Amendment No. 3 to Second Master Repurchase Agreement

Exhibit 10.2

 

EXECUTION VERSION

 

AMENDMENT NO. 3
TO SECOND

 

AmendmentNo. 3, dated as of April 27, 2006 (this “Amendment”), among CREDIT SUISSE FIRST BOSTONMORTGAGE CAPITAL LLC (the “Buyer”),FIELDSTONE MORTGAGE COMPANY (a “Seller”)and FIELDSTONE INVESTMENT CORPORATION (a “Seller” and, together with Fieldstone MortgageCompany, the “Sellers”).

 

RECITALS

 

TheBuyer and the Sellers are parties to that certain Second Amended and Restated, dated as of March 31, 2005, as amended bythat certain Amendment No. 1 to Second , datedas of October 19, 2005 and Amendment No. 2 to Second , dated as of February 22, 2006 (as the same may havebeen amended and supplemented from time to time, the “Existing RepurchaseAgreement” and as amended by this Amendment, the “Repurchase Agreement”). Capitalized terms usedbut not otherwise defined herein shall have the meanings given to them in theExisting Repurchase Agreement.

 

The Buyer and the Sellers have agreed, subject to theterms and conditions of this Amendment, that the Existing Repurchase Agreementbe amended to reflect certain agreed upon revisions to the terms of theExisting Repurchase Agreement.

 

Accordingly, the Buyer and the Sellers hereby agree,in consideration of the mutual premises and mutual obligations set forthherein, that the Existing Repurchase Agreement is hereby amended as follows:

 

SECTION 1.                                Definitions.(a)  Section 2 of the Repurchase Agreement is hereby amended bydeleting the definitions of “Market Value,” “Maximum Aggregate Purchase Price,”“Mortgage Loan,” “Par Percentage,” “Pricing Rate,” “Purchase Price,” “PurchasePrice Percentage,” “Repurchase Date,” and “Termination Date” in their entiretyand replacing the same with the following:

 

1.1                                 ““Market Value”means, with respect to any Purchased Mortgage Loan as of any date, thewhole-loan servicing released fair market value of such Purchased Mortgage Loanon such date as determined by Buyer (or an Affiliate thereof) in its good faithdiscretion. Without limiting the generality of the foregoing, each Selleracknowledges that the Market Value of a Purchased Mortgage Loan may bereduced to zero by Buyer if:

 

(i)                    a materialbreach of a representation, warranty or covenant made by any Seller in thisAgreement with respect to such Purchased Mortgage Loan has occurred and iscontinuing;

 

(ii)                 except as setforth in clause (xv) below, such Purchased Mortgage Loan is a Non-PerformingMortgage Loan;

 

(iii)              a First PaymentDefault occurs with respect to such Purchased Mortgage Loan;

 

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(iv)             such PurchasedMortgage Loan has been released from the possession of the Custodian under theCustodial Agreement (other than to a Take-out Investor pursuant to a BaileeLetter) for a period in excess of ten (10) calendar days;

 

(v)                such PurchasedMortgage Loan has been released from the possession of the Custodian under theCustodial Agreement to a Take-out Investor pursuant to a Bailee Letter for aperiod in excess of 45 calendar days;

 

(vi)             such PurchasedMortgage Loan has been subject to a Transaction for a period of greater than (a) 90days (unless the Mortgage Loan is an Aged Loan or a Portfolio Second LienMortgage Loan) or (b) 180 days with respect to each Aged Loan;

 

(vii)          such Purchased MortgageLoan is a Wet-Ink Mortgage Loan for which the Wet-Ink Mortgage File has notbeen delivered to the Custodian on or prior to the eighth Business Day afterthe related Purchase Date;

 

(viii)       when the Purchase Price forsuch Purchased Mortgage Loan is added to other Purchased Mortgage Loans, theaggregate Purchase Price of all Wet-Ink Mortgage Loans that are PurchasedMortgage Loans exceeds (i) 40% of the Maximum Aggregate Purchase Price forthe first five Business Days and the last five Business Days of each month or (ii) 30%of the Maximum Aggregate Purchase Price for the remainder of the month;

 

(ix)               when added to otherPurchased Mortgage Loans, the aggregate Purchase Price of all Sub-PrimeMortgage Loans that are Purchased Mortgage Loans exceeds $280 million dollars;

 

(x)                  when added toother Purchased Mortgage Loans, the aggregate Purchase Price of all Second LienMortgage Loans and HELOCs that are Purchased Mortgage Loans (other thanPortfolio Second Lien Mortgage Loans) exceeds $60 million dollars;

 

(xi)               when added to otherPurchased Mortgage Loans, the aggregate Purchase Price of all Aged Loans thatare Purchased Mortgage Loans exceeds $200 million dollars;

 

(xii)            when added to otherPurchased Mortgage Loans, the aggregate Purchase Price of all ReperformingMortgage Loans exceeds $8 million dollars;

 

(xiii)         when added to otherPurchased Mortgage Loans, the aggregate Purchase Price of all NegativeAmortizations Loans exceeds $4 million;

 

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(xiv)        when added to otherPurchased Mortgage Loans, the aggregate Purchase Price of all Portfolio SecondLien Mortgage Loans exceeds $150 million;

 

(xv)           when added to otherPurchased Mortgage Loans, the aggregate Purchase Price of all DelinquentMortgage Loans exceeds $7.5 million; or

 

(xvi)        such Purchased MortgageLoan is no longer acceptable for purchase by Buyer (or an Affiliate thereof)under any of the flow purchase or conduit programs for which Sellers then havebeen approved due to a Requirement of Law relating to consumer credit laws orotherwise.”

 

1.2                                 ““Maximum Aggregate Purchase Price” means FOURHUNDRED MILLION DOLLARS ($400,000,000).”

 

1.3                                 ““Mortgage Loan” meansany Sub-Prime Mortgage Loan, Exception Mortgage Loan, Jumbo Mortgage Loan, AltA Mortgage Loan, Portfolio Second Lien Mortgage Loan, Delinquent Mortgage Loan,Reperforming Mortgage Loan, HELOC or Conforming Mortgage Loan which is a closed-end,fixed or floating-rate, first lien or Second Lien Mortgage Loan, on aone-to-four-family residential mortgage evidenced by a promissory note andsecured by a mortgage, which satisfies the requirements set forth in theUnderwriting Guidelines and Section 13(b) hereof which Mortgage Loanthe Custodian has been instructed to hold pursuant to the Custodial Agreement;provided, however, that, except as expressly approved in writing by Buyer,Mortgage Loans shall not include any “high-LTV” loans (i.e., amortgage loan having a loan-to-value ratio in excess of 100% or in excess ofsuch lower percentage set forth in the Underwriting Guidelines or with respectto Second Lien Mortgage Loans, a combined loan-to-value ratio, in excess of thelower of (i) the percentage specified in the Underwriting Guidelines or (ii) 100%)or any High Cost Mortgage Loans and; provided, further, that the originationdate with respect to such Mortgage Loan is no earlier than thirty (30) daysprior to the related Purchase Date.”

 

1.4                                 ““ParPercentage” in the case of MortgageLoans that are:

 

(a)                                  HighPurchase Price Mortgage Loans, 100%;

 

(b)                                 MediumPurchase Price Mortgage Loans, 98%;

 

(c)                                  Low Purchase Price Mortgage Loans, 96%;

 

(d)                                 PortfolioSecond Lien Mortgage Loans, 90%;

 

(e)                                  DelinquentMortgage Loans; 85%; and

 

(f)                                    ExceptionMortgage Loans, a percentage to be determined by Buyer in its sole discretion.”

 

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1.5                                 “Pricing Rate” meansLIBOR plus:

 

(A)                              inthe case of Purchased Mortgage Loans that are High Purchase Price MortgageLoans:

 

(i)                                     0.70%with respect to Transactions the subject of which are Conforming MortgageLoans, Sub-Prime Mortgage Loans, Second Lien Mortgage Loans, HELOCs, JumboMortgage Loans or Alt-A Mortgage Loans (other than Portfolio Second LienMortgage Loans, Aged Loans subject to a Transaction greater than 120 days andWet-Ink Mortgage Loans);

 

(ii)                                  0.75%with respect to Transactions the subject of which are Aged Loans subject to aTransaction greater than 120 days;

 

(iii)                               0.80%with respect to Transactions the subject of which are Wet-Ink Mortgage Loans;

 

(iv)                              0.90%with respect to Transactions the subject of which are Reperforming MortgageLoans;

 

(v)                                 0.95%with respect to Transactions the subject of which are Portfolio Second LienMortgage Loans; and

 

(vi)                              1.00%with respect to Transactions the subject of which are Delinquent MortgageLoans; and

 

(b) in the case ofPurchased Mortgage Loans that are Medium Purchase Price Mortgage Loans:

 

(i)                                     0.60%with respect to Transactions the subject of which are Conforming MortgageLoans, Sub-Prime Mortgage Loans, Second Lien Mortgage Loans, HELOCs, JumboMortgage Loans or Alt-A Mortgage Loans (other than Portfolio Second LienMortgage Loans, Aged Loans subject to a Transaction greater than 120 days andWet-Ink Mortgage Loans);

 

(ii)                                  0.65%with respect to Transactions the subject of which are Aged Loans subject to aTransaction greater than 120 days;

 

(iii)                               0.75%with respect to Transactions the subject of which are Wet-Ink Mortgage Loans;

 

(iv)                              0.80%with respect to Transactions the subject of which are Reperforming MortgageLoans;

 

(v)                                 0.95%with respect to Transactions the subject of which are Portfolio Second LienMortgage Loans; and

 

(vi)                              1.00%with respect to Transactions the subject of which are Delinquent MortgageLoans; and

 

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(c) in the case ofPurchased Mortgage Loans that are Low Purchase Price Mortgage Loans:

 

(i)                                     0.50%with respect to Transactions the subject of which are Conforming MortgageLoans, Sub-Prime Mortgage Loans, Second Lien Mortgage Loans, HELOCs, JumboMortgage Loans or Alt-A Mortgage Loans (other than Portfolio Second LienMortgage Loans, Aged Loans subject to a Transaction greater than 120 days andWet-Ink Mortgage Loans);

 

(ii)                                  0.55%with respect to Transactions the subject of which are Aged Loans subject to aTransaction greater than 120 days;

 

(iii)                               0.70%with respect to Transactions the subject of which are Wet-Ink Mortgage Loans;

 

(iv)                              0.70%with respect to Transactions the subject of which are Reperforming MortgageLoans;

 

(v)                                 0.95%with respect to Transactions the subject of which are Portfolio Second LienMortgage Loans; and

 

(vi)                              1.00%with respect to Transactions the subject of which are Delinquent MortgageLoans.”

 

1.6                                 ““Purchase Price” means (i) onthe Purchase Date, the price at which each Purchased Mortgage Loan istransferred by a Seller to Buyer, which shall not exceed:

 

(a) in the case ofPurchased Mortgage Loans which are Conforming Mortgage Loans, Alt-A MortgageLoans, Second Lien Mortgage Loans, HELOCs, Jumbo Mortgage Loans, PortfolioSecond Lien Mortgage Loans or Delinquent Mortgage Loans, the lesser of (1) theapplicable Purchase Price Percentage for such Purchased Mortgage Loanmultiplied by the Market Value of such Purchased Mortgage Loan and (2) theapplicable Par Percentage for such Purchased Mortgage Loan multiplied by theoutstanding principal balance thereof as set forth on the related Mortgage LoanSchedule; or

 

(b)  in the case ofPurchased Mortgage Loans which are Sub-Prime Mortgage Loans, the applicablePurchase Price Percentage for such Sub-Prime Mortgage Loan multiplied by thelesser of (1) the outstanding principal balance thereof as set forth onthe related Mortgage Loan Schedule and (2) the Market Value of suchSub-Prime Mortgage Loan; or

 

(ii) after the applicable Purchase Date, exceptwhere Buyer and the Sellers agree otherwise, such price decreased by the amountof any cash transferred by the Sellers to Buyer pursuant to Section 6(c) hereofor applied to reduce the Sellers’ obligations under clause (ii) of Section 4(b) hereof.”

 

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1.7                                 ““Purchase Price Percentage”means:

 

(a)                                  inthe case of Mortgage Loans, that are High Purchase Price Mortgage Loans, thefollowing percentage, as applicable:

 

(i)                                     99%with respect to Purchased Mortgage Loans that are first lien ConformingMortgage Loans, Jumbo Mortgage Loans or Alt A Mortgage Loans;

 

(ii)                                  98%with respect to Purchased Mortgage Loans that are Sub-Prime Mortgage Loans;

 

(iii)                               95%with respect to Purchased Mortgage Loans that are Second Lien Mortgage Loans orHELOCs (other than Portfolio Second Lien Mortgage Loans);

 

(iv)                              90%with respect to Purchased Mortgage Loans that are Portfolio Second LienMortgage Loans;

 

(v)                                 85%with respect to Purchased Mortgage Loans that are Delinquent Mortgage Loans;and

 

(vi)                              withrespect to Transactions the subject of which are Exception Mortgage Loans, apercentage to be determined by Buyer in its sole discretion; and

 

(b) in the case ofMortgage Loans that are Medium Purchase Price Mortgage Loans, thefollowing percentage, as applicable:

 

(i)                                     97%with respect to Purchased Mortgage Loans that are first lien ConformingMortgage Loans, Jumbo Mortgage Loans or Alt A Mortgage Loans;

 

(ii)                                  96%with respect to Purchased Mortgage Loans that are Sub-Prime Mortgage Loans;

 

(iii)                               93%with respect to Purchased Mortgage Loans that are Second Lien Mortgage Loans orHELOCs (other than Portfolio Second Lien Mortgage Loans); and

 

(iv)                              90%with respect to Purchased Mortgage Loans that are Portfolio Second LienMortgage Loans;

 

(v)                                 85%with respect to Purchased Mortgage Loans that are Delinquent Mortgage Loans;and

 

(vi)                              withrespect to Transactions the subject of which are Exception Mortgage Loans, apercentage to be determined by Buyer in its sole discretion; and

 

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(c) in the case ofMortgage Loans that are Low Purchase Price Mortgage Loans, thefollowing percentage, as applicable:

 

(i)                                     95%with respect to Purchased Mortgage Loans that are first lien ConformingMortgage Loans, Jumbo Mortgage Loans or Alt A Mortgage Loans;

 

(ii)                                  94%with respect to Purchased Mortgage Loans that are Sub-Prime Mortgage Loans;

 

(iii)                               91%with respect to Purchased Mortgage Loans that are Second Lien Mortgage Loans orHELOCs (other than Portfolio Second Lien Mortgage Loans);

 

(iv)                              90%with respect to Purchased Mortgage Loans that are Portfolio Second LienMortgage Loans;

 

(v)                                 85%with respect to Purchased Mortgage Loans that are Delinquent Mortgage Loans;and

 

(vi)                              withrespect to Transactions the subject of which are Exception Mortgage Loans, apercentage to be determined by Buyer in its sole discretion.”

 

1.8                                 ““Repurchase Date” meansthe earlier of (i) the Termination Date, (ii) the date set forth inthe applicable Purchase Confirmation which shall be no later than 180 daysfollowing the date on which the Purchased Assets are transferred by a Seller tothe Buyer, (iii) the date determined by application of Section 16hereof or (iv) the date identified to Buyer by a Seller as the date thatthe related Mortgage Loan is to be sold pursuant to a Take-out Commitment. Notwithstandingthe foregoing, with respect to any Portfolio Second Lien Mortgage Loan, thedate specified pursuant to clause (ii) above may be later than such180 days so long as such date is not later than the date set forth in clause (a) ofthe definition of “Termination Date”.”

 

1.9                                 ““TerminationDate” means the earlier of (a) April 23, 2007 or (b) thedate of the occurrence of an Event of Default.”

 

(b)                                 Section 2of the Repurchase Agreement is hereby amended by adding the followingdefinitions:

 

1.10                           ““DelinquentMortgage Loan” means any Mortgage Loan (i) for which any payment ofprincipal or interest is more than thirty (30) days and less than ninety (90)days past due.”

 

1.11                           ““PortfolioSecond Lien Mortgage Loan” means any Second Lien Mortgage Loan (i) thatis designated as such on the related Mortgage Loan Schedule by the relatedSeller, (ii) that is not a Delinquent Mortgage Loan at the time it becomesa Purchased

 

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Mortgage Loan, and (iii) doesnot become 60 days or more delinquent while such Mortgage Loan is a PurchasedMortgage Loan.”

 

SECTION 2.                                ConditionsPrecedent. This Amendment shall become effective on April 27, 2006(the “Amendment Effective Date”),subject to the satisfaction of the following conditions precedent:

 

2.1                                 DeliveredDocuments. On the Amendment Effective Date, the Buyer shall have receivedthe following documents, each of which shall be satisfactory to the Buyer in form andsubstance:

 

(a)                                  thisAmendment, executed and delivered by a duly authorized officer of the Buyer andSellers;

 

(b)                                 suchother documents as the Buyer or counsel to the Buyer may reasonablyrequest.

 

SECTION 3.                                Representationsand Warranties. Each of the Sellers hereby represents and warrants to theBuyer that they are in compliance with all the terms and provisions set forthin the Repurchase Agreement on their part to be observed or performed, andthat no Event of Default has occurred or is continuing, and hereby confirm andreaffirm the representations and warranties contained in Section 13 of theExisting Repurchase Agreement.

 

SECTION 4.                                LimitedEffect. Except as expressly amended and modified by this Amendment, theRepurchase Agreement shall continue to be, and shall remain, in full force andeffect in accordance with its terms.

 

SECTION 5.                                Counterparts.This Amendment may be executed by each of the parties hereto on any numberof separate counterparts, each of which shall be an original and all of whichtaken together shall constitute one and the same instrument.

 

SECTION 6.                                  GOVERNINGLAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAWPROVISIONS THEREOF.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties have caused theirnames to be signed hereto by their respective officers thereunto dulyauthorized as of the day and year first above written.

 

 

Buyer:

CREDIT SUISSE FIRST BOSTON

 

MORTGAGE CAPITAL LLC,

 

as Buyer

 

 

 

 

 

By:

/s/ Bruce S. Kaiserman

 

 

Name: Bruce S. Kaiserman

 

 

Title: Vice President

 

 

 

 

 

 

Seller:

FIELDSTONE MORTGAGE COMPANY,

 

as Seller

 

 

 

 

 

By:

/s/ Mark C. Krebs

 

 

Name: Mark C. Krebs

 

 

Title: Sr. Vice President & Treasurer

 

 

 

 

 

 

Seller:

FIELDSTONE INVESTMENT
CORPORATION,

 

as Seller

 

 

 

 

 

By:

/s/ Mark C. Krebs

 

 

Name: Mark C. Krebs

 

 

Title: Sr. Vice President & Treasurer