligations, Seller hereby grants Buyer a fully
perfected first priority security interest in the following property, whether
now existing or hereafter acquired: the Purchased Assets, the related Records,
all mortgage guaranties and insurance relating to such Purchased Assets (issued
by governmental agencies or otherwise) and any mortgage insurance certificate or
other document evidencing such mortgage guaranties or insurance relating to such
Purchased Assets and all claims and payments thereunder, any purchase agreements
or other agreements or contracts relating to or constituting any or all of the
foregoing, all "accounts" as defined in the Uniform Commercial Code relating to
or constituting any or all of the foregoing, all other insurance policies and
insurance proceeds relating to any Purchased Asset or the related Mortgaged
Property, any security account and all rights to Income and the rights to
enforce such payments arising from any of the Purchased Assets, and any and all
replacements, substitutions, distributions on or proceeds with respect to any of
the foregoing (collectively the "Collateral").
9. CONDITIONS PRECEDENT
--------------------
a. As conditions precedent to the initial Transaction, Buyer shall have
received on or before the day of such initial Transaction the following, in form
and substance satisfactory to Buyer and duly executed by each party thereto (as
applicable):
(i) The Program Documents duly executed and delivered by the parties
thereto and being in full force and effect, free of any modification,
breach or waiver;
(ii) Evidence that all other actions necessary or, in the opinion of
Buyer, desirable to perfect and protect Buyer's interest in the Purchased
Assets and other Collateral have been taken, including, without limitation,
duly executed and filed Uniform Commercial Code financing statements on
Form UCC-1;
(iii) A certified copy of Seller's and Guarantors' consents or
corporate resolutions, as applicable, approving the Program Documents and
Transactions thereunder (either specifically or by general resolution), and
all documents evidencing other necessary corporate action or governmental
approvals as may be required in connection with the Program Documents;
(iv) An incumbency certificate of the secretaries of Seller and
Guarantors certifying the names, true signatures and titles of Seller's and
Guarantors' representatives
duly authorized to request Transactions hereunder and to execute the
Program Documents and the other documents to be delivered thereunder;
(v) An opinion of Seller's and Guarantors' counsel as to such
matters as Buyer may reasonably request and in form and substance
acceptable to Buyer;
(vi) A copy of the Underwriting Guidelines certified by an officer
of NCMC;
(vii) The original trust certificate of NCMC, representing 100%
ownership of Seller, issued in the name of NCMC and an original conveyance
power in blank executed by NCMC;
(viii) All of the conditions precedent in the Guaranty shall have been
satisfied; and
(ix) Any other documents reasonably requested by Buyer.
(x) Buyer's legal, tax, business and environmental due diligence of
the Seller and Guarantors each shall have been completed to the
satisfaction of the Buyer.
b. The obligation of Buyer to enter into each Transaction pursuant to
this Agreement is subject to the following conditions precedent:
(i) Buyer or its designee shall have received on or before the day
of a Transaction with respect to such Purchased Assets (unless otherwise
specified in this Agreement) the following, in form and substance
satisfactory to Buyer and (if applicable) duly executed:
(A) Transaction Notice, Loan Schedule and Computer Medium delivered
pursuant to Section 4(a);
(B) The related Trust Receipt; and
(C) Such certificates, customary opinions of counsel or other
documents as Buyer may reasonably request, provided that such
opinions of counsel shall not be required in connection with
each Transaction but shall only be required from time to time
as deemed necessary by Buyer in its good faith.
(ii) No Default or Event of Default shall have occurred and be
continuing.
(iii) Buyer shall not have reasonably determined that a change in any
requirement of law or in the interpretation or administration of any
requirement of law applicable to Buyer has made it unlawful, and no
Governmental Authority shall have asserted that it is unlawful, for Buyer
to enter into Transactions with a Pricing Rate based on LIBOR.
(iv) All representations and warranties in the Program Documents
shall be true and correct on the date of such Transaction.
(v) The then aggregate outstanding Purchase Price for all Purchased
Assets, when added to the Purchase Price for the requested Transaction,
shall not exceed the Maximum Aggregate Purchase Price.
(vi) No event or events shall have been reasonably determined by
Buyer to have occurred and be continuing resulting in the effective absence
of a whole loan or asset-backed securities market.
(vii) Satisfaction of any conditions precedent to the initial
Transaction as set forth in clause (a) of this Section 9 that were not
satisfied prior to such initial Purchase Date.
(viii) The Purchase Price for the requested Transaction shall not be
less than $500,000.
(ix) Buyer shall have determined that all actions necessary or, in
the opinion of Buyer, desirable to maintain Buyer's perfected interest in
the Purchased Assets and other Collateral have been taken, including,
without limitation, duly executed and filed Uniform Commercial Code
financing statements on Form UCC-1.
(x) Any other documents reasonably requested by Buyer.
(xi) The Buyer shall not be obligated to enter into more than two
Transactions per Business Day.
10. RELEASE OF PURCHASED ASSETS
---------------------------
Upon timely payment in full of the Repurchase Price and all other
Obligations that relate to and are owed with respect to a Purchased Asset, if no
Default or Event of Default has occurred and is continuing, Buyer shall, and
shall direct Custodian to, release such Purchased Asset unless such release
would give rise to or perpetuate a Margin Deficit. Except as set forth in
Sections 6(a) and 16, Seller shall give at least one (1) Business Day's prior
written notice to Buyer if such repurchase shall occur on other than a
Repurchase Date set forth in Section 3(b).
If such a Margin Deficit is applicable, Buyer shall notify Seller of the
amount thereof and Seller may thereupon satisfy the Margin Call in the manner
specified in Section 6.
11. RELIANCE
--------
With respect to any Transaction, Buyer may conclusively rely upon, and
shall incur no liability to Seller or Guarantors in acting upon, any request or
other communication that Buyer reasonably believes to have been given or made by
a person authorized to enter into a Transaction on Seller's or a Guarantor's
behalf.
12. REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Seller and each Guarantor hereby represents and warrants, and
shall on and as of the Purchase Date for any Transaction and on and as of each
date thereafter through and including the related Repurchase Date be deemed to
represent and warrant, that:
a. Due Organization and Qualification. Each of the Seller and each
----------------------------------
Guarantor is duly organized, validly existing and in good standing under the
laws of the jurisdiction under whose laws it is organized. Each of the Seller
and each Guarantor is duly qualified to do business, is in good standing and has
obtained all necessary licenses, permits, charters, registrations and approvals
necessary for the conduct of its business as currently conducted and the
performance of its obligations under the Program Documents or any failure to
obtain such a license, permit, charter, registration or approval will not cause
a Material Adverse Effect or impair the enforceability of any Loan.
b. Power and Authority. Each of the Seller and each Guarantor has all
-------------------
necessary power and authority to conduct its business as currently conducted, to
execute, deliver and perform its obligations under the Program Documents and to
consummate the Transactions.
c. Due Authorization. The execution, delivery and performance of the
-----------------
Program Documents by each of the Seller and each Guarantor have been duly
authorized by all necessary action and do not require any additional approvals
or consents or other action by or any notice to or filing with any Person other
than any that have heretofore been obtained, given or made.
d. Noncontravention. None of the execution and delivery of the Program
----------------
Documents by Seller or either Guarantor or the consummation of the Transactions
and transactions thereunder:
i) conflicts with, breaches or violates any provision of any
material agreements of Seller or a Guarantor or in any material
respect any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award currently in effect having
applicability to Seller or either Guarantor or its properties;
ii) constitutes a material default by Seller or a Guarantor
under any loan or repurchase agreement, mortgage, indenture or other
agreement or instrument to which Seller or a Guarantor is a party or
by which it or any of its properties is or may be bound or affected;
or
iii) results in or requires the creation of any lien upon or in
respect of any of the assets of Seller or a Guarantor except the lien
relating to the Program Documents.
e. Legal Proceeding. Except as otherwise disclosed in the financial
----------------
statements of NCFC, there is no action, proceeding or investigation by or before
any court, governmental or administrative agency or arbitrator affecting any of
the Purchased Assets, Seller, a Guarantor or
any of their Affiliates, pending or threatened, which has a reasonable
likelihood of having a Material Adverse Effect.
f. Valid and Binding Obligations. Each of the Program Documents to which
-----------------------------
the Seller or a Guarantor is a party, when executed and delivered by such Seller
or Guarantor, will constitute the legal, valid and binding obligations of such
Seller or Guarantor, enforceable against such Seller or Guarantor, in accordance
with their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equitable principles.
g. Financial Statements. The financial statements of Guarantors, copies
--------------------
of which have been furnished to Buyer, (i) are, as of the dates and for the
periods referred to therein, complete and correct in all material respects, (ii)
present fairly the financial condition and results of operations of each
Guarantor as of the dates and for the periods indicated and (iii) have been
prepared in accordance with GAAP consistently applied, except as noted therein
(subject as to interim statements to normal year-end adjustments). Since the
date of the most recent financial statements, there has been no Material Adverse
Change with respect to either Guarantor. Except as disclosed in such financial
statements, neither Guarantor is subject to any contingent liabilities or
commitments that, individually or in the aggregate, have a reasonably likelihood
of causing a Material Adverse Change with respect to either Guarantor.
h. Accuracy of Information. None of the documents or information prepared
-----------------------
by or on behalf of Seller or a Guarantor and provided by Seller or a Guarantor
to Buyer relating to Seller's or a Guarantor's financial condition contain any
statement of a material fact with respect to Seller or Guarantors or the
Transactions that was untrue or misleading in any material respect when made.
Since the furnishing of such documents or information, there has been no change,
nor any development or event involving a prospective change known to Seller or
either Guarantor, that would render any of such documents or information untrue
or misleading in any material respect.
i. No Consents. No consent, license, approval or authorization from, or
-----------
registration, filing or declaration with, any regulatory body, administrative
agency, or other governmental, instrumentality, nor any consent, approval,
waiver or notification of any creditor, lessor or other non-governmental person,
is required in connection with the execution, delivery and performance by Seller
or either Guarantor of this Agreement or the consummation by Seller or either
Guarantor of any other Program Document, other than any that have heretofore
been obtained, given or made.
j. Compliance With Law. Etc. No practice, procedure or policy employed or
-------------------
proposed to be employed by Seller or either Guarantor in the conduct of its
businesses violates any law, regulation, judgment, regulatory consent, order or
decree applicable to it which, if enforced, would result in either a Material
Adverse Change with respect to Seller or either Guarantor or a Material Adverse
Effect.
k. Solvency: Fraudulent Conveyance. Each of the Seller and each Guarantor
-------------------------------
is solvent and will not be rendered insolvent by the Transaction and, after
giving effect to such Transaction, neither Seller nor either Guarantor will be
left with an unreasonably small amount
of capital with which to engage in its business. Neither Seller nor a Guarantor
intends to incur, nor believes that it has incurred, debts beyond its ability to
pay such debts as they mature. Neither Seller nor a Guarantor is contemplating
the commencement of insolvency, bankruptcy, liquidation or consolidation
proceedings or the appointment of a receiver, liquidator, conservator, trustee
or similar official in respect of Seller or either Guarantor or any of their
assets. The amount of consideration being received by Seller upon the sale of
the Purchased Assets to Buyer constitutes reasonably equivalent value and fair
consideration for such Purchased Assets. Seller is not transferring any
Purchased Assets with any intent to hinder, delay or defraud any of its
creditors. The amount of consideration being received by NCMC upon the sale
and/or contribution of the Purchased Assets to Seller, respectively, constitutes
reasonably equivalent value and fair consideration for such Purchased Assets.
Neither Guarantor is transferring any Purchased Assets with any intent to
hinder, delay or defraud any of its creditors.
l. Investment Company Act Compliance. Seller is not required to be
---------------------------------
registered as an "investment company" as defined under the Investment Company
Act nor as an entity under the control of an "investment company" as defined
under the Investment Company Act.
m. Taxes. Each of the Seller and each Guarantor has filed all federal
-----
and state tax returns which are required to be filed and paid all taxes,
including any assessments received by it, to the extent that such taxes have
become due (other than for taxes that are being contested in good faith or for
which it has established adequate reserves). Any taxes, fees and other
governmental charges payable by Seller or a Guarantor in connection with a
Transaction and the execution and delivery of the Program Documents have been
paid.
n. Additional Representations. With respect to each Loan, Seller and
--------------------------
Guarantors, jointly and severally, hereby make all of the applicable
representations and warranties set forth in Appendix A to the Custody Agreement
as of the date the Loan File or Wet Funding Package, as applicable, is delivered
to the Custodian. Further, as of each Purchase Date, the Seller and the
Guarantors shall be deemed to have represented and warranted in like manner that
neither the Seller nor either Guarantor has any knowledge that any such
representation or warranty may have ceased to be true in a material respect as
of such date, except as otherwise stated in a Transaction Notice, any such
exception to identify the applicable representation or warranty and specify in
reasonable detail the related knowledge of the Seller or either Guarantor.
o. No Broker. Neither Seller nor a Guarantor has dealt with any broker,
---------
investment banker, agent, or other person, except for Buyer, who may be entitled
to any commission or compensation in connection with the sale of Purchased
Assets pursuant to this Agreement; provided, that if Seller or either Guarantor
has dealt with any broker, investment banker, agent, or other person, except for
Buyer, who may be entitled to any commission or compensation in connection with
the sale of Purchased Assets pursuant to this Agreement, such commission or
compensation shall have been paid in full by Seller or a Guarantor, as
applicable.
p. Corporate Separateness.
----------------------
(i) The capital of Seller and Guarantors is adequate for the
respective business and undertakings of Seller and Guarantors.
(ii) Other than as provided in this Agreement and the other
Program Documents, Seller is not engaged in any business transactions
with either Guarantor or any of their Affiliates other than
transactions in the ordinary course of its business on an "arms-length"
basis.
(iii) The funds and assets of the Seller are not and will not
be, commingled with the funds of any other Person.
The representations and warranties set forth in this Agreement shall
survive transfer of the Purchased Assets to Buyer and shall continue for so long
as the Purchased Assets are subject to this Agreement.
13. COVENANTS OF SELLER AND GUARANTOR
---------------------------------
Each of Seller and each Guarantor, as applicable, hereby covenants with
Buyer as follows:
a. Defense of Title. Each of Seller and each Guarantor warrants and
----------------
will defend the right, title and interest of Buyer in and to all Collateral
against all adverse claims and demands.
b. No Amendment or Compromise. Following an Event of Default, without
--------------------------
the prior written consent of the Buyer, neither Seller, either Guarantor nor
those acting on Seller's or either Guarantor's behalf shall amend or modify, or
waive any term or condition of, or settle or compromise any claim in respect of,
any item of the Purchased Assets, any related rights or any of the Program
Documents, provided that any such party may amend or modify a Loan if such
amendment or modification does not affect the amount or timing of any payment of
principal or interest, extend its scheduled maturity date, modify its interest
rate, or constitute a cancellation or discharge of its outstanding principal
balance and does not materially and adversely affect the security afforded by
the real property, finishings, fixtures, or equipment securing the Loan.
c. No Assignment. Except as permitted herein, neither Seller, NCMC nor
-------------
any servicer shall sell, assign, transfer or otherwise dispose of, or grant any
option with respect to, or pledge, hypothecate or grant a security interest in
or lien on or otherwise encumber (except pursuant to the Program Documents), any
of the Purchased Assets or any interest therein, provided that this Section
shall not prevent any of the following: any transfer of Purchased Assets in
accordance with the Program Documents; any Hedging Instruments for the related
Purchased Assets; any servicing arrangement between the Interim Servicer and
Seller or its Affiliates; and any forward purchase commitment or other types of
take out commitment for the Purchased Assets.
d. Servicing of Loans. Seller and each Guarantor shall cause Interim
------------------
Servicer to service, or cause to be serviced, all Loans that are part of the
Purchased Assets in accordance with prudent servicing practices, pending any
delivery of such servicing to Buyer pursuant to this Agreement, employing at
least the same procedures and exercising the same care that Interim Servicer
customarily employs in servicing Loans for its own account. Seller shall notify
servicers of Buyer's interest hereunder and Seller shall notify Buyer of the
name and address of all servicers of Loans and shall identify each servicer with
respect to each Purchased Asset on a
loan-by-loan basis. Buyer shall have the right to approve each servicer and the
form of all Servicing Agreements or servicing side letter agreements. Seller
shall cause each servicer to hold or cause to be held all escrow funds collected
with respect to such Loans in customary custodial accounts and shall apply the
same for the purposes for which such funds were collected. Upon Buyer's request,
Seller shall provide reasonably promptly to Buyer a letter addressed to and
agreed to by each servicer of Loans, in form and substance reasonably
satisfactory to Buyer, advising such servicer of such matters as Buyer may
reasonably request relating to the Loans. If Seller should discover that, for
any reason whatsoever, Seller or any entity responsible to Seller by contract
for the administration and/or servicing any such Loan has failed to perform
fully Seller's obligations under the Program Documents or any of the obligations
of such entities with respect to the Purchased Assets, Seller shall promptly
notify Buyer.
e. Preservation of Collateral: Collateral Value. Each of Seller and
--------------------------------------------
each Guarantor shall do all things necessary to preserve the Collateral so that
it remains subject to a first priority perfected security interest hereunder.
Without limiting the foregoing, Seller and each Guarantor will comply with all
rules, regulations and other laws of any Governmental Authority and cause the
Collateral to comply with all applicable rules, regulations and other laws.
Neither Seller nor a Guarantor will allow any default by Seller or either
Guarantor to occur under any Collateral or any Program Documents and Seller and
each Guarantor shall fully perform or cause to be performed when due all of its
obligations under any Collateral or the Program Documents.
f. Maintenance of Papers, Records and Files. Seller and each Guarantor
----------------------------------------
shall require, and Seller or either Guarantor shall build, maintain and have
available, a complete file in accordance with lending industry custom and
practice for each Purchased Asset. Seller or either Guarantor will maintain or
cause to be maintained all such Records not in the possession of Custodian in
good and complete condition in accordance with industry practices and preserve
them against loss.
i) Seller and each Guarantor shall collect and maintain or
cause to be collected and maintained all Records relating to the
Purchased Assets in accordance with industry custom and practice,
including those maintained pursuant to the preceding subsection, and
all such Records shall be in the possession of the Custodian, the
Interim Servicer, the Seller or a Guarantor unless Buyer otherwise
approves. Neither Seller nor a Guarantor will allow any such papers,
records or files that are an original or an only copy to leave
Custodian's possession, except for individual items removed in
connection with servicing a specific Loan, in which event Seller or a
Guarantor will obtain or cause to be obtained a receipt from a
financially responsible person for any such paper, record or file.
ii) For so long as Buyer has an interest in or lien on any
Purchased Asset, Seller and each Guarantor will hold or cause to be
held all related Records in trust, as the custodian and bailee, for
Buyer. Seller or Guarantor shall notify, or cause to be notified, every
other party holding any such Records of the interests and liens granted
hereby.
iii) Upon reasonable advance notice from Custodian or Buyer,
Seller and each Guarantor shall (x) make any and all such Records
available to Custodian or Buyer to examine any such Records, either by
its own officers or employees, or by agents or contractors, or both,
and make copies of all or any portion thereof, (y) permit Buyer or its
authorized agents to discuss the affairs, finances and accounts of
Seller or either Guarantor with its respective chief operating officer
and chief financial officer and to discuss the affairs, finances and
accounts of Seller or either Guarantor with its independent certified
public accountants.
g. Financial Statements: Accountants' Reports: Other Information.
--------------------
Seller and each Guarantor shall keep or cause to be kept in reasonable detail
books and records of account of its assets and business and shall clearly
reflect therein the transfer of Purchased Assets to Buyer. Seller and Guarantors
shall furnish or cause to be furnished to Buyer the following:
i) Financial Statements. (x) As soon as available and in any
--------------------
event within 90 days after the end of each fiscal year, the
consolidated, audited balance sheets of NCFC, Guarantors and Seller as
of the end of each fiscal year of NCFC (inclusive of NCMC and Seller),
and the audited financial statements of income and changes in equity of
Guarantors and Seller, and the audited statement of cash flows of NCFC
(inclusive of NCMC and Seller), for such fiscal year and (y) as soon as
available and in any event within 45 days after the end of each quarter
(including the fourth quarter), the consolidated and consolidating,
unaudited balance sheets of NCFC (inclusive of NCMC and Seller) as of
the end of each quarter, and the unaudited financial statements of
income and changes in equity of NCFC (inclusive of NCMC and Seller),
and the unaudited statement of cash flows of NCFC (inclusive of NCMC
and Seller), for the portion of the fiscal year then ended, and (z)
within 45 days after the end of each month, monthly consolidated and
unaudited financial statements of income and changes in equity (and, to
the extent available, cash flow statements) and balance sheets as
provided in clause (y), all of which have been prepared in accordance
with GAAP and certified by such NCFC's, Guarantor's and Seller's, as
applicable, chief financial officer in the form of a compliance
certificate to be delivered along with the above financial statements.
ii) Loan Data. Monthly reports in form and scope satisfactory
---------
to Buyer, setting forth data regarding the performance of the Purchased
Assets for the immediately preceding month, and such other information
as Buyer may reasonably request, including, without limitation, any
other information regarding the Purchased Assets reasonably requested
by Buyer, the performance of any loans serviced by or on behalf of each
Interim Servicer and any other financial information regarding the
Guarantors reasonably requested by Buyer.
iii) Monthly Servicing Diskettes. On or before the second
---------------------------
Business Day prior to each Repurchase Date, or any other time at
Buyer's request, a Computer Medium (or any other electronic
transmission acceptable to Buyer) in a format acceptable to Buyer
containing such information with respect to the Purchased Assets as
Buyer may reasonably request upon reasonable prior notice.
iv) Certifications. NCMC shall execute and deliver, on behalf
--------------
of the Seller, a monthly certification substantially in the form of
Exhibit A-1 attached hereto and each Guarantor shall execute and
deliver a quarterly certification substantially in the form of Exhibit
A-2 attached hereto.
h. Notice of Material Events. Each of Seller and each Guarantor
-------------------------
shall promptly inform Buyer in writing of any of the following:
i) any Default, Event of Default or default or breach by
Seller or either Guarantor of any other material obligation under any
Program Document, or the occurrence or existence of any event or
circumstance that Seller or either Guarantor with the passage of time
expects to have a reasonably likelihood of becoming an Event of
Default;
ii) any material change in the insurance coverage required of
Seller or either Guarantor or any other Person pursuant to any Program
Document, with copy of evidence of same attached;
iii) any material dispute, litigation, investigation,
proceeding or suspension between Seller or a Guarantor, on the one
hand, and any Governmental Authority or any other Person;
iv) any material adverse change in accounting policies or
financial reporting practices of Seller or a Guarantor;
v) the occurrence of any material employment dispute and a
description of the strategy for resolving it; and
vi) any event, circumstance or condition that has resulted,
or has a reasonably likelihood of resulting, in either a Material
Adverse Change with respect to Seller or a Guarantor or a Material
Adverse Effect.
i. Maintenance of Licenses. Each of Seller and each Guarantor
-----------------------
shall maintain, all licenses, permits or other approvals necessary for each of
Seller and each Guarantor to conduct its business and to perform its obligations
under the Program Documents, and each of Seller and each Guarantor shall conduct
its business strictly in accordance with applicable law.
j. No Withholdings for Taxes. Any payments made by Seller to
-------------------------
Buyer shall be free and clear of, and without deduction or withholding for, any
taxes; provided, however, that if Seller shall be required by law to deduct or
withhold any taxes from any sums payable to Buyer, then Seller shall (A) make
such deductions or withholdings and pay such amounts to the relevant authority
in accordance with applicable law, (B) pay to Buyer the sum that would have been
payable had such deduction or withholding not been made, and (C) at the time the
Price Differential is paid, pay to Buyer all additional amounts as specified by
Buyer to preserve the after-tax yield Buyer would have received if such tax had
not been imposed. This provision does not apply to income taxes payable by Buyer
on its taxable income.
k. Nature of Business. Neither Seller nor a Guarantor shall make
------------------
any material change in the nature of its business as carried on at the date
hereof.
l. Limitation on Distributions. If a Default has occurred and is
---------------------------
occurring, neither Seller nor either Guarantor shall pay any dividends or
distributions with respect to any capital stock or other equity interests in
Seller or either Guarantor, 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 Seller or either
Guarantor.
m. Reserved.
--------
n. Merger of Guarantor. Neither Guarantor shall at any time,
-------------------
directly or indirectly, (i) liquidate or dissolve or enter into any
consolidation or merger or be subject to a Change in Control without Buyer's
prior consent; (ii) form or enter into any partnership, joint venture, syndicate
or other combination which would have a Material Adverse Effect; or (iii) make
any Material Adverse Change with respect to a Guarantor or such Guarantor's
Subsidiaries.
o. Insurance. Seller will, and shall cause the Interim Servicer
---------
to, obtain and maintain insurance with responsible companies in such amounts and
against such risks as are customarily carried by business entities engaged in
similar businesses similarly situated, and will furnish Buyer on request full
information as to all such insurance, and provide within (15) days after receipt
of such request the certificates or other documents evidencing renewal of each
such policy.
p. Affiliate Transaction. Neither Seller nor a Guarantor will at
---------------------
any time, directly or indirectly, sell, lease or otherwise transfer any property
or assets to, or otherwise acquire any property or assets from, or otherwise
engage in any transactions with, any of their Affiliates unless the terms
thereof are no less favorable to such Seller or Guarantor, as applicable, than
those that could be obtained at the time of such transaction in an arm's length
transaction with a Person who is not such an Affiliate.
q. Change of Fiscal Year. Neither Seller nor a Guarantor will at
---------------------
any time, directly or indirectly, except upon ninety (90) days' prior written
notice to Buyer, change the date on which such Seller's or Guarantor's fiscal
year begins from such Seller's or Guarantor's current fiscal year beginning
date.
r. Delivering of Servicing Rights. With respect to the Servicing
------------------------------
Rights of each Loan, Seller and Guarantors shall deliver such Servicing Rights
to the designee of Buyer, within 75 days of a Purchase Date, unless otherwise
stated in writing by Buyer; provided that on each Repurchase Date that is
subject to a new Transaction, such delivery requirement is deemed restated for
such new Transaction (and the immediately preceding delivery requirement is
deemed to be rescinded) in the absence of directions to the contrary from Buyer,
and a new 75-day period is deemed to commence as of such Repurchase Date. The
Seller's and Guarantors' transfer of the Servicing Rights under this Section
shall be in accordance with customary standards in the industry.
s. Underwriting Guidelines. NCMC shall not permit any material
-----------------------
modifications to be made to the Underwriting Guidelines without the prior
consent of the Buyer (such consent not to be unreasonably withheld).
t. No Other Indebtedness. Without the prior written consent of
---------------------
the Buyer, the Seller shall not incur any Indebtedness or guaranty the
Indebtedness of any other Person other than the Indebtedness incurred under the
Program Documents.
u. Facility Fee. Seller agrees to pay to Buyer on the date of execution
------------
of this Agreement, a facility fee in the amount of the Facility Fee Amount, such
payment to be made in United States dollars, in immediately available funds,
without deduction, set-off or counterclaim. The Buyer may, in its sole
discretion, net such commitment fee from the proceeds of any Purchase Price
payable to the Seller.
14. REPURCHASE DATE PAYMENTS/COLLECTIONS
------------------------------------
On each Repurchase Date, Seller shall remit or shall cause to be
remitted to Buyer the Repurchase Price.
15. REPURCHASE OF PURCHASED ASSETS, CHANGE OF LAW
---------------------------------------------
a. Upon discovery by Seller or a Guarantor of a breach of any of the
representations and warranties set forth in Appendix A to the Custody Agreement,
Seller or a Guarantor shall give prompt written notice thereof to Buyer. Upon
any such discovery by Buyer, Buyer will notify Seller. It is understood and
agreed that the representations and warranties set forth in Appendix A to the
Custody Agreement shall survive delivery of the respective Loan Files to the
Custodian and shall inure to the benefit of Buyer. The fact that Buyer has
conducted or has failed to conduct any partial or complete due diligence
investigation in connection with its purchase of any Purchased Asset shall not
affect Buyer's right to demand repurchase as provided under this Agreement. The
Seller shall within two (2) Business Days of the earlier of the Seller's or a
Guarantor's discovery or either Seller or a Guarantor receiving notice, with
respect to any Purchased Asset, of (i) any breach of a representation or
warranty contained in Appendix A to the Custody Agreement or (ii) any failure to
deliver any of the items required to be delivered as part of the Loan File
within the time period required for delivery pursuant to the Custody Agreement,
promptly cure such breach or delivery failure in all material respects. If
within two (2) Business Days after the earlier of Seller's or a Guarantor's
discovery of such breach or delivery failure or Seller or a Guarantor receiving
notice thereof that such breach or delivery failure has not been remedied by the
Seller, the Seller shall promptly upon receipt of written instructions from
Buyer, at Buyer's option, either (i) purchase such Purchased Asset at a purchase
price equal to the Repurchase Price with respect to such Purchased Asset by wire
transfer to the account designated by Buyer, or (ii) transfer comparable
Substitute Assets to Buyer, as provided in Section 16 hereof.
b. If Buyer determines that the introduction of, any change in, or the
interpretation or administration of any requirement of law has made it unlawful
or commercially impracticable to engage in any Transactions with a Pricing Rate
based on LIBOR, then Seller (i) shall, upon its receipt of notice of such fact
and demand from Buyer (with a copy of such notice to Custodian), repurchase the
Purchased Assets subject to the Transaction on the next succeeding Business Day
and, at Seller's election, concurrently enter into a new Transaction with Buyer
with a Pricing Rate based on the Prime Rate plus the margin set forth in the
Side Letter as part of the Pricing Rate and (ii) may elect, by giving notice to
Buyer and Custodian, that all new Transactions shall have Pricing Rates based on
the Prime Rate plus such margin.
c. If Buyer determines in its sole discretion that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on Buyer's capital or on the capital of any Affiliate of Buyer as a
consequence of such Change in Law on this Agreement, then from time to ▇▇▇▇
▇▇▇▇▇▇ will compensate Buyer or Buyer's Affiliate, as applicable, for such
reduced rate of return suffered as a consequence of such Change in Law on terms
similar to those imposed by Buyer on its other similarly affected customers.
Buyer shall provide Seller with prompt notice as to any Change in Law.
Notwithstanding any other provisions in this Agreement, in the event of any such
Change in Law Seller will have the right to terminate all Transactions then
outstanding without any prepayment penalty as of a date selected by Seller,
which date shall be prior to the then applicable Repurchase Date and which date
shall thereafter for all purposes hereof be deemed to be the Repurchase Date.
16. SUBSTITUTION
------------
Seller may, subject to agreement with and acceptance by Buyer,
substitute other assets which are substantially the same as the Purchased Assets
(the "Substitute Assets") for any Purchased Assets. Such substitution shall be
made by transfer to Buyer of such other Substitute Assets and transfer to Seller
of such Purchased Assets. After substitution, the Substitute Assets shall be
deemed to be Purchased Assets.
17. REPURCHASE TRANSACTIONS
-----------------------
Buyer may, in its sole election, engage in repurchase transactions with
the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or
otherwise convey the Purchased Assets with a counterparty of Buyer's choice, in
all cases subject to Buyer's obligation to reconvey the Purchased Assets (and
not substitutes therefor) on the Repurchase Date. In the event Buyer engages in
a repurchase transaction with any of the Purchased Assets or otherwise pledges
or hypothecates any of the Purchased Assets, Buyer shall have the right to
assign to Buyer's counterparty any of the applicable representations or
warranties in Appendix A to the Custody Agreement and the remedies for breach
thereof, as they relate to the Purchased Assets that are subject to such
repurchase transaction.
18. EVENTS OF DEFAULT
-----------------
With respect to any Transactions covered by or related to this
Agreement, the occurrence of any of the following events shall constitute an
"Event of Default":
a. Seller fails to transfer the Purchased Assets to Buyer on the
applicable Purchase Date (provided Buyer has tendered the related Purchase
Price);
b. Seller either fails to repurchase the Purchased Assets on the
applicable Repurchase Date or fails to perform its obligations under Section 6;
c. either Seller or a Guarantor shall fail to perform, observe or
comply with any other material term, covenant or agreement contained in the
Program Documents (other than Appendix A to the Custody Agreement) and such
failure is not cured within the time period expressly provided or, if no such
cure period is provided, within two (2) Business Days of the
earlier of (i) such party's receipt of written notice from Buyer or Custodian of
such breach or (ii) the date on which such party obtains notice or knowledge of
the facts giving rise to such breach;
d. any representation or warranty made by Seller or a Guarantor (or any
of Seller's or a Guarantor's officers) in the Program Documents or in any other
document delivered in connection therewith (other than the representations or
warranties in Appendix A to the Custody Agreement) shall have been incorrect or
untrue in any material respect when made or repeated or deemed to have been made
or repeated;
e. Seller, a Guarantor, or any of Seller's or a Guarantor's
Subsidiaries shall fail (i) to pay any of Seller's, a Guarantor's or Seller's or
a Guarantor's Subsidiaries' Indebtedness (aggregating in excess of $2,500,000
with respect to a Guarantor or a Guarantor and its Subsidiaries, taken as a
whole), or any interest or premium thereon when due (whether by scheduled
maturity, requirement prepayment, acceleration, demand or otherwise), or (ii) to
make any payment when due under Seller's, a Guarantor's or Seller's or a
Guarantor's Subsidiaries' Guarantee of another person's Indebtedness for
borrowed money, and, in either case, such failure shall entitle any related
counterparty to declare any such Indebtedness or Guarantee to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
f. a custodian, receiver, conservator, liquidator, trustee,
sequestrator or similar official for Seller, a Guarantor or any of Seller's or a
Guarantor's Subsidiaries, or of any of Seller's, a Guarantor's or their
respective Property (as a debtor or creditor protection procedure), is appointed
or takes possession of such property; or Seller, a Guarantor or any of Seller's
or a Guarantor's Subsidiaries generally fails to pay Seller's, a Guarantor's or
Seller's or a Guarantor's Subsidiaries' debts as they become due; or Seller, a
Guarantor or any of Seller's or a Guarantor's Subsidiaries is adjudicated
bankrupt or insolvent; or an order for relief is entered under the Federal
Bankruptcy Code, or any successor or similar applicable statute, or any
administrative insolvency scheme, against Seller, a Guarantor or any of Seller's
or a Guarantor's Subsidiaries; or any of Seller's, a Guarantor's or Seller's or
a Guarantor's Subsidiaries' Property is sequestered by court or administrative
order; or a petition is filed against Seller, a Guarantor or any of Seller's or
a Guarantor's Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, moratorium, delinquency or
liquidation law of any jurisdiction, whether now or subsequently in effect;
g. Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries
files a voluntary petition in bankruptcy seeks relief under any provision of any
bankruptcy, reorganization, moratorium, delinquency, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction whether
now or subsequently in effect; or consents to the filing of any petition against
it under any such law; or consents to the appointment of or taking possession by
a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar
official for Seller, a Guarantor or any of Seller's or a Guarantor's
Subsidiaries, or of all or any part of Seller's, a Guarantor's or Seller's or a
Guarantor's Subsidiaries' Property; or makes an assignment for the benefit of
Seller, a Guarantor or Seller's or a Guarantor's Subsidiaries' creditors;
h. any final, nonappealable judgment or order for the payment of money
in excess of $2,500,000 is rendered against Seller, a Guarantor or any of
Seller's or a Guarantor's
Subsidiaries and remains undischarged or unsatisfied after the passage of 30
days following the date on which it is entered;
i. any Governmental Authority or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the Property of Seller, a Guarantor or any of Seller's or a
Guarantor's Subsidiaries, or shall have taken any action to displace the
management of Seller, a Guarantor or any of Seller's or a Guarantor's
Subsidiaries or to curtail its authority in the conduct of the business of
Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries, or takes
any action in the nature of enforcement to remove, limit or restrict the
approval of Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries
as an issuer, buyer or a seller/servicer of Loans or securities backed thereby;
j. Seller, a Guarantor or any of Seller's or a Guarantor's Subsidiaries
shall default under, or fail to perform as requested under, or shall otherwise
breach the material terms of any instrument, agreement or contract relating to
Indebtedness (aggregating in excess of $2,500,000 with respect to a Guarantor or
a Guarantor and its Subsidiaries, taken as a whole), and such default, failure
or breach shall entitle any counterparty to declare such Indebtedness to be due
and payable prior to the maturity thereof;
k. in the reasonable good faith judgment of Buyer any Material Adverse
Change shall have occurred with respect to Seller, a Guarantor or any of
Seller's or a Guarantor's Subsidiaries taken as a whole;
l. Seller or a Guarantor shall admit in writing its inability to, or
intention not to, perform any of such Seller's or a Guarantor's respective
material Obligations;
m. except as expressly permitted in this Agreement, Seller or a
Guarantor dissolves, merges or consolidates with another entity, or sells,
transfers, or otherwise disposes of a material portion of such Seller's or a
Guarantor's (as applicable) business or assets unless Buyer's written consent is
given;
n. this Agreement shall for any reason cease to create a valid, first
priority security interest or ownership interest upon transfer in any material
portion of the Purchased Assets or Collateral purported to be covered hereby;
o. either Seller's or a Guarantor's audited annual financial statements
or the notes thereto or other opinions or conclusions stated therein shall be
qualified or limited by reference to the status of such Seller or a Guarantor as
a "going concern" or a reference of similar import;
p. a Change in Control of Seller or a Guarantor shall have occurred
which has not been approved by Buyer;
q. at the end of any financial quarter, the ratio of NCMC's Total
Liabilities to Adjusted Tangible Net Worth is greater than 10:1; or at the end
of any financial quarter, the ratio of NCFC's Total Liabilities to Adjusted
Tangible Net Worth is greater than 10:1; or at the end of any financial quarter,
the ratio of NCFC's Total Adjusted Liabilities to Adjusted Tangible Net Worth is
greater than 12:1;
r. at the end of any financial quarter, the Adjusted Tangible Net Worth
of NCMC is less than the sum of (i) 85% of its Adjusted Tangible Net Worth as of
December 31, 2001, plus (ii) 90% of all capital contributions following December
----
31, 2001, plus (iii) 50% of its positive net income December 31, 2001; or at the
----
end of any financial quarter, the Adjusted Tangible Net Worth of NCFC is less
than the sum of (i) 85% of its Adjusted Tangible Net Worth as of December 31,
2001, plus (ii) 90% of all capital contributions following December 31, 2001,
----
plus (iii) 50% of its positive net income December 31, 2001;
----
s. at the end of any month, NCMC fails to maintain at least $30,000,000
of Liquid Assets;
t. at the end of any financial quarter, the ratio of NCFC's Total
Non-warehouse Debt to Adjusted Tangible Net Worth is greater than 0.50:1.0;
u. at the end of any financial quarter, the net income of NCFC
(determined in accordance with GAAP) over the four most recent financial
quarters from any date of determination is less than $1; and v. at the end of
any financial quarter, the Interest Coverage Ratio of NCFC is less than 1.25;
and
w. any material amendment is made to the Underwriting Guidelines
which was not previously approved in writing by Buyer.
It is understood and agreed that any default, cure or notice period
provided for in the Program Documents may be accelerated by Buyer unilaterally
upon Buyer's or Agent's reasonable determination that it is reasonable to do so
under the circumstances, with due consideration to the volatility of markets,
the seriousness of any Defaults and the perceived risk to Buyer of delay.
19. REMEDIES
--------
Upon the occurrence of an Event of Default, Buyer, at its option (which
option shall be deemed to have been exercised immediately upon the occurrence of
an Event of Default pursuant to Section 18(f) or (g) hereof), shall have any or
all of the following rights and remedies, which may be exercised by Buyer:
a. The Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur.
b. Seller's obligations hereunder to repurchase all Purchased Assets at
the Repurchase Price therefor on the Repurchase Date in such Transactions shall
thereupon become immediately due and payable; all Income paid after such
exercise or deemed exercise shall be remitted to and retained by Buyer and
applied to the aggregate Repurchase Prices and any other amounts owing by Seller
hereunder; Seller and Guarantors shall immediately deliver to Buyer or its
designee any and all Records relating to the Purchased Assets subject to such
Transaction
then in Seller's and Guarantor's possession and/or control; and all right, title
and interest in and entitlement to such Purchased Assets and Servicing Rights
thereon shall be deemed transferred to Buyer.
Buyer may (A) sell, on or following the Business Day following the date
on which the Repurchase Price became due and payable pursuant to Section 19(b)
without notice or demand of any kind, at a public or private sale and at such
price or prices as Buyer may reasonably deem satisfactory any or all Purchased
Assets or (B) in its sole discretion elect, in lieu of selling all or a portion
of such Purchased Assets, to give Seller credit for such Purchased Assets in an
amount equal to the Market Value of the Purchased Assets against the aggregate
unpaid Repurchase Price and any other amounts owing by Seller hereunder. The
Seller shall remain liable to the Buyer for any amounts that remain owing to
Buyer following a sale or credit under the preceding sentence. The proceeds of
any disposition of Purchased Assets shall be applied first to the reasonable
costs and expenses incurred by Buyer in connection with or as a result of an
Event of Default; second to Breakage Costs, costs of cover and/or related
hedging transactions; third to the aggregate Repurchase Prices; and fourth to
all other Obligations.
The parties recognize that it may not be possible to purchase or sell
all of the Purchased Assets on a particular Business Day, or in a transaction
with the same purchaser, or in the same manner because the market for such
Purchased Assets may not be liquid. In view of the nature of the Purchased
Assets, the parties agree that liquidation of a Transaction or the underlying
Purchased Assets does not require a public purchase or sale and that a good
faith private purchase or sale shall be deemed to have been made in a
commercially reasonable manner. Accordingly, Buyer may elect the time and manner
of liquidating any Purchased Asset and nothing contained herein shall obligate
Buyer to liquidate any Purchased Asset on the occurrence of an Event of Default
or to liquidate all Purchased Assets in the same manner or on the same Business
Day or constitute a waiver of any right or remedy of Buyer. Notwithstanding the
foregoing, the parties to this Agreement agree that the Transactions have been
entered into in consideration of and in reliance upon the fact that all
Transactions hereunder constitute a single business and contractual obligation
and that each Transaction has been entered into in consideration of the other
Transactions.
In addition to its rights hereunder, Buyer shall have the right to
proceed against any of Seller's assets which may be in the possession of Buyer,
any of Buyer's Affiliates or its designee (including the Custodian), including
the right to liquidate such assets and to set-off the proceeds against monies
owed by Seller to Buyer pursuant to this Agreement. Buyer may set off cash, the
proceeds of the liquidation of the Purchased Assets and Additional Purchased
Assets, any other Collateral or its proceeds and all other sums or obligations
owed by Buyer to Seller against all of Seller's Obligations to Buyer, whether
under this Agreement, under a Transaction, or under any other agreement between
the parties, or otherwise, whether or not such Obligations are then due, without
prejudice to Buyer's right to recover any deficiency.
The Buyer shall have the right to obtain physical possession of the
Records and all other files of the Seller relating to the Purchased Assets and
all documents relating to the Purchased Assets which are then or may thereafter
come into the possession of the Seller or any third party acting for the Seller
and the Seller shall deliver to the Buyer such assignments as the Buyer shall
request.
Buyer may direct all Persons servicing the Purchased Assets to take
such action with respect to the Purchased Assets as Buyer determines
appropriate.
Each of Seller and each Guarantor shall cause all sums received by it
with respect to the Purchased Assets to be deposited with Custodian (or such
other Person as Buyer may direct) after receipt thereof.
Buyer shall without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court having
jurisdiction, without notice, to take possession of and protect, collect,
manage, liquidate, and sell the Purchased Assets and any other Collateral or any
portion thereof, collect the payments due with respect to the Purchased Assets
and any other Collateral or any portion thereof, and do anything that Buyer is
authorized hereunder to do. Seller shall pay all costs and expenses incurred by
Buyer in connection with the appointment and activities of such receiver.
Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and Seller hereby expressly waives, to the extent
permitted by law, any right Seller might otherwise have to require Buyer to
enforce its rights by judicial process. Seller also waives, to the extent
permitted by law, any defense Seller might otherwise have to the Obligations,
arising from use of nonjudicial process, enforcement and sale of all or any
portion of the Purchased Assets and any other Collateral or from any other
election of remedies. Seller recognizes that nonjudicial remedies are consistent
with the usages of the trade, are responsive to commercial necessity and are the
result of a bargain at arm's length.
In addition to all the rights and remedies specifically provided
herein, Buyer shall have all other rights and remedies provided by applicable
federal, state, foreign, and local laws, whether existing at law, in equity or
by statute.
Upon the occurrence of an Event of Default, Buyer shall have, except as
otherwise expressly provided in this Agreement, the right to exercise any of its
rights and/or remedies without presentment, demand, protest or further notice of
any kind other than as expressly set forth herein, all of which are hereby
expressly waived by Seller.
Seller hereby authorizes Buyer, at Seller's expense, to file such
financing statement or statements relating to the Purchased Assets and the
Collateral without Seller's signature thereon as Buyer at its option may deem
appropriate, and appoints Buyer as Seller's attorney-in-fact to execute any such
financing statement or statements in Seller's name and to perform all other acts
which Buyer deems appropriate to perfect and continue the lien and security
interest granted hereby and to protect, preserve and realize upon the Purchased
Assets and the Collateral, including, but not limited to, the right to endorse
notes, complete blanks in documents and execute assignments on behalf of Seller
as its attorney-in-fact. This power of attorney is coupled with an interest and
is irrevocable without Buyer's consent.
20. DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE
-----------------------------------------
No failure on the part of Buyer to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Buyer of any right, power
or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All rights and remedies of Buyer
provided for herein are cumulative and in addition to any and all other rights
and remedies provided by law, the Program Documents and the other instruments
and agreements contemplated hereby and thereby, and are not conditional or
contingent on any attempt by Buyer to exercise any of its rights under any other
related document. Buyer may exercise at any time after the occurrence of an
Event of Default one or more remedies, as it so desires, and may thereafter at
any time and from time to time exercise any other remedy or remedies.
21. USE OF EMPLOYEE PLAN ASSETS
---------------------------
No assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") shall be
used by either party hereto in a Transaction.
22. INDEMNITY
---------
a. Seller agrees to pay on demand (i) all reasonable out-of-pocket
costs and expenses of Buyer in connection with the preparation, execution,
delivery, modification, administration and amendment of the Program Documents
(including, without limitation, (A) all collateral review and UCC search and
filing fees and expenses and (B) the reasonable fees and expenses of counsel for
Buyer with respect to advising Buyer as to its rights and responsibilities, or
the perfection, protection or preservation of rights or interests, under this
Agreement, with respect to negotiations with Seller or with other creditors of
Seller or any of its Subsidiaries arising out of any-Default or any events or
circumstances that may rise to a Default and with respect to presenting claims
in or otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of Buyer in
connection with the enforcement of this Agreement (including any waivers),
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for Buyer) whether or
not the transactions contemplated hereby are consummated.
b. Seller agrees to indemnify and hold harmless Buyer and each of its
respective Affiliates and their officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against (and will reimburse
each Indemnified Party as the same is incurred) any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or other proceeding (whether or not such Indemnified Party is a party
thereto) relating to, resulting from or arising out of any of the Program
Documents and all other documents related thereto, any breach of a
representation or warranty of Seller or a Guarantor or Seller's or a Guarantor's
officer in this Agreement or any other Program Document, and all actions taken
pursuant thereto) (i) the Transactions, the actual or proposed use of the
proceeds of the Transactions, this
Agreement or any of the transactions contemplated thereby, including, without
limitation, any acquisition or proposed acquisition or (ii) the actual or
alleged presence of hazardous materials on any Property or any environmental
action relating in any way to any Property, except to the extent such claim,
damage, class, liability or expense is found in a final, non-appealable judgment
by a court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct or is the result of a claim made
by Seller or a Guarantor against the Indemnified Party, and Seller or a
Guarantor is ultimately the successful party in any resulting litigation or
arbitration. Seller also agrees not to assert any claim against Buyer or any of
its Affiliates, or any of their respective officers, directors, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Program Documents, the actual or proposed use of the proceeds of the
Transactions, this Agreement or any of the transactions contemplated thereby.
THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES,
WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT) OF THE INDEMNIFIED PARTIES.
c. Without limitation on the provisions of Section 4, if any payment of
the Repurchase Price of any Transaction is made by Seller other than on the then
scheduled Repurchase Date thereto as a result of an acceleration of the
Repurchase Date pursuant to Section 19 or for any other reason, Seller shall,
except as otherwise provided in Sections 15(c) and 24, upon demand by Buyer, pay
to Buyer any Breakage Costs incurred as of a result of such payment.
d. If Seller fails to pay when due any costs, expenses or other amounts
payable by it under this Agreement, including, without limitation, reasonable
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of Seller by Buyer, in its sole discretion.
e. Without prejudice to the survival of any other agreement of Seller
hereunder, the covenants and obligations of Seller contained in this Section
shall survive the payment in full of the Repurchase Price and all other amounts
payable hereunder and delivery of the Purchased Assets by Buyer against full
payment therefor.
23. WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS
------------------------------------------
Seller hereby expressly waives, to the fullest extent permitted by law,
every statute of limitation on a deficiency judgment, any reduction in the
proceeds of any Purchased Assets as a result of restrictions upon Buyer or
Custodian contained in the Program Documents or any other instrument delivered
in connection therewith, and any right that it may have to direct the order in
which any of the Purchased Assets shall be disposed of in the event of any
disposition pursuant hereto.
24. REIMBURSEMENT
-------------
All sums reasonably expended by Buyer in connection with the exercise
of any right or remedy provided for herein shall be and remain Seller's
obligation. Seller agrees to pay, with interest at the Default Rate, to the
extent that an Event of Default has occurred, the reasonable out-of-pocket
expenses and reasonable attorneys' fees incurred by Buyer and/or Custodian in
connection with the preparation, enforcement (including any waivers),
administration and amendments of the Program Documents, the taking of any
action, including a Guarantor action, required or permitted to be taken by Buyer
(without duplication to Buyer) and/or Custodian pursuant thereto, any "due
diligence" or loan agent reviews conducted by Buyer or on its behalf or by
refinancing or restructuring in the nature of a "workout." If Buyer determines
that, due to the introduction of, any change in, or the compliance by Buyer with
(i) any eurocurrency reserve requirement or (ii) the interpretation of any law,
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
an increase in the cost to Buyer in engaging in the present or any future
Transactions, then Seller agrees to pay to Buyer, from time to time, upon demand
by Buyer (with a copy to Custodian) the actual cost of additional amounts as
specified by Buyer to compensate Buyer for such increased costs. Notwithstanding
any other provisions in this Agreement, in the event of any such change in the
eurocurrency reserve requirement or the interpretation of any law, regulation or
any guideline or request from any central bank or other Governmental Authority,
Seller will have the right to terminate all Transactions then outstanding as of
a date selected by Seller (without the payment by Seller of any prepayment
penalty or Breakage Costs), which date shall be prior to the applicable
Repurchase Date and which date shall thereafter for all purposes hereof, be
deemed to be the Repurchase Date. In addition, Buyer shall promptly notify
Seller if any events in clause (i) or (ii) of this Section 24 occur.
25. FURTHER ASSURANCES
------------------
Seller and Guarantors agree to do such further acts and things and to
execute and deliver to Buyer such additional assignments, acknowledgments,
agreements, powers and instruments as are reasonably required by Buyer to carry
into effect the intent and purposes of this Agreement, to perfect the interests
of Buyer in the Purchased Assets or to better assure and confirm unto Buyer its
rights, powers and remedies hereunder.
26. ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION
----------------------------------------
This Agreement supersedes and integrates all previous negotiations,
contracts, agreements and understandings between the parties relating to a sale
and repurchase of Purchased Assets and Additional Purchased Assets thereto, and
it, together with the other Program Documents, and the other documents delivered
pursuant hereto or thereto, contains the entire final agreement of the parties.
No prior negotiation, agreement, understanding or prior contract shall have any
validity.
27. TERMINATION
-----------
This Agreement shall remain in effect until the earlier of (i) 364 days
following the Effective Date or (ii) at Buyer's option upon the occurrence of an
Event of Default (such date, the "Termination Date"). However, no such
termination shall affect Seller's outstanding obligations to Buyer at the
time-of such termination. Seller's obligations to indemnify Buyer pursuant to
this Agreement shall survive the termination hereof.
28. ASSIGNMENT
----------
The Program Documents are not assignable by Seller. Buyer may from time
to time assign all or a portion of its rights and obligations under this
Agreement and the Program Documents; provided, however, that Buyer shall
maintain, for review by Seller upon written request, a register of assignees and
a copy of an executed assignment and acceptance by Buyer and assignee
("Assignment and Acceptance"), specifying the percentage or portion of such
rights and obligations assigned. Upon such assignment, (a) such assignee shall
be a party hereto and to each Program Document to the extent of the percentage
or portion set forth in the Assignment and Acceptance, and shall succeed to the
applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to
the extent that such rights and obligations have been so assigned by it to
either (i) an Affiliate of Buyer which assumes the obligations of Buyer or (ii)
to another Person approved by Seller (such approval not to be unreasonably
withheld) which assumes the obligations of Buyer, be released from its
obligations hereunder accruing thereafter and under the Program Documents.
Unless otherwise stated in the Assignment and Acceptance, Seller shall continue
to take directions solely from Buyer unless otherwise notified by Buyer in
writing. Buyer may distribute to any prospective assignee any document or other
information delivered to Buyer by Seller. Notwithstanding any assignment by
Buyer pursuant to this Section 28, Buyer shall remain liable as to the
Transactions.
29. AMENDMENTS, ETC.
----------------
No amendment or waiver of any provision of this Agreement nor any
consent to any failure to comply herewith or therewith shall in any event be
effective unless the same shall be in writing and signed by Seller and Buyer,
and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
30. SEVERABILITY
------------
If any provision of any Program Document is declared invalid by any
court of competent jurisdiction, such invalidity shall not affect any other
provision of the Program Documents, and each Program Document shall be enforced
to the fullest extent permitted by law.
31. BINDING EFFECT: GOVERNING LAW
-----------------------------
This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and assigns, except that Seller may not
assign or transfer any of its rights or obligations under this Agreement or any
other Program Document without the prior written consent of Buyer. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.
32. CONSENT TO JURISDICTION
-----------------------
SELLER HEREBY WAIVES TRIAL BY JURY. SELLER HEREBY IRREVOCABLY CONSENTS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING
OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING. SELLER
HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION SELLER MAY HAVE TO, NON-EXCLUSIVE
PERSONAL JURISDICTION AND VENUE IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ AND THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT
TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS.
33. SINGLE AGREEMENT
----------------
Seller, Guarantors and Buyer acknowledge that, and have entered
hereinto and will enter into each Transaction hereunder in consideration of and
in reliance upon the fact that, all Transactions hereunder constitute a single
business and contractual relationship and have been made in consideration of
each other. Accordingly, Seller, Guarantors and Buyer each agree (i) to perform
all of its obligations in respect of each Transaction hereunder, and that a
default in the performance of any such obligations shall constitute a default by
it in respect of all Transactions hereunder, and (ii) that payments, deliveries
and other transfers made by any of them in respect of any Transaction shall be
deemed to have been made in consideration of payments, deliveries and other
transfer in respect of any other Transaction hereunder, and the obligations to
make any such payments, deliveries and other transfers may be applied against
each other and netted.
34. INTENT
------
Seller and Buyer recognize that each Transaction is a "repurchase
agreement" as that term is defined in Section 101 of Title 11 of the United
States Code, as amended ("USC") (except insofar as the Loans subject to such
Transaction or the term of such Transaction would render such definition
inapplicable), and a "securities contract" as that term is defined in Section
741 of Title 11 of the USC (except insofar as the Loans subject to such
Transaction or the term of such Transaction would render such definition
inapplicable).
It is understood that Buyer's right to liquidate the Purchased Assets
delivered to it in connection with the Transactions hereunder or to exercise any
other remedies pursuant to Section 19 hereof is a contractual right to liquidate
such Transaction as described in Sections 555 and 559 of Title 11 of the USC.
35. NOTICES AND OTHER COMMUNICATIONS
--------------------------------
Except as provided herein, any notice required or permitted by this
Agreement shall be in writing and shall be effective and deemed delivered only
when received by the party to which it is sent; provided, however, that a
facsimile transmission shall be deemed to be received when transmitted so long
as the transmitting machine has provided an electronic confirmation (without
error message) of such transmission. Any such notice shall be sent to a party at
the address or facsimile transmission number set forth below:
if to Seller:
------------
New Century Funding A
c/o Christiana Bank & Trust Company
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
with a copy to:
New Century Funding Corporation
as administrator of New Century Funding A
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to NCMC:
----------
New Century Mortgage Corporation
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Buyer or Agent:
--------------------
Bank of America, N.A.
TX1-492-66-01
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Attention: ▇▇▇▇ ▇. Short, Associate
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or, for Transaction Notices and related documents:
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Loan Administrator
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
as such address or number may be changed by like notice.
36. CONFIDENTIALITY
---------------
This Agreement and its terms, provisions, supplements and amendments, and
transactions and notices hereunder, are proprietary to Buyer and Agent and shall
be held by Seller and each Guarantor (and Seller and Guarantors shall cause
Interim Servicer to hold it) in strict confidence and shall not be disclosed to
any third party without the consent of Buyer except for (i) disclosure to
Seller's or a Guarantor's direct and indirect parent companies, attorneys,
agents or accountants, provided that such attorneys or accountants likewise
agree to be bound by this covenant of confidentiality or (ii) disclosure
required by law, rule, regulation or order of a court or other regulatory body
or (iii) disclosure to any approved Hedge Counterparty to the extent necessary
to obtain any Hedge Instrument hereunder or (iv) any disclosures or filing
required under Securities and Exchange Commission or state securities' laws;
provided that neither the Seller nor any Guarantor shall file the Side Letter
with the Securities and Exchange Commission or state securities office, unless
otherwise agreed by Buyer in writing, and the Seller and Guarantor agree to use
best efforts not to file the terms of the Side Letter with any such filing;
provided, that in the case of (ii), (iii) and (iv), Seller shall take reasonable
actions to provide Buyer with prior written notice.
37. MAXIMUM AGGREGATE PURCHASE PRICE
--------------------------------
The Maximum Aggregate Purchase Price under this Agreement shall initially
equal $400,000,000. The Maximum Aggregate Purchase Price shall be increased to
$500,000,000 upon the occurrence of the following: (i) the Seller shall have
requested such increase in writing to the Buyer no later than ten (10) days
prior to the effective date of such increase, (ii) the Buyer shall have approved
of such increase in its sole discretion, and (iii) the Seller shall have paid to
the Buyer an extension fee in the amount of the Facility Enlargement Fee Amount,
such payment to be made in United States dollars, in immediately available
funds, without deduction, set-off or counterclaim. The Buyer may, in its sole
discretion, net such fee from the proceeds of any Purchase Price payable to the
Seller.
38. NO RECOURSE.
-----------
It is expressly understood and agreed by the parties hereto that (a) this
side letter is executed and delivered by Christiana Bank & Trust Company, not
individually or personally but solely as trustee of the Seller, in the exercise
of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Seller is made and intended not as personal representations, undertakings and
agreements by Christiana Bank & Trust Company but is made and intended for the
purpose for binding only the Seller, (c) nothing herein contained shall be
construed as creating any liability on the Christiana Bank & Trust Company,
individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto and (d) under no circumstances shall the Christiana Bank & Trust Company
be personally liable for the payment of any indebtedness or expenses of the
Seller or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or undertaken by the
Seller under this side letter or any other related documents.
[Signature Page Follows]
IN WITNESS WHEREOF, Seller, Guarantors and Buyer have caused
their names to be signed to this Master Repurchase Agreement by their respective
officers thereunto duly authorized as of the date first above written.
NEW CENTURY FUNDING A, as
Seller
By: Christiana Bank & Trust Company,
not in its individual capacity but
solely as trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name:
--------------------------
Title: Trust Officer
-------------------------
BANK OF AMERICA, N.A., as Buyer
and Agent, as applicable
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name:
---------------------------
Title: Managing Director
--------------------------
Acknowledged and Agreed:
-----------------------
NEW CENTURY MORTGAGE CORPORATION,
as Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name:
---------------------------------------
Title: President
--------------------------------------
NEW CENTURY FINANCIAL CORPORATION,
as Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name:
---------------------------------------
Title: Executive Vice President
--------------------------------------
