Amendment No. 6 to Master Repurchase Agreement

Exhibit 10.1

 

AMENDMENTNO. 6
TO

 

This SIXTHAMENDMENT TO (this “Amendment”)is dated as of April 24, 2006 and is entered into by and among FIELDSTONEINVESTMENT CORPORATION (“FIC” and a “Seller”), FIELDSTONEMORTGAGE COMPANY (“FMC” and a “Seller”, and together with FIC,the “Sellers”) and MERRILL LYNCH BANK USA (the “Buyer”) to thatcertain dated as of November 12, 2004 as amended byAmendment No. 1 to dated as of May 10, 2005, AmendmentNo. 2 to dated as of June 1, 2005, Amendment No. 3to dated as of July 11, 2005, Amendment No. 4 to dated as of November 9, 2005 and Amendment No. 5 to dated as of December 6, 2005 (the “ExistingRepurchase Agreement”, as amended by this Amendment, the “RepurchaseAgreement”). Capitalized terms used but not otherwise defined herein shallhave the meanings given to them in the Existing Repurchase Agreement.

 

RECITALS

 

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 promises and mutual obligations set forthherein, that the Existing Repurchase Agreement is hereby amended as follows:

 

SECTION 1.           DelinquentMortgage Loans. The Existing Repurchase Agreement is hereby amended bydeleting all references to the term “Delinquent Mortgage Loan

 

SECTION 2.           Definitions.Section 2 of the Existing Repurchase Agreement is hereby amended by:

 

2.1           addingthe following defined terms in the proper alphabetical order:

 

““CashFlow Velocity” shall mean, with respect to a Mortgage Loan, the number ofMonthly Payments paid during a Test Period divided by the total number ofMonthly Payments owed during such Test Period.”

 

““Forbearance Plan” shall mean a writtenrepayment plan or forbearance agreement giving the Mortgagor a definite periodin which to reinstate a Mortgage Loan, no more than one (1) year from theestablishment of the repayment plan or forbearance agreement.”

 

““Foreclosure”shall mean a Mortgage Loan, the property securing which is in the process ofbeing foreclosed upon by a Seller.”

 



 

““MortgageLoan in Foreclosure” shall mean a Mortgage Loan in the process ofForeclosure.”

 

““Non-Performing Mortgage Loan” shall mean, aMortgage Loan which has been repurchased by the Seller as part of a clean-upcall invoked in connection with a securitization for which as of the date ofdetermination any Monthly Payment is 90 days or more past due.”

 

““Performing Mortgage Loan” shall mean, as of anydate of determination, a first or second lien, fixed or adjustable rateMortgage Loan which has a Cash Flow Velocity of 1.00.”

 

““Re-Performing Mortgage Loan” shall mean, afirst or second lien, fixed or adjustable rate Mortgage Loan which has beenrepurchased by the Seller as part of a clean-up call invoked in connection witha securitization for which as of the date of determination has a Cash FlowVelocity of 0.75 or higher.”

 

““Sub-Performing Mortgage Loan” shall mean, aMortgage Loan which has been repurchased by the Seller as part of a clean-upcall invoked in connection with a securitization for which as of the date ofdetermination (a) has a Cash Flow Velocity of less than 0.75 and (b) forwhich any Monthly Payment is less than ninety (90) days past due.”

 

““TestPeriod” means any four (4) consecutive calendar months.”

 

2.2           deletingthe definitions of “Asset Value”, “Maximum Purchase Price”, “Pricing Spread”, “PurchasePrice” and “Purchase Price Percentage”in their entirety and replacing them with the following:

 

“Asset Value”shall mean with respect to each Eligible Mortgage Loan, the applicable PurchasePrice Percentage for the related Purchased Mortgage Loan multiplied by thelesser of (1) the Market Value of such Mortgage Loan and (2) theoutstanding principal balance of such Mortgage Loan.

 

(a)           Withoutlimiting the generality of the foregoing, the Sellers acknowledge that theAsset Value of a Purchased Mortgage Loan may be reduced to zero by the Buyerif:

 

(i)    such PurchasedMortgage Loan ceases to be an Eligible Mortgage Loan;

 

(ii)   the PurchasedMortgage Loan has been released from the possession of the Custodian under theCustodial Agreement (other than to a Takeout Investor pursuant to a BaileeLetter) for a period in excess of 15 calendar days;

 

(iii)  thePurchased Mortgage Loan is a Wet-Ink Mortgage Loan for which the relatedMortgage File has not been received and certified by the Custodian by theeighth Business Day following the related Purchase Date;

 

(iv)  such PurchasedMortgage Loan has been foreclosed upon or otherwise converted to a real estateowned property;

 

(v)   such PurchasedMortgage Loan is rejected by the related Takeout Investor;

 

2



 

(vi)  such PurchasedMortgage Loan (other than a Sub-Performing Mortgage Loan, Non-PerformingMortgage Loan, Re-Performing Mortgage Loan or Mortgage Loan in Foreclosure) hasbeen subject to a Transaction hereunder for period of greater than 150 days;

 

(vii) suchPurchased Mortgage Loan is a Sub-Performing Mortgage Loan, Non-PerformingMortgage Loan, Re-Performing Mortgage Loan or Mortgage Loan in Foreclosure thathas been subject to a Transaction hereunder for period of greater than 360days;

 

(viii)  theBuyer has determined in its commercially reasonable discretion that thePurchased Mortgage Loan (other than with respect to any Mortgage Loan inForeclosure) is not eligible for whole loan sale or securitization in atransaction consistent with the prevailing sale and securitization industrywith respect to substantially similar Mortgage Loans;

 

(ix)   such PurchasedMortgage Loan contains a breach of a representation or warranty made by aSeller in this Repurchase Agreement or the Custodial Agreement;

 

(b)           the aggregateAsset Value of all D Quality Non-Conforming Mortgage Loans that are PurchasedMortgage Loans shall not exceed $5,000,000;

 

(c)           theaggregate Asset Value of all Purchased Mortgage Loans with a CLTV in excess of100% shall not exceed $5,000,000;

 

(d)           theaggregate Asset Value of all Land-and-Home Contractsshall not exceed $10,000,000;

 

(e)           theaggregate Asset Value of all Wet-Ink Mortgage Loans that are Purchased MortgageLoans shall not exceed $100,000,000;

 

(f)            theaggregate Asset Value of all Second Lien Mortgage Loans that are PurchasedMortgage Loans shall not exceed $75,000,000;

 

(g)           theaggregate Asset Value of all Balloon Loans thatare Purchased Mortgage Loans shall not exceed $50,000,000;

 

(h)           theaggregate Asset Value of all Mortgage Loans in Foreclosure, Non-PerformingMortgage Loans, Sub-Performing Mortgage Loans and Re-Performing Mortgage Loans,combined, that are Purchased Mortgage Loans shall not exceed $150,000,000;

 

(i)            theaggregate Asset Value of all Sub-Performing Mortgage Loans that are PurchasedMortgage Loans shall not exceed $100,000,000;

 

(j)            theaggregate Asset Value of all Re-Performing Mortgage Loans that are PurchasedMortgage Loans shall not exceed $100,000,000;

 

3



 

(k)           the aggregateAsset Value of all Non-Performing Mortgage Loans that are Purchased MortgageLoans shall not exceed $75,000,000;

 

(l)            theaggregate Asset Value of all Mortgage Loans in Foreclosure that are PurchasedMortgage Loans shall not exceed $35,000,000.

 

““Maximum Purchase Price” shall mean$300,000,000.”

 

““Pricing Spread”shall mean:

 

(a)           withrespect to Transactions the subject of which are High Purchase Price MortgageLoans which are:

 

(i)            MortgageLoans other than Wet-Ink Mortgage Loans, Re-Performing Mortgage Loans,Sub-Performing Mortgage Loans, Non-Performing Mortgage Loans or Mortgage Loansin Foreclosure, 0.80%; or

 

(ii)           Wet-InkMortgage Loans, 1.125%.

 

(b)           withrespect to Transactions the subject of which are Low Purchase Price MortgageLoans which are:

 

(i)            MortgageLoans other than Wet-Ink Mortgage Loans, Re-Performing Mortgage Loans,Sub-Performing Mortgage Loans, Non-Performing Mortgage Loans or Mortgage Loansin Foreclosure, 0.625%; or

 

(ii)           Wet-InkMortgage Loans, 1.00%;

 

(c)           withrespect to Transactions the subject of which are Re-Performing Mortgage Loans,0.90%;

 

(d)           withrespect to Transactions the subject of which are Sub-Performing Mortgage Loans,1.375%;

 

(e)           withrespect to Transactions the subject of which are Non-Performing Mortgage Loans,1.75%;

 

(f)            withrespect to Transactions the subject of which are Mortgage Loans in Foreclosure,2.00%.

 

In no event shallthe following Mortgage Loans be considered High Purchase Price Mortgage Loansor Low Purchase Price Mortgage Loans: Re-Performing Mortgage Loans, Sub-Performing Mortgage Loans,Non-Performing Mortgage Loans or Mortgage Loans in Foreclosure. Such MortgageLoans shall be excluded from Sellers’ election under Section 3(c).

 

““Purchase Price”shall mean:

 

4



 

(a)           on thePurchase Date, the price at which each Purchased Mortgage Loan (other thanSub-Performing Mortgage Loans, Non-Performing Mortgage Loans, Re-PerformingMortgage Loans or Mortgage Loans in Foreclosure) is transferred by a Seller tothe Buyer which shall equal the applicable Purchase Price Percentage multipliedby the lesser of (i) the Market Value of such Mortgage Loan on thePurchase Date and (ii) the outstanding principal balance of the MortgageLoan;

 

(b)           on thePurchase Date, the price at which each Purchased Mortgage Loan that is aRe-Performing Mortgage Loan, Non-Performing Mortgage Loan, Sub-PerformingMortgage Loan or Mortgage Loan in Foreclosure is transferred by a Seller to theBuyer which shall equal the applicable Purchase Price Percentage multiplied bythe lesser of (x) the Market Value of such Mortgage Loan on the PurchaseDate and (y) the acquisition price paid by the Seller in acquiring such MortgageLoan; and

 

(c)           thereafter,except where the Buyer and a Seller agree otherwise, such Purchase Pricedecreased by the amount of any cash, Income and Periodic Advance RepurchasePayments actually received by the Buyer pursuant to Sections 5 or applied toreduce a Seller’s obligations under Section 4(b) hereof.”

 

““Purchase Price Percentage”shall mean:

 

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

 

(i)            withrespect to each Mortgage Loan which is a Wet-Ink Mortgage Loan (other than aConforming Mortgage Loan or Jumbo Mortgage Loan, that, in either case, is aWet-Ink Mortgage Loan), 93%;

 

(ii)           withrespect to each Mortgage Loan which is a Wet-Ink Mortgage Loan that is either aConforming Mortgage Loan or Jumbo Mortgage Loan, 95%;

 

(iii)          withrespect to each Mortgage Loan (other than a Conforming Mortgage Loan, JumboMortgage Loan, Wet-Ink Mortgage Loan, Re-Performing Mortgage Loan,Sub-Performing Mortgage Loan, Non-Performing Mortgage Loan or Mortgage Loan inForeclosure), 97%; and

 

(iv)          withrespect to each Mortgage Loan which is a Conforming Mortgage Loan or a JumboMortgage Loan (other than a Wet-Ink Mortgage Loan, Re-Performing Mortgage Loan,Sub-Performing Mortgage Loan, Non-Performing Mortgage Loan or Mortgage Loan inForeclosure), 98%.

 

(b)           in thecase of Mortgage Loans, that are Low Purchase Price Mortgage Loans, thefollowing percentage, as applicable:

 

(i)            withrespect to each Mortgage Loan which is a Wet-Ink Mortgage Loan (other than aConforming Mortgage Loan or Jumbo Mortgage Loan, that, in either case, is aWet-Ink Mortgage Loan), 91%;

 

5



 

(ii)           withrespect to each Mortgage Loan which is a Wet-Ink Mortgage Loan that is either aConforming Mortgage Loan or Jumbo Mortgage Loan, 93%;

 

(iii)          withrespect to each Mortgage Loan (other than a Conforming Mortgage Loan, JumboMortgage Loan, Wet-Ink Mortgage Loan, Re-Performing Mortgage Loan,Sub-Performing Mortgage Loan, Non-Performing Mortgage Loan or Mortgage Loan inForeclosure), 95%; and

 

(iv)          with respectto each Mortgage Loan which is a Conforming Mortgage Loan or a Jumbo MortgageLoan (other than a Wet-Ink Mortgage Loan, Re-Performing Mortgage Loan,Sub-Performing Mortgage Loan, Non-Performing Mortgage Loan or Mortgage Loan inForeclosure), 96%.”

 

(c)           withrespect to each Mortgage Loan which is a Mortgage Loan in Foreclosure, 80%.

 

(d)           withrespect to each Mortgage Loan which is a Non-Performing Mortgage Loan, 85%.

 

(e)           withrespect to each Mortgage Loan which is a Sub-Performing Mortgage Loan, 90%.

 

(f)            withrespect to each Mortgage Loan which is a Re-Performing Mortgage Loan, 90%.

 

In no event shall the following Mortgage Loans beconsidered High Purchase Price Mortgage Loans or Low Purchase Price MortgageLoans:  Re-Performing Mortgage Loans, Sub-PerformingMortgage Loans, Non-Performing Mortgage Loans or Mortgage Loans in Foreclosure.Such Mortgage Loans shall be excluded from Sellers’ election under Section3(c).

 

SECTION 3.           Exhibits.Exhibit V of the Existing Repurchase Agreement is hereby amended bydeleting it in its entirety and replacing it with Exhibit A attachedhereto.

 

SECTION 4.           ConditionsPrecedent. This Amendment shall become effective on April 24, 2006 (the “AmendmentEffective Date”) subject to the satisfaction of the following conditionsprecedent:

 

4.1           DeliveredDocuments. On the Amendment Effective Date, the Buyer shall have receivedthe following documents, each of which shall be satisfactory to the Buyer inform and substance:

 

(a)           thisAmendment, executed and delivered and duly authorized officers of the Buyer andthe Sellers; and

 

(b)           such otherdocuments as the Buyer or counsel to the Buyer may reasonably request.

 

6



 

4.2           CommitmentFee. Payment of Commitment Fee.

 

SECTION 5.           LimitedEffect. Except as expressly amended and modified by this Amendment, theExisting Repurchase Agreement shall continue to be, and shall remain, in fullforce and effect in accordance with its terms.

 

SECTION 6.           Fees.The Sellers agree to pay as and when billed by the Buyer all of the reasonablefees, disbursements and expenses of counsel to the Buyer in connection with thedevelopment, preparation and execution of, this Amendment or any otherdocuments prepared in connection herewith and receipt of payment thereof shallbe a condition precedent to the Buyer entering into any Transaction pursuanthereto.

 

SECTION 7.           Confidentiality.The parties hereto acknowledge that this Amendment, the Existing RepurchaseAgreement, and all drafts thereof, documents relating thereto and transactionscontemplated thereby are confidential in nature and the Seller agree that,unless otherwise directed by a court of competent jurisdiction or as isnecessary to do so in working with governmental agencies or regulatory bodies inorder to comply with any applicable federal or state laws, they shall limit thedistribution of such documents and the discussion of such transactions to suchof its officers, employees, attorneys, accountants and agents as is required inorder to fulfill its obligations under such documents and with respect to suchtransactions.

 

SECTION 8.           GOVERNING LAW. THIS AMENDMENT SHALL BECONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THEOBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINEDIN ACCORDANCE WITH SUCH LAWS.

 

SECTION 9.           Counterparts.This Amendment may be executed in one or more counterparts and by differentparties hereto on separate counterparts, each of which, when so executed, shallconstitute one and the same agreement.

 

SECTION 10.         Conflicts.The parties hereto agree that in the event there is any conflict between theterms of this Amendment, and the terms of the Existing Repurchase Agreement,the provisions of this Amendment shall control.

 

[SIGNATURE PAGEFOLLOWS]

 

7



 

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:

MERRILL LYNCH BANK USA,

 

as Buyer

 

 

 

 

 

 

 

By:

/s/ James B. Cason

 

 

Name: James B. Cason

 

 

Title: Vice President

 

 

 

 

 

 

Seller:

FIELDSTONE INVESTMENT
CORPORATION,

 

as Seller

 

 

 

 

 

 

 

By:

/s/ Mark C. Krebs

 

 

Name: Mark C. Krebs

 

 

Title: Sr. Vice President & Treasurer

 

 

 

 

 

 

Seller:

FIELDSTONE MORTGAGE COMPANY,

 

as Seller

 

 

 

 

 

 

 

By:

/s/ Mark C. Krebs

 

 

Name: Mark C. Krebs

 

 

Title: Sr. Vice President & Treasurer