Exhibit 10.1

 

EXECUTION VERSION

 

OAKS MORTGAGE TRUST SERIES 2015-1

MORTGAGE PASS-THROUGH CERTIFICATES

 

MORTGAGE LOAN PURCHASE AND SALE AGREEMENT

 

Between

 

FIVE OAKS ACQUISITION CORP.

 

and

 

OAKS FUNDING LLC

 

dated as of April 30, 2015

 

 

 

 

TABLE OF CONTENTS

 

Section 1. Representations and Warranties of the Depositor 1 Section 2.
Representations and Warranties of Five Oaks 1 Section 3. Representations,
Warranties and Agreements of Five Oaks with respect to the Mortgage Loans 3
Section 4. Arbitration with respect to Remedies by Five Oaks 4 Section 5.
Conveyance of Mortgage Loans 5 Section 6 Intention of Parties 6 Section 7.
Termination 7 Section 8. Miscellaneous 7 Schedule A. Mortgage Loan Schedule A-1

 

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MORTGAGE LOAN PURCHASE AND SALE AGREEMENT

 

This Mortgage Loan Purchase and Sale Agreement (the “Agreement”) is made as of
April 30, 2015, by and between Five Oaks Acquisition Corp., a Delaware
corporation (“Five Oaks” or the “Seller”), Oaks Funding LLC, a Delaware limited
liability company (the “Depositor”). Capitalized terms used herein but not
defined herein shall have the meanings assigned to them in the Pooling and
Servicing Agreement dated as of April 1, 2015 (the “Pooling and Servicing
Agreement”) among the Depositor, Christiana Trust, a division of Wilmington
Savings Fund Society, FSB as trustee (the “Trustee”), and Wells Fargo Bank, N.A.
as master servicer and securities administrator.

 

WHEREAS, the parties hereto desire to provide for the purchase and sale of the
Mortgage Loans identified on Schedule A hereto (the “Mortgage Loans”) on the
date hereof (the “Closing Date”) in accordance with the terms and conditions set
forth in this Agreement.

 

NOW, THEREFORE, the parties in consideration of good and valuable and fair
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, hereby agree as follows:

 

Section 1.  Representations and Warranties of the Depositor. The Depositor
hereby represents, warrants and agrees for the benefit of the other party that:

 

(a)          Authorization. The execution, delivery and performance of this
Agreement by it are within its respective powers and have been duly authorized
by all necessary action on its part.

 

(b)          No Conflict. The execution, delivery and performance of this
Agreement will not violate or conflict with (i) its charter or bylaws, (ii) any
resolution or other corporate action by it, or (iii) any decisions, statutes,
ordinances, rulings, directions, rules, regulations, orders, writs, decrees,
injunctions, permits, certificates or other requirements of any court or other
governmental or public authority in any way applicable to or binding upon it,
and will not result in or require the creation, except as provided in or
contemplated by this Agreement, of any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind upon the Mortgage Loans.

 

(c)          Binding Obligation. This Agreement has been duly executed by it and
is its legally valid and binding obligation, enforceable against it in
accordance with this Agreement’s terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general principles of equity.

 

Section 2.  Representations and Warranties of Five Oaks. Five Oaks hereby
represents, warrants and agrees that:

 

(a)          Authorization. The execution, delivery and performance of this
Agreement by it are within its respective powers and have been duly authorized
by all necessary action on its part.

 

(b)          No Conflict. The execution, delivery and performance of this
Agreement will not violate or conflict with (i) its charter or bylaws, (ii) any
resolution or other corporate action by it, or (iii) any decisions, statutes,
ordinances, rulings, directions, rules, regulations, orders, writs, decrees,
injunctions, permits, certificates or other requirements of any court or other
governmental or public authority in any way applicable to or binding upon it,
and will not result in or require the creation, except as provided in or
contemplated by this Agreement, of any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind upon the Mortgage Loans.

 

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(c)          Binding Obligation. This Agreement has been duly executed by it and
is its legally valid and binding obligation, enforceable against it in
accordance with this Agreement’s terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally, and by general principles of equity.

 

(d)          No Consent. The execution, delivery and performance by it of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given or
made.

 

(e)          No Litigation. There is no action, suit, proceeding, or inquiry
before or by any court or governmental body now pending or threatened against
the Seller which, either individually or collectively, would prevent the Seller
from entering into this Agreement or that would have a material adverse effect
on its ability to perform its obligations under this Agreement.

 

(f)           No Material Default. It is not in default under any agreement,
contract or instrument to which it is a party or to which it or its asset are
bound, unless such default would not materially and adversely affect its ability
to perform under the purchase agreement and no event has occurred that, with
notice or lapse of time or both would constitute a default, under, or a breach
of, any such contract, agreement or other instrument which violation, breach or
default would materially and adversely affect its ability to perform its
obligations under this Agreement.

 

(g)          Sale Treatment. The Seller will treat the conveyance of the
Mortgage Loans under this Agreement as a sale for tax and accounting purposes.

 

(h)          Solvency. The Seller is solvent and will not become insolvent as a
result of the sale of the Mortgage Loans. The Seller is not selling the Mortgage
Loans with the intent to hinder, delay or defraud any of the Seller’s creditors.

 

(i)           No Broker. The Seller has not dealt with any broker, investment
banker, agent, or any other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans.

 

(j)           No Judgments or Tax Liens.   The Seller is not aware of any
judgment or tax lien filing against itself.

 

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Section 3.  Representations, Warranties and Agreements of Five Oaks with respect
to the Mortgage Loans.

 

Five Oaks represents and warrants to, and agrees with, the Depositor that Five
Oaks shall cure the breach, or repurchase or substitute for any Mortgage Loan as
to which there has been an uncured breach of a representation or warranty
restated by an Originator to the Trustee pursuant to the related AAR Agreement
that materially and adversely affects the value of such Mortgage Loan or the
interest of the Issuing Entity in such Mortgage Loan, but only if each of the
following conditions is met: (i) the related Originator fails to cure such
breach or repurchase or substitute for such Mortgage Loan after a valid demand
has been made and remains unresolved and (ii) the related Originator is subject
to a bankruptcy or insolvency proceeding or such Originator is no longer in
existence. In addition, with respect to a breach of a representation or warranty
restated by an Originator that materially and adversely affects the value of a
Mortgage Loan or the interest of the Issuing Entity in such Mortgage Loan, Five
Oaks hereby agrees to cure the breach, or repurchase or substitute for any such
Mortgage Loan when a representation and warranty restated by the related
Originator to the Trustee was true and correct as of the date that the related
Originator is restating the representations and warranties to the Trustee (if
such date is prior to the Closing Date), but not true and correct as of the
Closing Date. In any AAR Agreement where the related Originator restated
representations and warranties to the Trustee as of the Closing Date, the Seller
shall not have the obligations described in the prior sentence with respect to
such restated representations and warranties.

 

Any exceptions identified at the time Five Oaks purchased a Mortgage Loan from
an Originator or other third party shall not be considered a breach of the
underwriting guidelines representation and warranty provided that such
exceptions and the related compensating factors are accurately described in the
exhibit to the related purchase price and terms letter, trade confirmation or
other document that identifies the exceptions at the time of such purchase by
Five Oaks.

 

In addition, in no event shall any obligation which the Seller may have to cure,
repurchase or substitute for any Mortgage Loans for which there has been a
breach of any representation and warranty survive (to the extent such obligation
has not expired earlier) beyond the earlier of (a) the termination of the Trust
Fund and (b) the payment of all amounts due on the related Mortgage Loan.

 

Any substitution must be done within two years of the Closing Date.

 

Five Oaks hereby represents and warrants to, and agrees with, the Depositor that
(i) on the Closing Date, Five Oaks will have good, valid and marketable title to
the Mortgage Loans, in each case free and clear of all liens, mortgages, deeds
of trust, pledges, security interests, charges, encumbrances or other claims and
(ii) upon transfer to the Depositor, the Depositor will receive good, valid and
marketable title to all of the Mortgage Loans, in each case free and clear of
any liens, mortgages, deeds of trust, pledges, security interests, charges,
encumbrances or other claims.

 

Five Oaks hereby represents and warrants for the benefit of the Depositor and
the Trustee that: (i) this Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Mortgage Loans in favor of
the Depositor, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from Five Oaks; (ii)
the Mortgage Notes constitute “instruments” within the meaning of the applicable
UCC; (iii) Five Oaks, immediately prior to its transfer of Mortgage Loans under
this Agreement, will own and have good, valid and marketable title to the
Mortgage Loans free and clear of any Lien, claim or encumbrance of any Person;
(iv) Five Oaks has received all consents and approvals required by the terms of
the Mortgage Loans to the sale of the Mortgage Loans hereunder to the Depositor;
(v) all original executed copies of each Mortgage Note that constitute or
evidence the Mortgage Loans have been delivered to the Custodian (as assignee of
the Depositor); (vi) Five Oaks has received a written acknowledgment from the
Custodian that the Custodian is holding the Mortgage Notes that constitute or
evidence the Mortgage Loans solely on behalf and for the benefit of the
Depositor or its assignee; (vii) other than the security interest granted to the
Depositor pursuant to this Agreement and security interests (if any) granted to
lenders which will be automatically released on the Closing Date, Five Oaks has
not pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Mortgage Loans; Five Oaks has not authorized the filing of
and is not aware of any financing statements against it that include a
description of collateral covering the Mortgage Loans other than any financing
statement relating to the security interest granted to the Depositor hereunder
or that will be automatically released upon the sale to the Depositor; (viii)
Five Oaks is not aware of any judgment or tax lien filing against itself; and
(ix) none of the Mortgage Notes that constitute or evidence the Mortgage Loans
have any marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Depositor.

 

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In the event of any cure, repurchase or substitution obligations of Five Oaks
specified in this Section 3, Five Oaks will cure the breach, or repurchase or
substitute for such Mortgage Loan pursuant to Section 2.04 of the Pooling and
Servicing Agreement, this Section 3 and Section 4 below and in accordance with
the timing requirements set forth in this Section 3 and Section 2.04 and Section
2.05 of the Pooling and Servicing Agreement.

 

Solely to the extent Five Oaks is specifically required to correct or cure a
breach pursuant to this Section 3, Five Oaks shall cure or cause the cure of
such breach within 90 days from the earlier of the date that Five Oaks
discovered or was notified of such breach, and if Five Oaks does not cure or
cause the cure of such breach in all material respects during such period, Five
Oaks shall repurchase at the related Repurchase Price set forth in the Pooling
and Servicing Agreement, or substitute for, that Mortgage Loan from the Trust
Fund on or prior to the Determination Date following the expiration of such
90-day period; provided, however, that, in connection with any such breach that
could not reasonably have been cured within such 90-day period, Five Oaks shall
repurchase or substitute the Mortgage Loan no later than 120 days after its
discovery or notice of such breach, and provided further, that, if such breach
would cause the Mortgage Loan to be other than a “qualified mortgage” (as
defined in the Code), then notwithstanding the previous provisions of this
paragraph, Five Oaks shall repurchase or substitute the Defective Mortgage Loan
within 60 days from the date the defect was discovered.

 

Section 4. Arbitration with respect to Remedies by Five Oaks.

 

(a)          Five Oaks and the Depositor agree that the resolution of any
controversy or claim arising out of or relating to an obligation or alleged
obligation of Five Oaks to cure, repurchase or substitute a Mortgage Loan or
Mortgage Loans pursuant to Section 3 above shall be by Arbitration administered
by the American Arbitration Association. If any such controversy or claim has
not been resolved to the satisfaction of both Five Oaks and the Depositor,
either party may commence Arbitration to resolve the dispute; provided that a
party may commence Arbitration with respect to one or more unresolved
allegations only during the months of January, April, July and October, and all
matters with respect to which Arbitration has been commenced in any such month
shall be heard in a single Arbitration in the immediately following month or as
soon as practicable thereafter; and provided further that if any Arbitration
arising out of or relating to an obligation or alleged obligation of an
Originator to repurchase a Mortgage Loan relating to the same representation and
warranty has commenced and is continuing, then such Arbitration shall be joined
with the Arbitration commenced hereunder.

 

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(b)          To commence Arbitration, the moving party shall deliver written
notice to the other party that it has elected to pursue Arbitration in
accordance with this Section 4, provided that if Five Oaks has not responded to
the Depositor's notification of a breach of a representation and warranty, the
Depositor shall not commence Arbitration with respect to that breach before 60
days following delivery of such notice in order to provide Five Oaks with an
opportunity to respond to such notification. Within 10 Business Days after a
party has provided notice that it has elected to pursue Arbitration, each party
may submit the names of one or more proposed Arbitrators to the other party in
writing. If the parties have not agreed on the selection of an Arbitrator within
5 Business Days after the first such submission, then the party commencing
Arbitration shall, within the next 5 Business Days, notify the American
Arbitration Association in New York, New York and request that it appoint a
single Arbitrator with experience in arbitrating disputes arising in the
financial services industry.

 

(c)          It is the intention of the parties that Arbitration shall be
conducted in as efficient and cost-effective a manner as is reasonably
practicable, without the burden of discovery. Accordingly, the Arbitrator will
resolve the dispute on the basis of a review of the written correspondence
between the parties (including any supporting materials attached to such
correspondence) conveyed by the parties to each other in connection with the
dispute prior to the delivery of notice to commence Arbitration; however, upon a
showing of good cause, a party may request the Arbitrator to direct the
production of such additional information, evidence and/or documentation from
the parties that the Arbitrator deems appropriate. If requested by the
Arbitrator or any party, any hearing with respect to an Arbitration shall be
conducted by video conference or teleconference, except upon the agreement of
both parties or the request of the Arbitrator.

 

(d)          The finding of the Arbitrator shall be final and binding upon the
parties. Judgment upon any arbitration award rendered may be entered and
enforced in any court of competent jurisdiction. The costs of the Arbitrator
shall be shared equally between both parties. Each party, however, shall bear
its own attorneys’ fees and costs in connection with the Arbitration.

 

(e)          The following capitalized terms shall have the meaning specified
below:

 

Arbitration: Arbitration in accordance with the then governing Commercial
Arbitration Rules of the American Arbitration Association (“AAA”) and
administered by the AAA, which shall be conducted in New York, New York or other
place mutually acceptable to the parties to the arbitration.

 

Arbitrator: A person who is not affiliated with Five Oaks, the Depositor or any
Originator, who is a member of the American Arbitration Association.

 

Section 5. Conveyance of Mortgage Loans.

 

(a)          Mortgage Loans. In return for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Five Oaks,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Depositor, without recourse, all
of Five Oaks’s right, title and interest in and to the Mortgage Loans (excluding
the servicing rights with respect to the Mortgage Loans), including (i) the
related Mortgage Documents and all principal and interest received by Five Oaks
on or with respect to the Mortgage Loans after April 1, 2015 (the “Cut-off
Date”) (other than Scheduled Payments due on or before such date), and all such
payments due after such date but received on or prior to such date and intended
by the related Mortgagors to be applied after such date, (ii) all insurance
policies with respect to the Mortgage Loans and (iii) all proceeds of the
foregoing.

 

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The Depositor shall pay the purchase price for the Mortgage Loans by delivering
to Five Oaks on the Closing Date immediately available funds in an amount
mutually agreed upon by Five Oaks and the Depositor.

 

On or prior to the Closing Date, Five Oaks shall deliver or cause to be
delivered to the Depositor or, at the Depositor’s direction, to the Custodian,
the Custodial File and the Credit File for each Mortgage Loan in the manner set
forth in Section 2 of the Custodial Agreement.

 

(b)          Limited Remedies. The Depositor acknowledges and agrees that it
shall have no recourse to Five Oaks with respect to any Defective Mortgage Loan
except as provided in Sections 3 and 4 and that the Depositor’s remedies with
respect to any other Defective Mortgage Loans shall be exercised by the Trustee
with respect to the Originator of such Defective Mortgage Loan as set forth in
the related AAR Agreement.

 

Section 6.  Intention of Parties. The conveyance of the Mortgage Loans and all
other property hereunder by Five Oaks as contemplated hereby is absolute and is
intended by the parties to constitute a sale of the Mortgage Loans and such
other property by Five Oaks to the Depositor. It is, further, not intended that
such conveyance be the grant of a security interest to secure a loan or other
obligation. However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans and the other property described in Section 5 are
held to be the property of Five Oaks, or if for any other reason this Agreement
is held or deemed to create a security interest in the Mortgage Loans and such
other property, then this Agreement shall constitute a security agreement, and
the conveyance provided for in Section 5 shall be deemed to be a grant by Five
Oaks to the Depositor of, and Five Oaks hereby grants to the Depositor, to
secure all of Five Oaks’s obligations hereunder, a security interest in all of
Five Oaks’s right, title and interest, whether now owned or hereafter acquired,
in and to (i) the Mortgage Loans (excluding the servicing rights with respect to
the Mortgage Loans), including the Mortgage Notes, the Mortgages, and the right
to all payments of principal and interest received on or with respect to the
Mortgage Loans after the Cut-off Date (other than Scheduled Payments due on or
before such date), and all such payments due after such date but received on or
prior to such date and intended by the related Mortgagors to be applied after
such date, (ii) all of Five Oaks’s right, title and interest, if any, in and to
all amounts from time to time credited to and the proceeds of any Custodial
Accounts or any Escrow Account established with respect to the Mortgage Loans,
(iii) all of Five Oaks’s right, title and interest, if any, in REO Property and
the proceeds thereof, (iv) all of Five Oaks’s rights under any Insurance
Policies related to the Mortgage Loans, (v) Five Oaks’s security interest in any
collateral pledged to secure the Mortgage Loans, including the Mortgaged
Properties and (vi) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing into cash or other liquid assets, including, without
limitation, all Insurance Proceeds, Liquidation Proceeds and condemnation
awards.

 

Five Oaks and the Depositor shall, to the extent consistent with this Agreement,
take such actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Agreement. Five Oaks shall arrange for filing any Uniform Commercial Code
financing statements and continuation statements in connection with such
security interest.

 

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Section 7. Termination.

 

Notwithstanding any termination of this Agreement or the completion of all sales
contemplated hereby, the representations, warranties and agreements in Sections
1, 2 and 3 hereof shall survive and remain in full force and effect.

 

Section 8. Miscellaneous.

 

(a)          Amendments, Etc. No rescission, modification, amendment, supplement
or change of this Agreement shall be valid or effective unless in writing and
signed by all of the parties to this Agreement. No amendment of this Agreement
may modify or waive the representations, warranties and agreements set forth in
Sections 1, 2 and 3 hereof.

 

(b)          Binding Upon Successors, Etc. This Agreement shall bind and inure
to the benefit of and be enforceable by Five Oaks and the Depositor, and the
respective successors and assigns thereof. The parties hereto acknowledge that
the Depositor is acquiring the Mortgage Loans for the purpose of selling,
transferring, assigning, setting over and otherwise conveying them to the
Trustee, pursuant to the Pooling and Servicing Agreement. Five Oaks acknowledges
and consents to the assignment to the Trustee by the Depositor of all of the
Depositor’s rights against Five Oaks hereunder in respect of the Mortgage Loans
sold to the Depositor and that the enforcement or exercise of any right or
remedy against Five Oaks hereunder by the Trustee or to the extent permitted
under Article II of the Pooling and Servicing Agreement shall have the same
force and effect as if enforced and exercised by the Depositor directly.

 

(c)          Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

(d)          Governing Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of
New York notwithstanding any law, rule, regulation, or other conflict-of-law
provisions to the contrary.

 

(e)          Headings. The headings of the several parts of this Agreement are
inserted for convenience of reference and are not intended to be a part of or
affect the meaning or interpretation of this Agreement.

 

(f)           Definitions. Capitalized terms not otherwise defined herein have
the meanings ascribed to such terms in the Pooling and Servicing Agreement as in
effect on the date of execution hereof.

 

(g)          Nonpetition Covenant. Until one year plus one day shall have
elapsed since the termination of the Pooling and Servicing Agreement in
accordance with its terms, Five Oaks shall not petition or otherwise invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Depositor under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Depositor or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Depositor.

 

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IN WITNESS WHEREOF, each party has caused this Mortgage Loan Purchase and Sale
Agreement to be executed by its duly authorized officer or officers as of the
day and year first above written.

 

  FIVE OAKS ACQUISITION CORP.         By:  /s/ Darren Comisso         Name:
Darren Comisso         Title: EVP         OAKS FUNDING LLC         By:  /s/
Darren Comisso         Name: Darren Comisso         Title: President

 

 

 

 

SCHEDULE A

MORTGAGE LOAN SCHEDULE 

 

Schedule A-1