Exhibit 10.1

Execution Version

AMENDED AND RESTATED

RESTRUCTURING SUPPORT AGREEMENT

This RESTRUCTURING SUPPORT AGREEMENT (as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof, and including
any exhibits or schedules hereto, this “Agreement”), dated as of October 20,
2017, is entered into by and between:

(i) Walter Investment Management Corp. (the “Company”); and

(ii) each undersigned entity, in each such entity’s respective capacity as
lender under, or as nominee, investment adviser, sub-adviser, or investment
manager, as applicable, to certain funds, accounts, and other entities
(including subsidiaries and affiliates of such funds, accounts, and entities)
that is a lender (in its respective capacity as such, each, a “Term Lender,”
and, collectively, the “Term Lenders” and, together with their respective
successors and permitted assigns and any subsequent Term Lender that becomes
party hereto in accordance with the terms hereof, each, a “Consenting Term
Lender,” and, collectively, the “Consenting Term Lenders”) party to that certain
Amended and Restated Credit Agreement, dated as of December 19, 2013 (as
amended, restated, amended and restated, supplemented, or otherwise modified
from time to time in accordance with the terms thereof, the “Credit Agreement,”
and the term loan facility thereunder, the “Term Loan Facility”), by and among
the Company, as the borrower, Credit Suisse AG, as administrative agent
(together with any successor administrative agent, in each case, in such
capacity, the “Administrative Agent”), the other term lenders party thereto and
the other lenders party thereto.

The Company, each Consenting Term Lender, and any subsequent Person that becomes
a party hereto in accordance with the terms hereof are referred to herein as the
“Parties” and individually as a “Party.”

Capitalized terms used but not defined herein shall have the meanings ascribed
to them, as applicable, in the restructuring term sheet attached hereto as
Exhibit A (together with all exhibits and annexes attached thereto, the “Term
Sheet”), including any schedules, annexes and exhibits attached thereto, and as
may be modified in accordance with Section 9 hereof, or the Credit Agreement.

WHEREAS, the Parties entered into a Restructuring Support Agreement, dated as of
July 31, 2017, as amended effective as of August 3, 2017, and further amended as
of August 21, 2017, and August 31, 2017 (the “Original RSA”);

WHEREAS, the Parties desire to amend and restate the Original RSA in its
entirety as set forth herein;

WHEREAS, the Parties have agreed to a restructuring of the Company and/or its
capital structure (the “Restructuring”) that will be implemented through a
chapter 11 proceeding consistent with the terms and subject to the conditions
set forth herein, including in the Term Sheet, which are the product of
arm’s-length, good faith discussions between the Parties and their respective
professionals;

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WHEREAS, as of the date hereof, the Consenting Term Lenders in the aggregate
hold, or act as the nominee, investment adviser, sub-adviser, or investment
manager to entities that hold, as of the date hereof, more than 48% of the
aggregate outstanding principal amount of the Loans and Commitments (each as
defined in the Credit Agreement);

WHEREAS, concurrently with the execution of this Agreement, the Company is
entering into the Senior Notes RSA; and

WHEREAS, the Parties desire to express to each other their mutual support and
commitment in respect of the matters discussed in the Term Sheet and hereunder.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:

The Original RSA is hereby amended and restated in its entirety, effective as of
the Support Effective Date (as defined below), to read as set forth below:

 

  1. Certain Definitions.

As used in this Agreement, the following terms have the following meanings:

(a)    “Alternative Transaction” means any plan, dissolution, winding up,
liquidation, sale or disposition, reorganization, merger or restructuring of the
Company or its assets other than the Restructuring, as set forth herein,
including the Term Sheet;

(b)    “Amended and Restated Credit Facility” means that certain credit facility
with terms consistent with the terms set forth on Exhibit 1 to the Term Sheet.

(c)    “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§
101, et seq., as amended from time to time.

(d)    “Bankruptcy Court” means the United States Bankruptcy Court for the
Southern District of New York having jurisdiction over the Chapter 11 Case, and,
to the extent of the withdrawal of any reference under 28 U.S.C. § 157, pursuant
to 28 U.S.C. § 151, the United States District Court for the Southern District
of New York.

(e)    “Claims” means “claim” as defined in section 101(5) of the Bankruptcy
Code, including, without limitation, any claim arising under the Credit
Agreement or related to the Term Loan Facility.

 

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(f)    “Consenting Senior Noteholders” means the Senior Noteholders that execute
the Senior Notes RSA, together with their respective successors and permitted
assigns that become party thereto.

(g)    “Convertible Noteholders” means the holders of Convertible Notes, in
their respective capacities as such.

(h)    “Convertible Notes” means the 4.50% convertible senior subordinated notes
due 2019 issued pursuant to the Convertible Notes Indenture.

(i)    “Convertible Notes Indenture” means that certain Subordinated Indenture
dated as of January 13, 2012 by and between the Company and Wells Fargo Bank,
National Association as Trustee, and a Supplemental Indenture thereto, dated as
of January 13, 2012.

(j)    “Convertible Notes RSA” means any restructuring support agreement that
may be entered into by the Company and any holders of the Convertible Notes.

(k)    “Definitive Documents” means the documents (including any related orders,
agreements, instruments, schedules or exhibits) that are contemplated by the
Term Sheet and that are otherwise necessary or desirable to implement, or
otherwise relate to the Restructuring, the Prepackaged Plan and the Term Sheet,
including: (i) the Prepackaged Plan; (ii) the documents to be filed in the
supplement to the Prepackaged Plan (collectively, the “Plan Supplement”); (iii)
the definitive documentation with respect to the Amended and Restated Credit
Facility (collectively, the “Amended and Restated Credit Facility Documents”);
(iv) the Direction; (v) the Disclosure Statement; (vi) any motion seeking the
approval of the adequacy of the Disclosure Statement and solicitation of the
Prepackaged Plan; (vii) the Confirmation Order; (viii) the motion for use of
cash collateral and to incur postpetition financing and any credit agreement
with respect thereto (the “Financing Motion”); (ix) any Financing Orders;
(x) the post-Effective Date organizational documents for the Company,
shareholder-related agreements, or other related documents (including the
mandatorily convertible preferred stock described on Exhibit 3 to the Term Sheet
and the warrants described on Exhibit 4 to the Term Sheet); and (xi) the
definitive documentation with respect to the Management Incentive Plan. Without
prejudice to the rights of any Consenting Term Lender with respect to any action
that any Consenting Term Lender may take with respect to any action or failure
to act of either the Company or any Consenting Noteholder with respect the
Senior Notes RSA, the Senior Notes RSA shall not constitute a Definitive
Document for purposes of this Agreement. Each of the Definitive Documents shall
contain terms and conditions consistent in all material respects with this
Agreement and the Term Sheet, and shall otherwise be reasonably acceptable in
all material respects to the Required Parties, including with respect to any
modifications, amendments, or supplements to such Definitive Documents at any
time during the Support Period; provided, that the terms of the Prepackaged Plan
with respect to the treatment of the Term Loans and the treatment of any matters
with respect to the Credit Agreement will be acceptable in all material respects
to the Requisite Term Lenders, and Amended and Restated Credit Facility
Documents, the Financing Motion, and the Financing Orders shall be acceptable in
all respects to the Requisite Term Lenders.

 

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(l)    “Deposit Account” means any deposit accounts, securities accounts,
operating accounts, commodities accounts, or other accounts of any kind or
nature (other than (x) Excluded Accounts (as defined in the Security Agreement)
and (y) accounts that the Requisite Term Lenders otherwise agree shall not be
subject to Section 4(d)(iii) hereof) held by a Credit Party (as defined in the
Credit Agreement) into which funds of any Credit Party (as defined in the Credit
Agreement) are deposited from time to time.

(m)    “Direction” means the Consent of Noteholders to Direction to Trustee
attached as Exhibit B to the Senior Notes RSA, including all attachments,
annexes and exhibits thereto.

(n)    “Disclosure Statement” means the Disclosure Statement relating to the
Prepackaged Plan.

(o)    “Effective Date” means the date on which the Restructuring is
consummated.

(p)    “Filing Conditions” means the Company having received votes to accept the
Prepackaged Plan by (i) holders of Term Loans satisfying the Requisite Term
Lenders Threshold and (ii) holders of Senior Notes satisfying the Requisite
Senior Notes Threshold.

(q)    “Financing Orders” means any orders authorizing the Company to continue
to access cash collateral and incur any postpetition financing on an interim
basis or final basis consistent with the Term Sheet.

(r)    “Management Incentive Plan” means a post-Effective Date management
incentive plan for certain members of the Company’s management to be adopted by
the board of directors of the reorganized Company post-Effective Date in
accordance with the Term Sheet.

(s)    “Person” means any “person” as defined in section 101(41) of the
Bankruptcy Code, including, without limitation, any individual, corporation,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof or other entity.

(t)    “Prepackaged Plan” means the prepackaged chapter 11 plan of
reorganization of the Company (including any annexes, supplements, exhibits,
term sheets, or other attachments attached thereto, which will be consistent in
all respects with the Term Sheet and this Agreement and otherwise reasonably
acceptable to the Company and Requisite Term Lenders), to be implemented in the
Restructuring in accordance with and subject to the terms and conditions of this
Agreement, including the Term Sheet.

 

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(u)    “Required Lenders” means the “Required Lenders” as defined in the Credit
Agreement.

(v)    “Required Parties” means each of (i) the Company and (ii) the Requisite
Term Lenders.

(w)    “Requisite Senior Notes Threshold” means 662/3% of the aggregate
outstanding principal amount of the Senior Notes.

(x)    “Requisite Term Lenders” means, as of the date of determination,
Consenting Term Lenders holding at least a majority in aggregate principal
amount outstanding of the Term Loans held by the Consenting Term Lenders as of
such date.

(y)    “Requisite Term Lenders Threshold” means 662/3% of the aggregate
outstanding principal amount of the Term Loan Facility.

(z)    “SEC” means the Securities & Exchange Commission.

(aa)    “Second Lien Notes” means the Series A Notes and Series B Notes
described in the Term Sheet.

(bb)    “Senior Notes” means the 7.875% senior notes due 2021 issued pursuant to
the Senior Notes Indenture.

(cc)    “Senior Notes Indenture” means the Indenture for the 7.875% Senior Notes
due 2021 dated December 17, 2013 among the Company, the guarantors and
Wilmington Savings Fund Society, FSB, a national banking association, as
successor trustee.

(dd)    “Senior Notes RSA” means the restructuring support agreement, dated as
of October 20, 2017, to support the Restructuring with terms consistent with
this Agreement and the Term Sheet executed by the Company and the Consenting
Senior Noteholders satisfying the Requisite Senior Notes Threshold. The Term
Sheet will be attached as Exhibit A to the Senior Notes RSA; provided that the
Consenting Term Lenders shall not deemed to be parties to, or third party
beneficiaries under, the Senior Notes RSA for any purpose whatsoever.

(ee)    “Senior Noteholders” means the holders of Senior Notes, in their
respective capacities as such.

(ff)    “Securities Act” means the Securities Act of 1933, as amended.

(gg)    “Support Effective Date” means the date on which the counterpart
signature pages to (i) this Agreement shall have been executed and delivered by
the Company and Consenting Term Lenders (a) holding at least 662/3% in aggregate
principal amount outstanding of the Term Loans and (b) representing the Required
Lenders; and (ii) the Senior Notes RSA shall have been executed and delivered by
the Company and the Consenting Senior Noteholders holding at least the Requisite
Senior Notes Threshold.

 

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(hh)    “Support Period” means the period commencing on the Support Effective
Date and ending on the earlier of the (i) date on which this Agreement is
terminated in accordance with Section 5 hereof and (ii) the Effective Date.

 

  2. Term Sheet.

The Term Sheet is expressly incorporated herein by reference and made part of
this Agreement as if fully set forth herein. The Term Sheet, including the
exhibits and annexes and exhibits thereto, sets forth the material terms and
conditions of the transactions contemplated by the Restructuring (collectively,
the “Restructuring Transactions”); provided, however, the Term Sheet is
supplemented by the terms and conditions of this Agreement. In the event of any
inconsistency between the Term Sheet and this Agreement, the Term Sheet shall
control.

 

  3. Agreements of the Consenting Term Lenders.

(a)    Agreement to Support. During the Support Period, subject to the terms and
conditions hereof, each of the Consenting Term Lenders agrees, severally and not
jointly, that it shall:

(i) use its commercially reasonable efforts to support the Restructuring and the
transactions contemplated by the Term Sheet and the Prepackaged Plan, and to act
in good faith and take any and all reasonable actions necessary to consummate
the Restructuring and the transactions contemplated by the Term Sheet and the
Prepackaged Plan (including the negotiation of the Amended and Restated Credit
Facility Documents), in a manner consistent with this Agreement;

(ii) refrain from initiating (or directing or encouraging the Administrative
Agent or any other party to initiate) any actions, including legal proceedings,
that are inconsistent with, or that would delay, prevent, frustrate or impede
the approval, confirmation or consummation, as applicable, of the Restructuring;

(iii) timely vote (pursuant to the Prepackaged Plan) or cause to be voted all of
its Claims (including on account of the Senior Notes Indenture or the
Convertible Notes Indenture owned or controlled by such Consenting Term Lender)
to accept the Prepackaged Plan by delivering its duly executed and completed
ballot or ballots, as applicable, accepting the Prepackaged Plan on a timely
basis following commencement of the solicitation of acceptances of the
Prepackaged Plan in accordance with sections 1125(g) and 1126 of the Bankruptcy
Code;

(iv) negotiate in good faith with the Company the forms of the Definitive
Documents (to the extent such Consenting Term Lender is a party thereto) and
execute the Definitive Documents;

 

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(v) not change or withdraw its votes to accept the Prepackaged Plan (or cause or
direct such vote to be changed or withdrawn); provided, however, that such vote
shall, without any further action by the applicable Consenting Term Lender, be
deemed automatically revoked (and, upon such revocation, deemed void ab initio)
by the applicable Consenting Term Lender at any time following the expiration of
the Support Period with respect to such Consenting Term Lender;

(vi) not directly or indirectly, through any Person, seek, solicit, propose,
support, assist, engage in negotiations in connection with or participate in the
formulation, preparation, filing or prosecution of, any plan, plan proposal,
restructuring proposal, offer of dissolution, winding up, liquidation, sale or
disposition, reorganization, merger or restructuring of the Company under any
bankruptcy, insolvency or similar laws other than the Restructuring, or take any
other action that is inconsistent with or that would reasonably be expected to
prevent, interfere with, delay or impede the solicitation of votes on the
Restructuring, Prepackaged Plan and Disclosure Statement, and the confirmation
and consummation of the Prepackaged Plan and the Restructuring;

(vii) use its commercially reasonable efforts to support and take all actions as
are reasonably necessary and appropriate to obtain any and all required
regulatory and/or third-party approvals to consummate the Transactions; and

(viii) support and take all reasonable actions necessary or reasonably requested
by the Company to facilitate the solicitation of votes on the Prepackaged Plan
by the Company, approval of the Prepackaged Plan and Disclosure Statement, and
confirmation and consummation of the Prepackaged Plan and the Restructuring.

(b)    Transfers.

(i) Each Consenting Term Lender agrees that, for the duration of the Support
Period, such Consenting Term Lender shall not sell, transfer, loan, issue,
participate, pledge, hypothecate, assign or otherwise dispose of (other than
ordinary course pledges and/or swaps) (each, a “Transfer”), directly or
indirectly, in whole or in part, any of its Claims, including any beneficial
ownership in any such Claims,1 or any option thereon or any right or interest
therein, unless the transferee thereof either (A) is a Consenting Term Lender
(with respect to a transfer by a Consenting Term Lender) or (B) prior to such
Transfer, agrees in writing for the benefit of the Parties to become a
Consenting Term Lender and to be bound by all of the terms of this Agreement
applicable to Consenting Term Lenders (including with respect to any and all
Claims it already may hold against or in the Company prior to such Transfer) by
executing a joinder agreement, a form of which is attached hereto as Exhibit B
(a “Joinder Agreement”), and delivering an executed copy thereof within two
(2) business days of

 

1 

As used herein, the term “beneficial ownership” means the direct or indirect
economic ownership of, and/or the power, whether by contract or otherwise, to
direct the exercise of the voting rights and the disposition of, any Claims
subject to this Agreement or the right to acquire such Claims.

 

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such execution, to (i) Weil, Gotshal and Manges LLP (“Weil”), as counsel to the
Company, (ii) Kirkland & Ellis LLP, as counsel to an ad hoc group of Consenting
Term Lenders (“Kirkland”) and (iii) Davis Polk & Wardwell LLP (“Davis Polk”), as
counsel to the Administrative Agent,, in which event (x) the transferee shall be
deemed to be a Consenting Term Lender hereunder to the extent of such
transferred Claims and (y) the transferor shall be deemed to relinquish its
rights (and be released from its obligations) under this Agreement to the extent
of such transferred Claims (such transfer, a “Permitted Transfer” and such party
to such Permitted Transfer, a “Permitted Transferee”). Each Consenting Term
Lender agrees that any Transfer of any Claim that does not comply with the terms
and procedures set forth herein shall be deemed void ab initio, and the Company
and each other Consenting Term Lender shall have the right to enforce the
voiding of such Transfer.

(ii) Notwithstanding anything to the contrary herein, (A) a Qualified
Marketmaker2 that acquires any Claims subject to this Agreement held by a
Consenting Term Lender with the purpose and intent of acting as a Qualified
Marketmaker for such Claims, shall not be required to become a party to this
Agreement as a Consenting Term Lender, if (x) such Qualified Marketmaker
transfers such Claims (by purchase, sale, assignment, or other similar means)
within the earlier of ten (10) business days of its acquisition and the plan
voting deadline to a Permitted Transferee and the transfer otherwise is a
Permitted Transfer, and (y) such Consenting Term Lender shall be solely
responsible for the Qualified Marketmaker’s failure to comply with this
Section 3(b), and (B) to the extent any Party is acting solely in its capacity
as a Qualified Marketmaker, it may Transfer any ownership interests in the
Claims that it acquires from a holder of Claims that is not a Consenting Term
Lender to a transferee that is not a Consenting Term Lender at the time of such
Transfer without the requirement that the transferee be or become a signatory to
this Agreement or execute a Transfer Agreement.

(iii) This Agreement shall in no way be construed to preclude the Consenting
Term Lenders from acquiring additional Claims; provided that (A) any Consenting
Term Lender that acquires additional Claims during the Support Period shall
promptly notify Weil, Kirkland and Davis Polk of such acquisition, including the
amount of such acquisition, and (B) such acquired Claims shall automatically and
immediately upon acquisition by a Consenting Term Lender be deemed subject to
the terms of this Agreement (regardless of when or whether notice of such
acquisition is given to the Company).

 

 

2  As used herein, the term “Qualified Marketmaker” means an entity that
(a) holds itself out to the public, the syndicated loan market, and/or the
applicable private markets as standing ready in the ordinary course of business
to purchase from customers and sell to customers claims against, and equity
interests in, the Company, including Term Loans, or enter with customers into
long and short positions in claims against the Company), in its capacity as a
dealer or market maker in such claims and (b) is, in fact, regularly in the
business of making a market in claims against issuers or borrowers (including
term, loans, and/or debt or equity securities).

 

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(iv) This Section 3(b) shall not impose any obligation on the Company to issue
any “cleansing letter” or otherwise publicly disclose information for the
purpose of enabling a Consenting Term Lender to Transfer any
Claims. Notwithstanding anything to the contrary herein, to the extent the
Company and another Party have entered into a separate agreement with respect to
the issuance of a “cleansing letter” or other public disclosure of information,
the terms of such confidentiality agreement shall continue to apply and remain
in full force and effect according to its terms.

(c)    Additional Claims. To the extent any Consenting Term Lender (i) acquires
additional Claims, (ii) holds or acquires any other claims against the Company
entitled to vote on the Prepackaged Plan, or (iii) holds or acquires any equity
interests in the Company entitled to vote on the Prepackaged Plan, then, in each
case, each such Consenting Term Lender shall promptly notify Weil, Kirkland and
Davis Polk, and each such Consenting Term Lender agrees that all such Claims
shall be subject to this Agreement, and agrees that, for the duration of the
Support Period and subject to the terms of this Agreement, it shall vote in
favor of the Prepackaged Plan (or cause to be voted) any such additional Claims
entitled to vote on the Prepackaged Plan (to the extent still held by it on or
on its behalf at the time of such vote), in a manner consistent with
Section 3(a) hereof. For the avoidance of any doubt, any obligation to vote for
the Prepackaged Plan or any other plan of reorganization shall be subject to
sections 1125(g) and 1126 of the Bankruptcy Code.

(d)    Preservation of Rights. Notwithstanding the foregoing, nothing in this
Agreement (including any Consenting Term Lender’s entry into this Agreement in
connection with, or following, the Company’s entry into Senior Notes RSA) or the
Term Sheet, and neither a vote to accept the Prepackaged Plan by any Consenting
Term Lender, nor the acceptance of the Prepackaged Plan by any Consenting Term
Lender, shall: (A) be construed to limit consent and approval rights provided in
this Agreement and the Definitive Documentation; (B) be construed to prohibit
any Consenting Term Lender from contesting whether any matter, fact, or thing is
a breach of, or is inconsistent with, this Agreement, or exercising rights or
remedies specifically reserved herein; (C) be construed to prohibit any
Consenting Term Lender from appearing as a party-in-interest in any matter to be
adjudicated in the Chapter 11 Case, so long as such appearance and the positions
advocated in connection therewith are not inconsistent with this Agreement and
are not for the purpose of (or could not reasonably be expected to) hindering,
delaying, or preventing the consummation of the transactions contemplated in,
subject to the terms and conditions of, consummation of the Restructuring;
(D) impair or waive the rights of any Consenting Term Lender to assert or raise
any objection expressly permitted under this Agreement in connection with any
hearing in the Bankruptcy Court, including, without limitation, any hearing on
confirmation of the Prepackaged Plan; or (E) subject to Section 3(f), limit the
ability of any Consenting Term Lender to assert any rights, claims, and/or
defenses under the Credit Agreement, the Security Agreement (as defined in the
Credit Agreement), and any related documents or agreements (including, without
limitation, the right of any Consenting Term Lender to assert that any potential
action of the Company or any Credit Party that is inconsistent with, or any
potential omission of the Company or any Credit Party to take any action
required, by the Credit Agreement and/or that a potential Default or Event of
Default has occurred under the Credit Agreement).

 

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(e)    Negative Covenants. The Consenting Term Lenders agree that, for the
duration of the Support Period, each Consenting Term Lender shall not take any
action inconsistent with, or omit to take any action required by the Credit
Agreement, except to the extent that any such action or inaction is expressly
contemplated or permitted by this Agreement, the Prepackaged Plan, or any of the
other Definitive Documents.

(f)    Forbearance. Each Consenting Term Lender (collectively representing the
Required Lenders) agrees that, for the duration of the Support Period, in
connection with any default or event of default arising under the Credit
Agreement in connection with the Restructuring (including pursuant to
Section 7.01(e) of the Credit Agreement), (i) each Consenting Term Lender shall
forbear from (A) commencing any judicial enforcement proceedings against the
Company or any of its subsidiaries, (B) exercising (or directing any Person to
exercise) any remedy available to the Consenting Term Lenders and the
Administrative Agent under the Credit Agreement, including without limitation
pursuant to Article 7 thereof, any Credit Document (as defined in the Credit
Agreement) or otherwise by contract, in law or in equity, (C) requesting that
the Administrative Agent not convert Loans (as defined in the Credit Agreement)
into, or continue Loans as, Eurodollar Loans (as defined in the Credit
Agreement) and/or (D) voting in favor of, or otherwise taking any action to
direct, instruct or authorize any Person to undertake any of the actions in
foregoing clauses (A) through (C) and (ii) no additional interest shall accrue
pursuant to Section 2.07 of the Credit Agreement; provided that if this
Agreement is terminated during the Support Period other than pursuant to
Section 5(e) or Section 5(c)(i) hereof, any interest that would have otherwise
accrued pursuant to Section 2.07 of the Credit Agreement during the Support
Period absent the forbearance set forth in this Section 3(f) shall be deemed to
have accrued as of the date of termination of this Agreement, without any
further action by any Term Lender or the Administrative Agent, to the extent
provided under the Credit Agreement. For the avoidance of doubt, the forbearance
set forth in this Section 3(f) shall not itself constitute a waiver with respect
to any defaults or events of default under the Credit Agreement, and shall not
bar the Administrative Agent or any Consenting Term Lender from filing a proof
of claim, taking action to establish the amount of any Claim, or exercising any
rights under this Agreement, including terminating this Agreement pursuant to
Section 5(b) hereof.

 

  4. Agreements of the Company.

(a)    Covenants. The Company agrees that, for the duration of the Support
Period, the Company shall, and shall cause each of its subsidiaries included in
the definition of Company, to:

(i) (A) support and use commercially reasonable efforts to consummate and
complete the Restructuring and all transactions contemplated under this
Agreement (including, without limitation, those described in the Term Sheet and
once filed, the Prepackaged Plan) including, without limitation, (1) take any
and all reasonably

 

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necessary actions in furtherance of the Restructuring and the transactions
contemplated under this Agreement, including, without limitation, as set forth
in the Term Sheet and, once filed, the Prepackaged Plan, (2) subject to the
satisfaction of the Filing Conditions (unless waived by the Company), commence
the Chapter 11 Case on or before November 30, 2017 (the “Outside Petition Date,”
and the actual commencement date, the “Petition Date”) and complete and file,
within the timeframes contemplated herein, the Prepackaged Plan, the Disclosure
Statement, and the other Definitive Documents, and (3) use commercially
reasonable efforts to obtain orders of the Bankruptcy Court approving the
Disclosure Statement and confirming the Prepackaged Plan within the timeframes
contemplated by this Agreement; (B) use commercially reasonable efforts to
obtain any and all required regulatory approvals for the Restructuring embodied
in the Definitive Documents, including the Prepackaged Plan; (C) not take any
action that is inconsistent with, or to alter, delay, impede, or interfere with,
approval of the Disclosure Statement, confirmation of the Prepackaged Plan, or
consummation of the Prepackaged Plan and the Restructuring, in the case of each
of clauses (A) through (C) to the extent consistent with, upon the advice of
counsel, the fiduciary duties of the board of director of the Company;

(ii) not commence an avoidance action or other legal proceeding that challenges
the validity, enforceability, or priority of the Term Loans or obligations under
the Credit Agreement;

(iii) if the Company receives an unsolicited bona fide unsolicited proposal or
expression of interest in undertaking an Alternative Transaction that the board
of directors of the Company, determines in its good-faith judgment provides a
higher or better economic recovery to the Company’s stakeholders than that set
forth in this Agreement and such Alternative Transaction is from a proponent
that the board of directors of the Company has reasonably determined is capable
of timely consummating such Alternative Transaction, the Company will within 48
hours of the receipt of such proposal or expression of interest, notify counsel
to the Requisite Term Lenders and counsel to the Administrative Agent of the
receipt thereof, with such notice to include the material terms thereof,
including the identity of the Person or group of Persons involved;

(iv) provide draft copies of all material motions or applications and other
documents (including all “first day” and “second day” motions and orders, the
Prepackaged Plan, the Disclosure Statement, ballots and other solicitation
materials in respect of the Prepackaged Plan and any proposed amended version of
the Prepackaged Plan or the Disclosure Statement, and a proposed confirmation
order) the Company intends to file with the Bankruptcy Court to Kirkland and to
Davis Polk, if reasonably practical, at least five (5) business days prior to
the date when the Company intends to file any such pleading or other document
(provided that if delivery of such motions, orders or materials (other than the
Prepackaged Plan, the Disclosure Statement, a confirmation order or adequate
protection order) at least five (5) business days in advance is not reasonably
practicable, such motion, order or material shall be delivered as soon as
reasonably practicable prior to filing) and shall consult in good faith with
such counsel regarding the form and substance of any such proposed filing with
the Bankruptcy Court;

 

11

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(v) file such “first day” motions and pleadings reasonably determined by the
Company, in form and substance reasonably acceptable to the Requisite Term
Lenders, to be necessary, and to seek interim and final (to the extent
necessary) orders, in form and substance reasonably acceptable to the Company
and the Requisite Term Lenders, from the Bankruptcy Court approving the relief
requested in such “first day” motions;

(vi) subject to appropriate confidentiality arrangements, provide to the
Consenting Term Lenders’ professionals, upon reasonable advance notice to the
Company; (A) reasonable access (without any material disruption to the conduct
of the Company’s business) during normal business hours to the Company’s books,
records, and facilities; (B) reasonable access to the respective management and
advisors of the Company for the purposes of evaluating the Company’s finances
and operations and participating in the planning process with respect to the
Restructuring; (C) prompt access to any information provided to any existing or
prospective financing sources (including lenders under any debtor-in-possession
and/or exit financing); and (D) prompt and reasonable responses to all
reasonable diligence requests;

(vii) use its commercially reasonable efforts to support and take all actions as
are reasonably necessary and appropriate to obtain any and all required
regulatory and/or third-party approvals to consummate the Transactions;

(viii) promptly pay all prepetition and postpetition reasonable and documented
fees and expenses of (x) Kirkland, FTI Consulting Inc. (“FTI”), and one firm
acting as local counsel for Kirkland, if any, in each case in accordance with
the terms of their respective engagement letters with the Company, and (y) the
Administrative Agent, Davis Polk, and one firm acting as local counsel for Davis
Polk, if any, in each case, in accordance with the Credit Agreement;

(ix) not, nor encourage any other person or entity to, take any action which
would, or would reasonably be expected to, breach or be inconsistent with this
Agreement or delay, impede, appeal, or take any other negative action, directly
or indirectly, to interfere with the acceptance, confirmation, or consummation
of the Plan or implementation of the Restructuring;

(x) subject to applicable laws, use commercially reasonable efforts to,
consistent with the pursuit and consummation of the Restructuring and the
transactions contemplated thereby, preserve intact in all material respects the
current business operations of the Company and its subsidiaries;

(xi) subject to applicable laws, use commercially reasonable efforts to,
consistent with the pursuit and consummation of the Restructuring and the
transactions contemplated thereby, preserve intact in all material respects the
current business operations of the Company and its subsidiaries (other than as
consistent with applicable fiduciary duties), keep available the services of its
current officers and material employees (in each case, other than voluntary
resignations, terminations for cause, or

 

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terminations consistent with applicable fiduciary duties) and preserve in all
material respects its relationships with customers, sales representatives,
suppliers, distributors, and others, including the warehouse lenders, in each
case, having material business dealings with the Company (other than
terminations for cause or consistent with applicable fiduciary duties)

(xii) provide prompt written notice to the Requisite Term Lenders between the
date hereof and the Effective Date of (A) receipt of any written notice from any
third party alleging that the consent of such party is or may be required in
connection with the transactions contemplated by the Restructuring, (B) receipt
of any written notice from any governmental body in connection with this
Agreement or the transactions contemplated by the Restructuring, (C) receipt of
any written notice of any proceeding commenced, or, to the actual knowledge of
the Company, threatened against the Company, relating to or involving or
otherwise affecting in any material respect the transactions contemplated by the
Restructuring and (D) receipt of any notice of termination of the Senior Notes
RSA;

(xiii) unless otherwise agreed by the Company and the applicable firm, on the
date that is at least one (1) calendar day prior to the Petition Date, pay to
(A) Kirkland, (B) one firm acting as local counsel for Kirkland, if any,
(C) FTI, (D) the Administrative Agent, (E) Davis Polk, and (F) one firm acting
as local counsel for Davis Polk, if any in each case, (x) all reasonable and
documented fees and expenses accrued but unpaid as of such date, whether or not
such fees and expenses are then due, outstanding, or otherwise payable in
connection with this matter and (y) fund or replenish, as the case may be, any
retainers reasonably requested by Kirkland or FTI, in each case in accordance
with the terms of their respective engagement letters with the Company; and

(xiv) on the Support Effective Date, the Company shall transfer $37,500,000 in
cash (the “Effective Date Prepayment”) to the Administrative Agent for
application of such cash as a voluntary prepayment of the Term Loans pursuant to
Section 2.12(a) to the Credit Agreement, with such prepayment to be applied to
the Term Loans in direct order of maturity. The Consenting Term Lenders
constituting the Required Lenders waive (i) the prior notice requirement with
respect to the Effective Date Prepayment required pursuant to Section 2.12(a)
and (c) of the Credit Agreement and (ii) the requirement in Section 2.12(a) of
the Credit Agreement that voluntary prepayments of term loans be in an amount
that is an integral multiple of $1,000,000 with respect to the Effective Date
Prepayment.

(b)    Automatic Stay. The Company acknowledges and agrees and shall not dispute
that after the commencement of the Chapter 11 Case, the giving of notice of
termination by any Party pursuant to this Agreement shall not be a violation of
the automatic stay of section 362 of the Bankruptcy Code (and the Company hereby
waives, to the greatest extent possible, the applicability of the automatic stay
to the giving of such notice); provided that nothing herein shall prejudice any
Party’s rights to argue that the giving of notice of default or termination was
not proper under the terms of this Agreement.

 

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(c)    Negative Covenants. The Company agrees that, for the duration of the
Support Period, the Company shall not take any action inconsistent with, or omit
to take any action required by the Credit Agreement, except to the extent that
any such action or inaction is expressly contemplated or permitted by this
Agreement, the Prepackaged Plan or any of the other Definitive Documents.

(d)    Deposit Control Agreement Matters. The Company, on behalf of itself and
its subsidiaries, agrees that:

(i) within three (3) business days of the date upon which the Company provides a
draft account control agreement (with springing control) for any Deposit Account
to Kirkland and FTI, or receives a revised draft of any such account control
agreement for any Deposit Account from a depositary financial institution, the
Company shall provide comments (if any) to such draft account control agreement,
to Kirkland and FTI on a professionals’ eyes only basis pursuant to their
respective confidentiality agreements;

(ii) within three (3) business days of the date upon which the Company receives
any comments to any draft account control agreement from Kirkland or FTI that
are reasonably acceptable to the Company, the Company shall circulate such
comments (including any comments from the Company) to the relevant financial
institution; and

(iii) the Company shall, and shall cause each other relevant Credit Party (as
defined in the Credit Agreement) to, use best efforts to enter into account
control agreements (with springing control) that are customary for transactions
of this type and as otherwise reasonably acceptable to the Requisite Term
Lenders and the Company with respect to each of the Deposit Accounts of such
Credit Parties by November 6, 2017 (or such later date as the Requisite Term
Lenders may agree). For the avoidance of doubt, the terms of this Section 4(e)
shall not require the Company or any subsidiary to move any of its Deposit
Accounts from the depositary financial institutions at which such Deposit
Accounts are currently held, except as otherwise provided in the Credit
Agreement.

 

  5. Termination of Agreement.

(a)    This Agreement shall terminate upon the receipt of written notice to the
other Parties, delivered in accordance with Section 19 hereof, from the
Requisite Term Lenders at any time after and during the continuance of any
Lender Termination Event.

 

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(b)    A “Lender Termination Event” shall mean any of the following:

(i) the breach by the Company of (a) any covenant contained in this Agreement
(including the failure to comply with the covenant contained in Section 4(e)) or
(b) any other obligations of the Company set forth in this Agreement, in each
case, in any material respect and, in either respect, such breach remains
uncured for a period of five (5) business days following the Company’s receipt
of written notice pursuant to Sections 5(a) and 19 hereto (as applicable);

(ii) any representation or warranty in this Agreement made by the Company shall
have been untrue in any material respect when made or shall have become untrue
in any material respect, and such breach remains uncured for a period of five
(5) business days following the Company’s receipt of notice pursuant to Sections
5(a) and 19 hereto (as applicable);

(iii) the Definitive Documents and any amendments, modifications, or supplements
thereto filed by the Company include terms that are materially inconsistent with
the Term Sheet and are not otherwise acceptable to the Consenting Term Lenders
in all respects, and such event remains unremedied for a period of three
(3) business days following the Company’s receipt of notice pursuant to Sections
5(a) and 19 hereto (as applicable);

(iv) a Definitive Document alters the treatment of the Term Lenders specified in
the Restructuring Term Sheet and the Requisite Term Lenders have not consented
to such Definitive Document;

(v) the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any ruling, judgment or order
enjoining the consummation of or rendering illegal the Prepackaged Plan or the
Restructuring, and either (A) such ruling, judgment or order has been issued at
the request of or with the acquiescence of the Company, or (B) in all other
circumstances, such ruling, judgment or order has not been not stayed, reversed
or vacated within fifteen (15) calendar days after such issuance;

(vi) the Support Effective Date shall not have occurred on or before October 25,
2017;

(vii) the Petition Date shall not have occurred on or before the Outside
Petition Date;

(viii) the Company shall not have filed the Prepackaged Plan, the Disclosure
Statement, and motions seeking approval of the Disclosure Statement and the
solicitation procedures and setting a confirmation hearing for the Prepackaged
Plan, within one (1) business day after the Petition Date;

(ix) the hearings to consider approval of the Disclosure Statement and
confirmation of the Prepackaged Plan shall not have commenced on or before the
forty-fifth (45th) day after the Petition Date;

 

15

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(x) two business days after the “voting deadline” for the Prepackaged Plan, if
Senior Noteholders holding at least the Requisite Senior Notes Threshold shall
not have voted in favor of the Prepackaged Plan;

(xi) the Company shall not have commenced solicitation of the Prepackaged Plan
(together with the substantially final form of the Amended and Restated Credit
Facility Agreement, which shall be included in the solicitation materials) on or
before November 6, 2017;

(xii) the Effective Date shall not have occurred on or before the earlier of
(A) seventy-five (75) days after the Petition Date and (B) January 31, 2018;

(xiii) the Bankruptcy Court enters an order that is not stayed (A) directing the
appointment of an examiner with expanded powers or a trustee in the Chapter 11
Case, (B) converting the Chapter 11 Case to a case under chapter 7 of the
Bankruptcy Code, (C) dismissing the Chapter 11 Case, (D) denying confirmation of
the Prepackaged Plan, the effect of which would render the Prepackaged Plan
incapable of consummation on the terms set forth herein, or (E) granting relief
that is inconsistent with this Agreement or the Prepackaged Plan in any
materially adverse respect to the supporting Lenders, in each case;

(xiv) the Confirmation Order is reversed or vacated by a Final Order;

(xv) any court of competent jurisdiction has entered a final, non-appealable
judgment or order declaring this Agreement to be unenforceable;

(xvi) if either (i) the Company (or any person or entity on behalf of the
Company or its bankruptcy estate with proper standing) files a motion,
application or adversary proceeding (or supports or fails to timely object to
such a filing) (1) challenging the validity, enforceability, perfection or
priority of, or seeking invalidation, avoidance, disallowance,
recharacterization or subordination of, the obligations or Claims under the
Credit Agreement, or (2) challenging the seniority of the obligations or Claims
under the Credit Agreement over any obligations or Claims under the Senior Notes
Indenture or the Convertible Notes Indenture, or (ii) the Bankruptcy Court (or
any court with jurisdiction over the Chapter 11 Cases) enters an order providing
relief against the interests of the Term Lenders with respect to any of the
foregoing causes of action or proceedings, including, but not limited to,
invalidating, avoiding, disallowing, recharacterizing, subordinating, or
limiting the enforceability of any of the obligations or Claims arising under or
related to the Credit Agreement;

(xvii) if any official committee of creditors or equity holders appointed in the
Chapter 11 Cases (a “Committee”) or any other person or entity is granted
standing to commence any of the litigation or causes of action referenced in the
immediately preceding clause (xvi);

 

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(xviii) the terms and conditions of the debtor-in-possession financing and exit
facilities (including, but not limited to, any Definitive Documents
memorializing such facilities) are not reasonably acceptable to the Requisite
Term Lenders;

(xix) the debtor-in-possession financing contemplated by the Term Sheet is
terminated;

(xx) the Company (unless the Company is acting at the direction or instruction
of the Requisite Term Lenders any of their respective employees, agents, or
representatives) files or seeks approval of, or supports (or fails to timely
object to) another party in filing or seeking approval of an Alternative
Transaction;

(xxi) the commencement of an involuntary bankruptcy case against the Company
under the Bankruptcy Code, if such involuntary case is not dismissed within
sixty (60) calendar days after the filing thereof, or if a court order grants
the relief sought in such involuntary case;

(xxii) if the Company (A) withdraws the Prepackaged Plan, (B) publicly announces
its intention not to support the Restructuring or the Prepackaged Plan,
(C) files a motion with the Bankruptcy Court seeking the approval of an
Alternative Transaction, or (D) agrees to pursue (including, for the avoidance
of doubt, as may be evidenced by a term sheet, letter of intent, or similar
document) or publicly announces its intent to pursue an Alternative Transaction;

(xxiii) if, at any time, (x) the Company terminates or Consenting Senior
Noteholders holding more than the Requisite Senior Noteholder Threshold
terminates the Senior Notes RSA or (y) the aggregate Senior Note Claims held by
the Consenting Senior Noteholders that are bound by the Senior Notes RSA are
less than the Requisite Senior Noteholders Threshold (each of clauses (x) and
(y), a “Senior Notes RSA Termination”); provided, further, that the Company
shall promptly notify Kirkland of the occurrence of any Senior Notes RSA
Termination (and in any event shall notify Kirkland no later than one
(1) Business Day after such occurrence);

(xxiv) the term sheet attached as Exhibit A to the Senior Notes RSA is modified
without the consent of the Requisite Term Lenders;

(xxv) the Bankruptcy Court enters an order modifying or terminating the
Company’s exclusive right to file and/or solicit acceptances of a plan of
reorganization (including the Prepackaged Plan);

(xxvi) prior to the Petition Date if the Company effects (or enters into any
agreement to effect) any of the following transactions to the extent a payment,
a transfer, or an assignment of an asset is required to be made by the Company
as a part of such transaction: (A) the voluntary sale, transfer, or assignment
of any loan, mortgage servicing right, or any other asset or liability that
requires an individual payment of greater than $5,000,000, or a series of
payments in excess of $10,000,000 in the

 

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aggregate, with respect to any specific asset or liability on the part of the
Company to induce the counterparty to complete the transaction, including sales,
transfers, or assignments related to certain mortgage servicing rights
associated with agency nonperforming loans; or (B) the sale of all or part of
Walter Reverse Acquisition, LLC, Reverse Mortgage Servicing, or any
subsidiaries, beneficial interests, equity interests, or related assets of the
foregoing entities, to the extent that the transaction requires the Company to
make a payment or transfer or assign an asset for the counterparty to complete
the transaction; provided, however, that if the Company effects (or enters into
any agreement to effect) a transaction disclosed to the Consenting Term Lenders’
advisors in an e-mail dated as of the date hereof, and that meets the definition
of a transaction described in the sub-item (A) or (B) of this sub-section
5(b)(xiii), then such a transaction (or an agreement to effect such a
transaction) shall not constitute a Lender Termination Event;

(xxvii) if, prior to the Petition Date, the Company effects (or enters into any
agreement to effect) any settlement of a pending or future dispute or litigation
that requires the payment by the Company prior to the Petition Date of an amount
in excess of $5,500,000 on an individual basis unless such settlement or
potential settlement disclosed to Kirkland or FTI in an e-mail dated as of the
date hereof;

(xxviii) the occurrence of a Material Adverse Effect;3

 

 

3  “Material Adverse Effect” means any uncured event, change, occurrence,
development, circumstance or change of fact occurring after the date hereof that
has had a material adverse effect on the business, results of operations or
financial condition of the Company and all of its affiliates, taken as a whole;
provided, however, that none of the following, either alone or in combination,
will constitute, or be considered in determining whether there has been, a
Material Adverse Effect: (i) event, change, occurrence, development,
circumstance or change of fact resulting from or related to any event, change,
effect, occurrence, development, circumstance or change of fact arising out of,
resulting from or relating to the commencement or existence of the Chapter 11
Cases, the announcement of this Agreement, the Senior Notes RSA, the Prepackaged
Plan and the Restructuring, the pendency of the Restructuring, compliance by any
Party with the covenants and agreements contained herein, or in the Senior Notes
RSA, the Prepackaged Plan or the Term Sheet, including any objections by the
Bankruptcy Court to this Agreement or any of the transactions contemplated
herein, (ii) any outbreak or escalation of war or hostilities or any act of
terrorism, (iii) changes in laws, generally accepted accounting principles or
enforcement or interpretation thereof, including effects in, arising from, or
relating to changes in the foregoing, (iv) changes that generally affect the
industries and markets in which the Company or any of its subsidiaries operates,
(v) changes in financial markets, general economic conditions (including
prevailing interest rates, exchange rates, commodity prices and fuel costs) or
political conditions, (vi) in and of itself or as a consequence thereof, any
change in the Company’s stock price or trading volume or listing on the New York
Stock Exchange (including, for the avoidance of doubt, any consequential effects
of a delisting, as it relates to the Convertible Notes, any decrease in the
ratings or ratings outlook for the Company, or any failure by the Company to
meet (or the publication of any report regarding) any projections, forecasts,
budgets, estimates or outlook of or relating to the Company, including with
respect to revenues or earnings or other internal or external financial or
operating projections, (vii) any actions, effects or changes arising from or
related to any actions taken by or failed to be taken pursuant to or in
accordance with this Agreement or at the request of, or consented to by, the
Consenting Term Lenders, (viii) the execution or delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement or the public
announcement or other publicity with respect to any of the foregoing, (ix) any
event, condition or circumstance that is disclosed in any securities filing of
the Company, (x) any effect arising from the filing of the Chapter 11 Case,
(xi) any failure, in and of itself, by the Company to achieve any budgets,
projections, forecasts, estimates, plans, predictions, performance metrics, or
operating statistics (whether or not shared with the Consenting Senior
Noteholders, the Consenting Term Lenders, or the foregoing parties’ affiliates
or advisors), or (xii) the occurrence of any act of God or other calamity or
force majeure event (whether or not declared as such), including any strike,
labor dispute, civil disturbance, embargo, natural disaster, fire, flood,
hurricane tornado or other weather event.

 

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(xxix) the Company amends, modifies, restates, or supplements the Senior Notes
RSA in a manner that is materially adverse and not acceptable to the Consenting
Term Lenders holding more than the Requisite Term Lenders Threshold or the term
sheet attached as Exhibit A to the Senior Notes RSA is modified without the
consent of the Requisite Term Lenders; or

(xxx) if the Company or any other Credit Party (as defined in the Credit
Agreement) makes, or causes to be made, any payment of principal or interest on
any indebtedness constituting Senior Notes or Convertible Notes.

(c)    A “Company Termination Event” shall mean any of the following:

(i) the breach in any material respect by one or more of the Consenting Term
Lenders, of any of the undertakings, representations, warranties, or covenants
of the Consenting Term Lenders set forth herein in any material respect which
remains uncured for a period of five (5) business days after the receipt of
written notice of such breach pursuant to Section 5(a) and 19 hereof (as
applicable), but only if the non-breaching Consenting Term Lenders own less than
662/3% of the Claims;

(ii) the board of directors of the Company or its subsidiaries reasonably
determines in good faith based upon the advice of outside counsel that continued
performance under this Agreement would be inconsistent with the exercise of its
fiduciary duties under applicable law; provided, that the Company shall provide
notice of such determination to Kirkland and Davis Polk via email within one
(1) business day after the date thereof;

(iii) the Company shall not have obtained votes accepting the Prepackaged Plan
from holders of the (x) Term Loans and (y) Senior Notes, in each case,
sufficient to satisfy the conditions for acceptance set forth in section 1126(c)
of the Bankruptcy Code on or before the voting deadline set forth in the
solicitation materials distributed in connection with the Prepackaged Plan;

(iv) the Support Effective Date shall not have occurred on or before October 25,
2017;

 

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(v) if the Effective Date shall not have occurred on or before January 31, 2018;

(vi) if, at any time, a Senior Notes RSA Termination occurs; provided, further,
that the Company shall promptly notify Kirkland and Davis Polk of the occurrence
of any Senior Notes RSA Termination (and in any event shall notify Kirkland and
Davis Polk no later than one (1) Business Day after such occurrence);

(vii) the term sheet attached as Exhibit A to the Senior Notes RSA is modified
without the consent of the Requisite Term Lenders; or

(viii) the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any ruling, judgment or order
enjoining the consummation of or rendering illegal the Prepackaged Plan or the
Restructuring, and such ruling, judgment or order has not been not stayed,
reversed or vacated within fifteen (15) calendar days after such issuance.

(d)    Mutual Termination. This Agreement may be terminated by mutual agreement
of the Company and the Requisite Term Lenders upon the receipt of written notice
delivered in accordance with Section 19 hereof.

(e)    Automatic Termination. This Agreement shall terminate automatically,
without any further action required by any Party, upon the occurrence of the
Effective Date.

(f)    Effect of Termination. Upon the termination of this Agreement in
accordance with this Section 5 (other than pursuant to Section 5(e)) if the
Restructuring has not been consummated, and except as provided in Section 13
hereof, this Agreement shall forthwith become void and of no further force or
effect and each Party shall, except as provided otherwise in this Agreement, be
immediately released from its liabilities, obligations, commitments,
undertakings and agreements under or related to this Agreement and shall have
all the rights and remedies that it would have had and shall be entitled to take
all actions, whether with respect to the Restructuring or otherwise, that it
would have been entitled to take had it not entered into this Agreement,
including all rights and remedies available to it under applicable law, the
Credit Agreement and any ancillary documents or agreements thereto; provided,
however, that in no event shall any such termination relieve a Party from
liability for its breach or non-performance of its obligations hereunder prior
to the date of such termination. Upon any such termination of this Agreement,
each vote or any consents given by any Consenting Term Lender prior to such
termination shall be deemed, for all purposes, to be null and void ab initio and
shall not be considered or otherwise used in any manner by the Parties in
connection with the Restructuring and this Agreement, in each case, without
further confirmation or other action by such Consenting Term Lender. If this
Agreement has been terminated as to any Consenting Term Lender in accordance
with Section 5 (other than pursuant to Section 5(e)) at a time when permission
of the Bankruptcy Court shall be required for a Consenting Term Lender to change
or withdraw (or cause to change or withdraw) its vote

 

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to accept the Prepackaged Plan, the Company shall support and not oppose any
attempt by such Consenting Term Lender to change or withdraw (or cause to change
or withdraw) such vote at such time, subject to all remedies available to the
Company at law, equity, or otherwise, including those remedies set forth in
Section 12 hereof. The Consenting Term Lender shall have no liability to the
Company or to each other in respect of any termination of this Agreement in
accordance with the terms of this Section 5 and Section 19 hereof.

(g)    If the Restructuring has not been consummated prior to the date of
termination of this Agreement, nothing herein shall be construed as a waiver by
any Party of any or all of such Party’s rights and the Parties expressly reserve
any and all of their respective rights. Pursuant to Federal Rule of Evidence 408
and any other applicable rules of evidence, this Agreement and all negotiations
relating hereto shall not be admissible into evidence in any proceeding other
than a proceeding to enforce its terms.

 

  6. Definitive Documents; Good Faith Cooperation; Further Assurances.

Subject to the terms and conditions described herein, during the Support Period,
each Party, severally and not jointly, hereby covenants and agrees to reasonably
cooperate with each other in good faith in connection with, and shall exercise
commercially reasonable efforts with respect to the pursuit, approval,
implementation, and consummation of the Prepackaged Plan and the Restructuring,
as well as the negotiation, drafting, execution (to the extent such Party is a
party thereto), and delivery of the Definitive Documents. Furthermore, subject
to the terms and conditions hereof, each of the Parties shall take such action
as may be reasonably necessary or reasonably requested by the other Parties to
carry out the purposes and intent of this Agreement, including making and filing
any required regulatory filings and voting any claims against or securities of
the Company in favor of the Restructuring, and shall refrain from taking any
action that would frustrate the purposes and intent of this Agreement; provided
that no Consenting Term Lender shall be required to incur any material cost,
expense, or liability in connection therewith.

 

  7. Representations and Warranties.

(a)    Each Party, severally and not jointly, represents and warrants to the
other Parties that the following statements are true, correct and complete as of
the date hereof (or as of the date a Consenting Term Lender becomes a party
hereto):

(i) such Party is validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, and has all requisite corporate,
partnership, limited liability company or similar authority to enter into this
Agreement and carry out the transactions contemplated hereby and perform its
obligations contemplated hereunder; and the execution and delivery of this
Agreement and the performance of such Party’s obligations hereunder have been
duly authorized by all necessary corporate, limited liability company,
partnership or other similar action on its part;

 

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(ii) the execution, delivery and performance by such Party of this Agreement
does not and will not (A) violate any material provision of law, rule or
regulation applicable to it or any of its subsidiaries or its charter or bylaws
(or other similar governing documents) or those of any of its subsidiaries, or
(B) conflict with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any material contractual obligation to which it
or any of its subsidiaries is a party;

(iii) the execution, delivery and performance by such Party of this Agreement
does not and will not require any material registration or filing with, consent
or approval of, or notice to, or other action, with or by, any federal, state or
governmental authority or regulatory body, except such filings as may be
necessary and/or required by the SEC; and

(iv) this Agreement is the legally valid and binding obligation of such Party,
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or limiting creditors’ rights generally or by equitable
principles relating to enforceability or a ruling of the Bankruptcy Court.

(b)    Each Consenting Term Lender severally (and not jointly), represents and
warrants to the Company that, as of the date hereof (or as of the date such
Consenting Term Lender becomes a party hereto), such Consenting Term Lender
(i) is the beneficial owner of the aggregate principal amount of Term Loans set
forth below its name on the signature page hereof (or below its name on the
signature page of a Joinder Agreement for any Consenting Term Lender that
becomes a party hereto after the date hereof) and does not beneficially own any
other Term Loans, and/or (ii) has, with respect to the beneficial owners of such
Term Loans, (A) sole investment or voting discretion with respect to such Term
Loans, (B) full power and authority to vote on and consent to matters concerning
such Term Loans or to exchange, assign and transfer such Term Loans, and
(C) full power and authority to bind or act on the behalf of, such beneficial
owners.

(c)    Each Consenting Term Lender severally (and not jointly) makes the
representations and warranties set forth in Section 21(c) hereof, in each case,
to the other Parties.

 

  8. Disclosure; Publicity.

(a)    Subject to the provisions set forth in Section 8(b) hereof, the Company
shall disseminate a Current Report on Form 8-K or a press release disclosing the
existence of this Agreement and the terms hereof and of the Term Sheet
(including any schedules and exhibits thereto that are filed with the Bankruptcy
Court on the Petition Date) with such redactions as may be reasonably requested
by Kirkland to maintain the confidentiality of the items identified in
Section 8(b) hereof, except as otherwise required by law. In the event that the
Company fails to make the foregoing disclosures in compliance with the terms
specified herein, any such Consenting Term Lender may

 

22

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publicly disclose the foregoing, including, without limitation, this Agreement
and all of its exhibits and schedules (subject to the redactions called for by
Section 8 hereof), and the Company hereby waives any claims against the
Consenting Term Lenders arising as a result of such disclosure by a Consenting
Term Lender in compliance with this Agreement.

(b)    The Company shall submit drafts to Kirkland of any press releases, public
documents and any and all filings with the SEC that constitute disclosure of the
existence or terms of this Agreement or any amendment to the terms of this
Agreement, or any other matter relating to the Term Loans, at least one
(1) business day prior to making any such disclosure, and any such press
releases, public documents, and other SEC filings shall be reasonably acceptable
in all material respects to the Requisite Term Lenders. Except as required by
applicable law or otherwise permitted under the terms of any other agreement
between the Company and any Consenting Term Lender, no Party or its advisors
shall disclose to any person (including, for the avoidance of doubt, any other
Consenting Term Lender), other than advisors to the Company, the principal
amount of the Term Loans held by the Consenting Term Lender, without such
Consenting Term Lender’s prior written consent; provided, however, that (i) if
such disclosure is required by law, subpoena, or other legal process or
regulation, the disclosing Party shall afford the relevant Consenting Term
Lender a reasonable opportunity to review and comment in advance of such
disclosure and shall take all reasonable measures to limit such disclosure (the
expense of which, if any, shall be borne by the relevant Consenting Term Lender)
and (ii) the foregoing shall not prohibit the disclosure of the aggregate
percentage or aggregate outstanding principal amount of the Term Loans held by
all the Consenting Term Lenders collectively. Notwithstanding the provisions in
this Section 8, any Party may disclose, to the extent consented to in writing by
a Consenting Term Lender, such Consenting Term Lender’s individual holdings).

 

  9. Amendments and Waivers.

This Agreement, including any exhibits or schedules hereto, may not be waived,
modified, amended or supplemented except with the written consent of the Company
and the Requisite Term Lenders; provided, however, that any waiver,
modification, amendment or supplement to this Section 9 shall require the
written consent of all of the Parties; provided, further, that any modification,
amendment or change to the definition of Requisite Term Lenders shall require
the written consent of each Consenting Term Lender; provided, further, that any
change, modification or amendment to this Agreement, the Term Sheet or the
Prepackaged Plan that treats or affects any Consenting Term Lender in a manner
that is disproportionately adverse, on an economic or non-economic basis, to the
manner in which any of the other Consenting Term Lenders are treated (after
taking into account each of the Consenting Term Lender’s respective holdings and
interests in the Company and the recoveries contemplated by the Term Sheet (as
in effect on the date hereof)) shall require the written consent of such
Consenting Term Lender; provided, further, that if any change, modification or
amendment to this Agreement, the Term Sheet or the Prepackaged Plan does not
materially, adversely affect the rights of a Consenting Term Lender, the consent
of such Consenting Term Lender shall not be required. In

 

23

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the event that an adversely affected Consenting Term Lender (“Non-Consenting
Term Lender”) does not consent to a waiver, change, modification or amendment to
this Agreement requiring the consent of each Consenting Term Lender, but such
waiver, change, modification or amendment receives the consent of Consenting
Term Lenders owning at least 662/3% of the aggregate outstanding principal
amount of the Term Loans, this Agreement shall be deemed to have been terminated
only as to such Non-Consenting Term Lender, but this Agreement shall continue in
full force and effect in respect to all other Consenting Term Lenders who have
so consented, in a way consistent with (or otherwise reasonably acceptable to
the Requisite Term Lenders) this Agreement and the Term Sheet as waived,
changed, modified, or amended, as applicable.

 

  10. Effectiveness.

This Agreement shall become effective and binding on the Parties on the Support
Effective Date, and not before such date; provided that signature pages executed
by Consenting Term Lenders shall be delivered to (a) the other Consenting Term
Lenders in a redacted form that removes such Consenting Term Lenders’ holdings
of the Term Loans or any other Claims against or interests in the Company and
any schedules to such Consenting Term Lenders’ holdings (if applicable) and
(b) the Company, Weil, and Kirkland in an unredacted form (and to be kept
confidential by the Company, Weil and Kirkland).

 

  11. Governing Law; Jurisdiction; Waiver of Jury Trial.

(a)    This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New
York, without giving effect to the conflict of laws principles thereof.

(b)    Each of the Parties irrevocably agrees that any legal action, suit or
proceeding arising out of or relating to this Agreement brought by any party or
its successors or assigns shall be brought and determined in any federal or
state court in the State of New York, and each of the Parties hereby irrevocably
submits to the exclusive jurisdiction of the aforesaid courts for itself and
with respect to its property, generally and unconditionally, with regard to any
such proceeding arising out of or relating to this Agreement or the
Restructuring Transactions. Each of the Parties agrees not to commence any
proceeding relating hereto or thereto except in the courts described above in
New York, other than proceedings in any court of competent jurisdiction to
enforce any judgment, decree or award rendered by any such court in New York as
described herein. Each of the Parties further agrees that notice as provided
herein shall constitute sufficient service of process and the Parties further
waive any argument that such service is insufficient. Each of the Parties hereby
irrevocably and unconditionally waives, and agrees not to assert, by way of
motion or as a defense, counterclaim or otherwise, in any proceeding arising out
of or relating to this Agreement or the Restructuring Transactions, (i) any
claim that it is not personally subject to the jurisdiction of the courts in New
York as described herein for any reason, (ii) that it or its property is exempt
or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of

 

24

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execution of judgment, execution of judgment or otherwise) and (iii) that (A)
the proceeding in any such court is brought in an inconvenient forum, (B) the
venue of such proceeding is improper or (C) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts. Notwithstanding the
foregoing, during the pendency of the Chapter 11 Case, all proceedings
contemplated by this Section 11(b) shall be brought in the Bankruptcy Court.

(c)    EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

  12. Specific Performance/Remedies.

It is understood and agreed by the Parties that money damages would not be a
sufficient remedy for any breach of this Agreement by any Party and each
non-breaching Party shall be entitled to specific performance and injunctive or
other equitable relief (including attorneys’ fees and costs) as a remedy of any
such breach, without the necessity of proving the inadequacy of money damages as
a remedy, including an order of the Bankruptcy Court requiring any Party to
comply promptly with any of its obligations hereunder.

 

  13. Survival.

Notwithstanding the termination of this Agreement pursuant to Section 5 hereof,
the agreements and obligations of the Parties in this Section 13, and
Sections 4(b), 5(d), 8, 10, 11, 12, 14, 15, 16, 17, 18, 19, 20, and 21 hereof
(and any defined terms used in any such Sections) shall survive such termination
and shall continue in full force and effect in accordance with the terms hereof;
provided, however, that any liability of a Party for failure to comply with the
terms of this Agreement shall survive such termination.

 

  14. Headings.

The headings of the sections, paragraphs and subsections of this Agreement are
inserted for convenience only and shall not affect the interpretation hereof or,
for any purpose, be deemed a part of this Agreement.

 

25

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  15. Successors and Assigns; Severability; Several Obligations.

This Agreement is intended to bind and inure to the benefit of the Parties and
their respective successors, permitted assigns, heirs, executors, administrators
and representatives; provided, however, that nothing contained in this
Section 15 shall be deemed to permit Transfers of the Term Loans or claims
arising under the Term Loans other than in accordance with the express terms of
this Agreement. If any provision of this Agreement, or the application of any
such provision to any Person or circumstance, shall be held invalid or
unenforceable in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision hereof and this Agreement shall continue in full force and effect so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any Party. Upon any such
determination of invalidity, the Parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the Parties as closely as
possible in a reasonably acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible. The agreements, representations and obligations of the Parties
are, in all respects, ratable and several and neither joint nor joint and
several.

 

  16. No Third-Party Beneficiaries.

Unless expressly stated herein, this Agreement shall be solely for the benefit
of the Parties (and their respective successors, permitted assigns, heirs,
executors, administrators and representatives) and no other Person shall be a
third-party beneficiary hereof.

 

  17. Prior Negotiations; Entire Agreement.

This Agreement, including the exhibits and schedules hereto (including the Term
Sheet) constitutes the entire agreement of the Parties, and supersedes all other
prior negotiations, with respect to the subject matter hereof and thereof,
except that the Parties acknowledge that any confidentiality agreements (if any)
heretofore executed between the Company and each Consenting Term Lender shall
continue in full force and effect.

 

  18. Counterparts.

This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, and all of which together shall be deemed to be one
and the same agreement. Execution copies of this Agreement may be delivered by
facsimile or by electronic mail in portable document format (pdf), which shall
be deemed to be an original for the purposes of this paragraph.

 

26

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  19. Notices.

All notices hereunder shall be deemed given if in writing and delivered, if
contemporaneously sent by electronic mail, facsimile, courier or by registered
or certified mail (return receipt requested) to the following addresses and
facsimile numbers:

(1)    If to the Company, to:

Walter Investment Management Corp.

3000 Bayport Drive, Suite 1100

Tampa, FL 33607

Attn: John Haas, General Counsel, Chief Legal Counsel and Secretary

Email: JHaas@walterinvestment.com

With a copy to (which shall not constitute notice):

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attn: Ray C. Schrock, P.C.

Email: Ray.Schrock@weil.com

Attn: Joseph H. Smolinsky, Esq.

Email: Joseph.Smolinsky@weil.com

Attn: Sunny Singh, Esq.

Email: Sunny.Singh@weil.com

 

27

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(2)    If to a Consenting Term Lender, or a transferee thereof, to the addresses
or facsimile numbers set forth below following the Consenting Term Lender’s
signature (or as directed by any transferee thereof), as the case may be, with
copies to:

Kirkland & Ellis LLP

300 North LaSalle

Chicago, Il 606545

Attn: Patrick J Nash Jr., P.C.

Email: patrick.nash@kirkland.com

Attn: Gregory Pesce

Email: gregory.pesce@kirkland.com

(3)    If to the Administrative Agent:

Credit Suisse AG

11 Madison Avenue,

New York, NY 10010

Attn: Megan Kane

Email: megan.kane@credit-suisse.com

Attn: Peter Winstanley

Email: peter.winstanley@credit-suisse.com

With a copy to (which shall not constitute notice):

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Attn: Brian M. Resnick

Email: brian.resnick@davispolk.com

Attn: Michelle McGreal

Email: michelle.mcgreal@davispolk.com

Any notice given by delivery, mail or courier shall be effective when received.
Any notice given by facsimile or electronic mail shall be effective upon oral,
machine or electronic mail (as applicable) confirmation of transmission.

 

  20. Creditors’ Committee.

Notwithstanding anything herein to the contrary, if any Consenting Term Lender
is appointed to and serves on an official committee of unsecured creditors in
the Chapter 11 Case, the terms of this Agreement shall not be construed so as to
limit such Consenting Term Lender’s exercise of its fiduciary duties to any
person arising from its service on such committee, and any such exercise of such
fiduciary duties shall not be deemed to constitute a breach of the terms of this
Agreement. All Parties agree they shall not oppose the participation of any of
the Consenting Term Lenders on any official committee of unsecured creditors
formed in the Chapter 11 Case

 

28

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  21. Reservation of Rights; No Admission.

(a)    Nothing contained herein shall (i) limit (A) the ability of any Party to
consult with other Parties, or (B) the rights of any Party under any applicable
bankruptcy, insolvency, foreclosure, or similar proceeding, including the right
to appear as a party in interest in any matter to be adjudicated in order to be
heard concerning any matter arising in the Chapter 11 Case, in each case, so
long as such consultation or appearance is consistent with such Party’s
obligations hereunder, or under the terms of the Prepackaged Plan; (ii) limit
the ability of any Consenting Term Lender to sell or enter into any transactions
in connection with the Noteholder Claims, or any other claims against or
interests in the Company, subject to the terms of Section 3(b) hereof;
(iii) limit the rights of any Consenting Term Lender under the Credit Agreement
or any agreements executed in connection with the Credit Agreement; or
(iv) constitute a waiver or amendment of any provision of the Credit Agreement
or any agreements executed in connection with the Credit Agreement.

(b)    Except as expressly provided in this Agreement, nothing herein is
intended to, or does, in any manner waive, limit, impair, or restrict the
ability of each of the Parties to protect and preserve its rights, remedies, and
interests, including its claims against any of the other Parties (or their
respective affiliates or subsidiaries) or its full participation in any
bankruptcy case filed by the Company or any of its affiliates and subsidiaries.
This Agreement, the Term Sheet, and the Prepackaged Plan are part of a proposed
settlement of matters that could otherwise be the subject of litigation among
the Parties. Pursuant to Rule 408 of the Federal Rule of Evidence, any
applicable state rules of evidence, and any other applicable law, foreign or
domestic, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any proceeding other than a proceeding to enforce
its terms. This Agreement shall in no event be construed as or be deemed to be
evidence of an admission or concession on the part of any Party of any claim or
fault or liability or damages whatsoever. Each of the Parties denies any and all
wrongdoing or liability of any kind and does not concede any infirmity in the
claims or defenses which it has asserted or could assert.

 

  22. Relationship Among Consenting Term Lenders.

(a)    It is understood and agreed that no Consenting Term Lender has any duty
of trust or confidence in any kind or form with any other Consenting Term
Lender, and, except as expressly provided in this Agreement, there are no
commitments among or between them. In this regard, it is understood and agreed
that any Consenting Term Lender may trade in the Noteholder Claims or other debt
of the Company without the consent of the Company or any other Consenting Term
Lender, subject to applicable securities laws, the terms of this Agreement, and
any confidentiality agreement entered into with the Company; provided that no
Consenting Term Lender shall have any responsibility for any such trading to any
other person or entity by virtue of this Agreement. No prior history, pattern,
or practice of sharing confidences among or between the Consenting Term Lender
shall in any way affect or negate this understanding and agreement.

(b)    Notwithstanding anything to the contrary herein, nothing in this
Agreement shall require any Consenting Term Lender or representative of a
Consenting Term

 

29

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Lender that becomes a member of a statutory committee that may be established in
the Chapter 11 Case to take any action, or to refrain from taking any action, in
such person’s capacity as a statutory committee member; provided that nothing in
this Agreement shall be construed as requiring any Consenting Term Lender to
serve on any statutory committee in the Chapter 11 Case.

 

  23. No Solicitation; Representation by Counsel; Adequate Information.

(a)    This Agreement is not and shall not be deemed to be a solicitation for
votes in favor of the Prepackaged Plan in the Chapter 11 Case by the Term
Lenders or a solicitation to tender or exchange any of the Term Loans. The
acceptances of the Consenting Term Lenders with respect to the Prepackaged Plan
will not be solicited until such Consenting Term Lender has received the
Disclosure Statement and related ballots and solicitation materials, each as
approved or ratified by the Bankruptcy Court.

(b)    Each Party acknowledges that it has had an opportunity to receive
information from the Company and that it has been represented by counsel in
connection with this Agreement and the transactions contemplated hereby.
Accordingly, any rule of law or any legal decision that would provide any Party
with a defense to the enforcement of the terms of this Agreement against such
Party based upon lack of legal counsel shall have no application and is
expressly waived.

(c)    Although none of the Parties intends that this Agreement should
constitute, and they each believe it does not constitute, a solicitation or
acceptance of a chapter 11 plan of reorganization or an offering of securities,
each Consenting Term Lender acknowledges, agrees and represents to the other
Parties that it (i) is a “qualified institutional buyer” as such term is defined
in Rule 144A of the Securities Act or a non-US person participating in the
offering outside the United States in reliance on Regulation S under the
Securities Act, (ii) is an accredited investor (as such term is defined in Rule
501(a) of Regulation D promulgated under the Securities Act), (iii) understands
that the securities to be acquired by it (if any) pursuant to the Restructuring
Transactions have not been registered under the Securities Act and that such
securities are, to the extent not acquired pursuant to section 1145 of the
Bankruptcy Code, being offered and sold pursuant to an exemption from
registration contained in the Securities Act, based in part upon such Consenting
Term Lender’s representations contained in this Agreement and cannot be sold
unless subsequently registered under the Securities Act or an exemption from
registration is available and (iv) has such knowledge and experience in
financial and business matters that such Consenting Term Lender is capable of
evaluating the merits and risks of the securities to be acquired by it (if any)
pursuant to the Restructuring Transactions and understands and is able to bear
any economic risks with such investment.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

30

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed and
delivered by their respective duly authorized officers, solely in their
respective capacity as officers of the undersigned and not in any other
capacity, as of the date first set forth above.

 

WALTER INVESTMENT MANAGEMENT CORP. By:  

/s/ Anthony N. Renzi

  Name: Anthony N. Renzi   Title: Chief Executive Officer

--------------------------------------------------------------------------------

CONSENTING TERM LENDERS

 

DOUBLE BLACK DIAMOND OFFSHORE LTD. By:   Carlson Capital, L.P., its investment
advisor By:  

/S/ Lynne B. Alpar

Name:   Lynne B. Alpar Title:   Chief Financial Officer of Carlson Capital, L.P
CATHEDRAL LAKE II, LTD. By:  

/S/ Lynne B. Alpar

Name:   Lynne B. Alpar Title:   Chief Financial Officer of Carlson Capital, L.P.
CATHEDRAL LAKE III, LTD. By:  

/S/ Lynne B. Alpar

Name:   Lynne B. Alpar Title:   Chief Financial Officer of Carlson Capital, L.P.
CATHEDRAL LAKE IV, LTD. By:  

/S/ Lynne B. Alpar

Name:   Lynne B. Alpar Title:   Chief Financial Officer of Carlson Capital, L.P.

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

TAO Fund, LLC

 

By:  

/S/ Joshua Peck

Name:   Joshua Peck Title:   Vice President

 

CREDIT SUISSE ASSET MANAGEMENT, LLC In its capacity as investment manager,
sub-adviser or similar capacity on behalf of holders of the Term Loan B of
Walter Investment Management Corp By  

/S/ Louis Farano

Name:   Louis Farano Title:   Authorized Signatory MARATHON ASSET MANAGEMENT, LP
By:  

/S/ Randy Raisman

Name:   Randy Raisman Title:   Authorized Signatory

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

Nuveen Diversified Dividend and Income Fund

Nuveen Floating Rate Income Fund

Nuveen Credit Strategies Income Fund

Nuveen Symphony Floating Rate Income Fund

Nuveen Credit Opportunities 2022 Target Term Fund

Nuveen Short Duration Credit Opportunities Fund

Nuveen Floating Rate Income Opportunity Fund

Nuveen Senior Income Fund

 

Symphony Asset Management LLC, As Sub-Advisor By:  

/S/ Gunther Stein

Name:   Gunther Stein Title:   Authorized Signatory

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

SCOF-2, LTD

California Street CLO IX Limited Partnership

Symphony CLO VIII. Limited Partnership

California Street CLO XII, Ltd.

Symphony CLO XIV, Ltd.

Symphony CLO XV, Ltd.

Symphony CLO XVI, LTD.

Symphony CLO XVII, LTD.

Symphony CLO XVIII, LTD.

 

Symphony Asset Management LLC, As Collateral Manager By:  

/S/ Gunther Stein

Name:   Gunther Stein Title:   Chief Investment Officer and Chief Executive
Officer

 

BayCity Corporate Arbitrage and Relative Value Fund, L.P. Symphony Asset
Management LLC, As General Partner By:  

/S/ Gunther Stein

Name:   Gunther Stein Title:   Chief Investment Officer and Chief Executive
Officer

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

BayCity Alternative Investment Funds SICAV-SIF-BayCity US Senior Loan Fund

Goldman Sachs Multi-Manager Non-Core Fixed Income Fund

Menard, Inc.

Municipal Employees Annuity & Benefit Fund of Chicago

PENSIONDANMARK PENSIONSFORSIKRINGSAKTIESELSKAB

Principal Funds, Inc. – Diversified Real Asset Fund

Diversified Real Asset CIT

Symphony Floating Rate Senior Loan Fund

BayCity Long-Short Credit Master Fund, LTD.

BAYCITY SENIOR LOAN MASTER FUND LIMITED

TCI-Symphony CLO 2016-a Ltd.

 

Symphony Asset Management LLC, As Investment Advisor By:  

/S/ Gunther Stein

Name:   Gunther Stein Title:   Authorized Signatory

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

AGF FLOATING RATE INCOME FUND

 

By: Eaton Vance Management as Investment Advisor By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

EATON VANCE CDO X PLC

 

By: Eaton Vance Management as Investment Advisor By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

DaVinci Reinsurance Ltd.

 

By: Eaton Vance Management as Investment Advisor By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance Loan Holding Limited

 

By: Eaton Vance Management as Investment Manager By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

Eaton Vance Senior Floating-Rate Trust

 

By: Eaton Vance Management as Investment Advisor By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance Floating-Rate Income Plus Fund

 

By: Eaton Vance Management as Investment Advisor By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance Floating-Rate Income Trust

 

By: Eaton Vance Management as Investment Advisor By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance International (Cayman Island) Floating-Rate Income Portfolio

 

By: Eaton Vance Management as Investment Advisor By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

Eaton Vance Short Duration Diversified

Income Fund

By: Eaton Vance Management as Investment Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance Institutional Senior Loan Fund

By: Eaton Vance Management as Investment Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance Limited Duration Income Fund

By: Eaton Vance Management as Investment Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance Floating Rate Portfolio

By: Boston Management and Research as Investment Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

Brighthouse Funds Trust I – Brighthouse/Eaton

Vance Floating Rate Portfolio

By: Eaton Vance Management as Investment

Sub-Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Florida Power & Light Company

By: Eaton Vance Management as Investment

Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Pacific Select Fund Floating Rate Loan Portfolio

By: Eaton Vance Management as Investment

Sub-Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Renaissance Investment Holdings Ltd

By: Eaton Vance Management as Investment

Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

Columbia Funds Variable Series Trust II – Variable

Portfolio-Eaton Vance Floating-Rate Income Fund

By: Eaton Vance Management as Investment

Sub-Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Senior Debt Portfolio

By: Boston Management and Research as Investment

Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance VT Floating-Rate Income Fund

By: Eaton Vance Management as

Investment Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

Eaton Vance Senior Income Trust

By: Eaton Vance Management as Investment

Advisor

 

By:  

/S/ Michael B. Botthof

Name:   Michael B. Botthof Title:   Vice President

[Signature Page to Restructuring Support Agreement]

--------------------------------------------------------------------------------

EXHIBIT A

RESTRUCTURING TERM SHEET

 

--------------------------------------------------------------------------------

Execution Version

 

 

WALTER INVESTMENT MANAGEMENT CORP.

PREPACKAGED PLAN RESTRUCTURING TERM SHEET

 

 

This Term Sheet is attached as Exhibit A to (a) the restructuring support
agreement dated October 20, 2017 (as amended and restated), by and among holders
(the “Consenting Term Lenders”) of outstanding Term Loans (as defined in the
Credit Agreement (defined below)) and WIMC (the “Term Lender RSA”), and (b) the
restructuring support agreement dated October 20, 2017 (as amended or restated),
by and among holders (“Consenting Senior Noteholders”) of outstanding Senior
Notes (defined below) and WIMC (the “Senior Noteholder RSA” and, collectively
with the Term Loan RSA, the “Restructuring Support Agreements”). Capitalized
terms used in this Term Sheet not defined shall have the meaning ascribed to
them in Annex A.

This Term Sheet is not an offer or a solicitation with respect to any securities
of the Company, nor is it a solicitation of acceptances of a plan of
reorganization as contemplated by sections 1125 and/or 1126 of the Bankruptcy
Code. Any such offer or solicitation shall comply with all applicable securities
laws and/or provisions of the Bankruptcy Code.

This Term Sheet is a settlement proposal in furtherance of settlement
discussions. Accordingly, this Term Sheet is protected by rule 408 of the
Federal Rules of Evidence and any other applicable statutes or doctrines
protecting the use or disclosure of confidential settlement discussions.

This Term Sheet does not purport to summarize all of the terms, conditions,
representations, warranties, and other provisions with respect to the
transactions described herein, which transactions will be subject to the
completion of definitive documents incorporating the terms set forth herein and
the closing of any transaction shall be subject to the terms and conditions set
forth in such definitive documents. No binding obligations will be created by
this Term Sheet unless and until binding definitive documents are executed and
delivered by all applicable parties.

 

Introduction Overview    This Term Sheet summarizes the terms of a restructuring
(the “Restructuring”) of the Company to be effectuated pursuant to the Plan. The
Restructuring contemplates solicitation of acceptances of the Plan from holders
of Term Loan Claims, Senior Notes Claims, and Convertible Notes Claims through a
prepackaged solicitation. Annexures & Exhibits   

•       Annex A: Certain Defined Terms

 

•       Exhibit 1: Amended and Restated Credit Facility Term Sheet

 

•       Exhibit 2: New Second Lien Notes Term Sheet

 

•       Exhibit 3: Mandatorily Convertible Preferred Stock Term Sheet

 

•       Exhibit 4: Warrants Term Sheet

The Company    Walter Investment Management Corp. (the “Debtor” or the
“Company”).

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Claims and Interests to be Restructured   

First Lien Senior Secured Term Loan Claims: Consisting of $[1,295,215,000] in
aggregate unpaid principal amount, plus interest, fees and other expenses,
arising under or in connection with that certain Amended and Restated Credit
Agreement, dated as of December 19, 2013 (as amended, restated, amended and
restated, supplemented, or otherwise modified from time to time in accordance
with the terms thereof, the “Credit Agreement,” and the term loan facility
thereunder, the “Term Loan Facility”), by and among the Company, as the
borrower, Credit Suisse AG, as administrative agent (together with any successor
administrative agent, in each case, in such capacity, the “Administrative
Agent”), the lenders party thereto (each a “Term Lender” and collectively, the
“Term Lenders”) (the “Term Loan Claims”).

 

Senior Notes Claims: Consisting of $[538,700,000] in aggregate outstanding
principal, plus interest, fees and other expenses, of 7.875% Senior Notes due
2021 (the “Senior Notes”) issued pursuant to that certain Indenture (as amended,
restated, amended and restated, supplemented or otherwise modified from time to
time, the “Senior Notes Indenture”) by and between the Company, the guarantors
on the signature pages thereto (the “Senior Notes Guarantors”), and Wilmington
Savings Fund Society, FSB, a national banking association, as successor trustee,
dated as of December 17, 2013 (the “Senior Notes Claims”). The holders of the
Senior Notes are collectively referred to herein as the “Senior Noteholders” and
each individually as a “Senior Noteholder”.

 

Convertible Notes Claims: Consisting of $[242,500,000] in aggregate outstanding
principal, plus interest, fees and other expenses of 4.50% convertible senior
subordinated notes due 2019 (“Convertible Notes”) issued pursuant to that
certain Subordinated Indenture, dated as of January 13, 2012, by and among
Walter, as issuer, Wells Fargo Bank, National Association, as Trustee, and a
Supplemental Indenture thereto, dated as of January 13, 2012 (the “Convertible
Notes Claims”). The holders of Convertible Notes Claims are collectively
referred to herein as the “Convertible Noteholders” and each individually as a
“Convertible Noteholder”.

 

General Unsecured Claims: Consisting of any Claim against the Company (other
than the Senior Notes Claims, the Convertible Notes Claims or any Intercompany
Claims) as of the Commencement Date that is neither secured by collateral nor
entitled to priority under the Bankruptcy Code or any order of the Bankruptcy
Court (the “General Unsecured Claims”).

 

Existing Equity Interests: Consisting of any common stock, preferred stock or
other ownership interest of or in the Company pursuant to the Company
Certificate of Incorporation or otherwise that are issued and outstanding as of
the Petition Date (the “Existing Equity Interests”).

Transaction Overview Implementation:   

The Company will commence the Chapter 11 Case and implement the Restructuring
pursuant to the Plan as provided in the Restructuring Support Agreements.

 

The solicitation of votes on the Plan from the Senior Noteholders and the
Convertible Noteholders will be made pursuant to Section 4(a)(2) and/or
Regulation D of the Securities Act of 1933, as amended (the “Securities Act”).

 

2

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DIP/Exit Financing    The Company will be a guarantor of certain new warehouse
refinancing agreements to be entered into by Ditech Financial LLC and Reverse
Mortgage Solutions Inc., as borrowers (the “DIP/Exit Facility”), which shall
provide for the refinancing of existing warehouse lines of Ditech Financial LLC
and Reverse Mortgage Solutions Inc.; provided that, the terms and conditions of
the DIP/Exit Facility (including, but not limited to, any Definitive Documents
memorializing the DIP/Exit Facility) shall be acceptable in all material
respects to the Requisite Creditors.

Use of Cash

Collateral

  

The Company will be authorized to use cash collateral (as defined in section
363(a) of the Bankruptcy Code) of the Term Lenders with the consent of the
Administrative Agent, acting at the direction of the Required Lenders (as
defined under the Credit Agreement), subject to the following terms and
conditions and such other terms and conditions that are mutually acceptable to
the Company and the Required Lenders, and reasonably acceptable to the Requisite
Senior Noteholders:

 

•       Adequate Protection Lien. The Administrative Agent (on behalf of itself
and the Term Lenders) shall receive a replacement security interest in and lien
on all assets and property of the Debtor, whether arising prepetition or
postpetition of any nature whatsoever, which liens and security interests shall
be subordinate only to Permitted Liens (as defined in the Credit Agreement) to
the extent any such Permitted Liens are senior in priority under applicable
non-bankruptcy law to the liens securing the Obligations under the Credit
Agreement and a customary professional fee “carve-out” in an amount to be agreed
upon by the Company and the Requisite Term Lenders (the “Carve Out”). The
adequate protection liens shall not be (i) subject or junior to any lien or
security interest that is avoided and preserved for the benefit of the Debtor’s
estate under section 551 of the Bankruptcy Code or (ii) subordinated to or made
pari passu with any other lien or security interest, whether under section
364(d) of the Bankruptcy Code or otherwise, except as expressly provided in the
Financing Orders.

 

•       507(b) Claim. The Administrative Agent (on behalf of itself and the Term
Lenders) shall receive an administrative expense claim pursuant to Bankruptcy
Code section 507(b) with priority over all other administrative expenses,
subject to the Carve Out.

 

•       Adequate Protection Payments. The Debtor’s prompt payment of, whether
incurred prior to or following the Petition Date, (i) all reasonable fees and
expenses of the Administrative Agent (in accordance with the Credit Agreement),
Kirkland and FTI, as provided herein, and (ii) of accrued interest at the
non-default rate.

 

•       Financial Reporting. Until the Effective Date, the Debtor shall continue
to provide the Administrative Agent, Kirkland, and FTI with financial and other
reporting in compliance with the Prepetition Documents and any reporting
described in the Financing Orders;

 

3

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   provided that, a copy of any such financial information and reports shall
simultaneously be provided to Milbank, Tweed, Hadley & McCloy LLP, and Moelis &
Company. Amended and Restated Credit Facility Agreement    On the Effective Date
the Company and the Term Lenders will enter into or shall be deemed to have
entered into, pursuant to the Plan, the Amended and Restated Credit Facility
Agreement, which will be consistent with the Amended and Restated Credit
Facility Term Sheet attached hereto as Exhibit 1 (the “Amended and Restated
Credit Facility Agreement”). New Second Lien Notes    On the Effective Date, the
Company will issue secured second lien notes on the terms and conditions, and in
a form and manner consistent with, the New Second Lien Notes Term Sheet attached
hereto as Exhibit 2. On the Effective Date, the agent under the Amended and
Restated Credit Facility Agreement and the agent under the New Second Lien Notes
shall enter into an intercreditor agreement that is acceptable to the Requisite
Creditors. Mandatorily Convertible Preferred Stock    On the Effective Date, the
Company will issue Mandatorily Convertible Preferred Stock convertible into 73%
of the total number of issued and outstanding shares of New Common Stock as of
the Effective Date subject to dilution by shares of New Common Stock issued or
issuable pursuant to the Management Incentive Plan and by shares of New Common
Stock issued after the Effective Date, including shares of New Common Stock
issuable pursuant to the Warrants (if issued), which will be in a form and
manner consistent with the Mandatorily Convertible Preferred Stock Term Sheet
attached hereto as Exhibit 3 (the “Mandatorily Convertible Preferred Stock”).
Warrants    On the Effective Date, if the Class of Convertible Notes Claims is
not a Rejecting Class, the Company will issue 10 year warrants in two
(2) separate tranches, and which will be in a form and manner consistent with
the Warrants Term Sheet attached hereto as Exhibit 4 (the “Warrants”). New
Common Stock    On the Effective Date, the Company will issue new common stock
of the Company (the “New Common Stock”), as described herein. Treatment of
Claims and Interests

Class

  

Treatment

DIP/Exit Facility Claims    Unimpaired; Non-Voting. On the Effective Date the
debtor-in-possession refinancing facilities shall be automatically converted
into exit facilities in accordance with the terms and conditions of the DIP/Exit
Facility. Warehouse and Repurchase Facility Claims    Unimpaired, Non-Voting.
All prepetition warehouse and repurchase facility Claims will be refinanced in
full to the extent outstanding on the Effective Date. Other Priority Claims,
Priority Tax Claims, Other Secured Claims    Unimpaired; Non-Voting. All
priority tax claims, other priority claims, and other secured claims, other than
those claims otherwise referenced herein, will be unimpaired under the Plan
and/or paid in full in the ordinary course of business.

 

4

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Revolving Loan Claims    Unimpaired; Non-Voting. Holders of Revolving Loan
Claims will receive, in full and final satisfaction of their Allowed Revolving
Loan Claim, (i) payment in full of its Claim and termination of all letters of
credit issued under the Revolving Loan Facility, which letters of credit will be
refinanced, (ii) its pro rata share of an amended and restated revolving loan
facility (if each Revolving Lender consents to enter into such facility), or
(iii) such other consideration satisfactory to each holder of an Allowed
Revolving Loan Claim. Term Loan Claims    Impaired; Voting. As of the Effective
Date, holders of Term Loan Claims will become bound by the Amended and Restated
Credit Facility Agreement and receive, in full and final satisfaction of their
Allowed Term Loan Claims on the Effective Date, their pro rata share of (i) term
loans under the Amended and Restated Credit Facility Agreement (such term loans
to be in an aggregate principal amount equal to the term loans then outstanding
under the Credit Agreement as of the Effective Date), and (ii) any accrued and
unpaid interest under the Credit Agreement as of the Effective Date. Senior
Notes Claims    Impaired; Voting. On the Effective Date, holders of Senior Notes
Claims will receive, in full and final satisfaction of their Allowed Senior
Notes Claims, their pro rata share of (a) New Second Lien Notes, (b) Mandatorily
Convertible Preferred Stock, and (c) if the Class of Convertible Notes Claims is
a Rejecting Class, 100% of the New Common Stock issued on the Effective Date,
subject to dilution by shares of New Common Stock issuable on conversion of the
Mandatorily Convertible Preferred Stock and shares of New Common Stock issued or
issuable pursuant to the Management Incentive Plan and shares of New Common
Stock issued after the Effective Date. On the Effective Date, the Senior Notes
will be cancelled without further action by or order of the Bankruptcy Court.
Convertible Notes Claims    Impaired; Voting. Solely to the extent that the
Class of Convertible Notes Claims is not a Rejecting Class, on the Effective
Date, the holders of Convertible Notes Claims will receive, in full and final
satisfaction of their Allowed Convertible Notes Claims, their pro rata share of
(i) New Common Stock representing, in the aggregate, 50% of the New Common Stock
issued on the Effective Date, subject to dilution by shares of New Common Stock
issuable upon conversion of the Mandatorily Convertible Preferred Stock, shares
of New Common Stock issued or issuable pursuant to the Management Incentive Plan
and shares of New Common Stock issued after the Effective Date, including
pursuant to the Warrants, and (ii) 50% of the Warrants; provided that, if the
Class of Convertible Notes Claims is a Rejecting Class, then holders of
Convertible Notes Claims will not receive or retain any property under the Plan
on account of such Claims. On the Effective Date, the Convertible Notes will be
cancelled without further action by or order of the Bankruptcy Court. General
Unsecured Creditors    Unimpaired; Non-Voting. Except to the extent that a
holder of a General Unsecured Claim agrees to different treatment, (i) the
Company or Reorganized Company, as applicable, will continue to pay or treat
such General Unsecured Claim in the ordinary course of business as if the
Chapter

 

5

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   11 Case had not been commenced, or (ii) such holder will receive such other
treatment so as to render such General Unsecured Claim Unimpaired, in each case
subject to all defenses or disputes the Debtor may assert as to the validity or
amount of such Claims. Existing Equity Interests    Impaired; Non-Voting. Solely
to the extent that the Class of Convertible Notes Claims is not a Rejecting
Class, on the Effective Date, holders of Existing Equity Interests will receive,
in full and final satisfaction of their Allowed Existing Equity Interest, their
pro rata share of (i) New Common Stock representing, in the aggregate, 50% of
the New Common Stock issued on the Effective Date, subject to dilution by shares
of New Common Stock issuable upon conversion of the Mandatorily Convertible
Preferred Stock, shares of New Common Stock issued or issuable pursuant to the
Management Incentive Plan and shares of New Common Stock issued after the
Effective Date, including pursuant to the Warrants, and (ii) 50% of the
Warrants; provided that, if the Class of Convertible Notes Claims is a Rejecting
Class, then holders of Existing Equity Interests will not receive or retain any
property under the Plan on account of such Claims. On the Effective Date, all
Interests will be cancelled without further action by or order of the Bankruptcy
Court. Intercompany Claims    Unimpaired; Non-Voting. All Intercompany Claims
will be paid, adjusted, reinstated or discharged as determined by the Company.
Other Key Terms

Term

  

Description

Management Incentive Plan    Following the Effective Date, the Reorganized
Company will enter into a post-Restructuring management incentive plan
(“Management Incentive Plan”), under which 10% of the New Common Stock (after
taking into account the shares to be issued under the Management Incentive Plan)
will be reserved for issuance as awards under the Management Incentive Plan. The
Company and Consenting Senior Noteholders shall work in good faith to negotiate
the terms of the Management Incentive Plan and, subject to reaching agreement,
such terms shall be memorialized in a term sheet filed with the Plan Supplement.
All awards issued under the Management Incentive Plan will be dilutive of all
other New Common Stock (after giving effect to conversion of the Mandatorily
Convertible Preferred Stock and any shares issued under the Warrants) issued
pursuant to the Plan. The Plan shall provide that the Management Incentive Plan
will be adopted by the Board of the Reorganized Company within 60 days of the
Effective Date. New Common Stock and Warrants    The Reorganized Company shall
use its commercially reasonable efforts to have the New Common Stock and
Warrants listed on a nationally recognized exchange, as soon as practicable
subject to meeting applicable listing requirements following the Effective Date.
Executory Contracts    All executory contracts and unexpired leases, other than
those expressly identified in the Plan Supplement, will be deemed assumed.

 

6

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Employee Compensation and Benefit Plans    Notwithstanding anything to the
contrary in the Term Sheet or any Definitive Document, all employee compensation
and benefit plans, employment agreements, offer letters, award letters or key
employee retention agreements (collectively, the “Employee Arrangements”) shall
be deemed assumed under the Plan by the Reorganized Company other than any
Employee Arrangement entitling employees to Interests or consideration based on
the value of Interests that have not vested into Existing Equity Interests as of
the Petition Date. If an Employee Arrangement provides in part for an award or
potential award of Interests or consideration based on the value of Interests
that have not vested into Existing Equity Interests as of the Petition Date,
such Employee Arrangement shall be assumed in all respects other than the
provisions of such agreement relating to Interest awards. Notwithstanding the
foregoing, if an Employee Arrangement provides in part for a payment, premium,
or other award upon the occurrence of a “change of control,” “change in
control,” or other similar event, then such compensation or benefit plan shall
only be assumed to the extent that the Restructuring, including consummation of
the Plan, shall not be treated as a change of control, change in control, or
other similar event under such compensation or benefit plan. Board of Directors
of the Reorganized Company   

Upon the Effective Date, the Board of the Reorganized Company will consist of
nine (9) members, with six (6) directors nominated by holders of the Mandatorily
Convertible Preferred Stock, and three (3) directors nominated by the Company
(on behalf of the holders of New Common Stock).

 

After the Effective Date and for a period of two years thereafter (the “Initial
Period”), the directors will be appointed or elected as follows:

 

(a) Six (6) members of the Board will be nominated and elected by a majority of
the holders of the Mandatorily Convertible Preferred Stock (and, for purposes of
such nomination determination, such majority will be deemed to include any
shares of Common Stock previously issued upon conversion of the Mandatorily
Convertible Preferred Stock and continued to be held by a holder that evidences
continuous ownership) (the “Preferred Stock Designees”);

 

(b) three (3) members of the Board will be nominated by the Company Designees
and elected by the holders of New Common Stock (the “Company Designees”).

 

After the Initial Period, the holders of the Mandatorily Preferred Stock shall
be entitled to nominate such numbers of directors as is proportional to their
voting interest on as converted basis (which will be set forth in the Company’s
organizational documents).

 

At such time as the Company is no longer entitled to appoint the Company
Designees, such director positions previously allocated to the Company shall be
elected by the holders of New Common Stock, the outstanding Mandatorily
Convertible Preferred Stock on an as-converted basis and any other outstanding
Common Stock voting together as a single class.

 

The Board will be classified with directors serving for three-year staggered
terms. Company Designees will serve in the class up for reelection at the second
annual meeting after the Effective Date. Preferred Stock Designees and Company
Designees, as applicable, may only be removed for cause. Vacancies in seats held
by Preferred Stock Designees shall be filled by remaining Preferred Stock
Designees and vacancies in seats held by Company Designees shall be filled by
remaining Company Designees.

 

7

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To the extent a nominating committee exists, it will include at least two
(2) Company Designees during the Company Board Designee Period.

 

The new governance structure of the Reorganized Company and its Board and
committees will be set forth in the amended organizational documents of the
Reorganized Company.

 

For the first 18 months after the Effective Date, any sale of all or
substantially all of the business of the Company or its assets, or any change of
control transaction, changes to Board composition or structure (including the
size of the Board) and amendments to organizational documents affecting these
rights must be approved by at least seven (7) of nine (9) directors.

Charter; Bylaws    The charter, bylaws, limited liability company agreements and
other organizational documents of each Reorganized Company’s corporate entity
will (i) be amended or amended and restated by the Reorganized Company
consistent with section 1123(a)(6) of the Bankruptcy Code, if applicable, and
otherwise in accordance with the Plan, and the Restructuring Support Agreements,
(ii) be in form and substance reasonably acceptable to the Requisite Senior
Noteholders, and (iii) notwithstanding anything to the contrary, provide that
the Mandatorily Convertible Preferred Stock shall vote with New Common Stock on
an as-converted basis as to all matters; provided, that during the Initial
Period, the Mandatorily Convertible Preferred Stock shall (a) not vote on
as-converted basis with respect the election of directors, during which time the
holders of the Mandatorily Convertible Preferred Stock will have the right to
nominate the Senior Notes Designees, and the holders of the New Common Stock
will have the right to nominate the Company Designees, and (b) not be entitled
to vote to amend certain provisions of the bylaws and/or certificate of
incorporation in any manner that adversely impacts the Board representation
rights of the holders of the New Common Stock or the Company Designees during
the Initial Period (e.g., removal directors, nomination/election rights, etc.).
Cancellation of Notes, Interest, Instruments, Certificates and other Documents
   Except as provided herein and in connection with the Credit Agreement, on the
Effective Date, all notes, instruments, certificates evidencing debt to, or
Interests in, the Company, including, without limitation, the Senior Notes, the
Convertible Notes, and Existing Equity Interests, will be cancelled and
obligations of the Company thereunder will be discharged. In addition, on the
Effective Date, any registration rights or similar agreements with respect to
Existing Equity Interests will also be cancelled and any obligations of the
Company thereunder will be discharged. Company Guarantees    On the Effective
Date, all guarantees, indemnities, or other credit support provided by the
Company to support its affiliates or subsidiaries shall be reinstated to their
position immediately prior to the Petition Date. Vesting of Assets    On the
Effective Date, pursuant to sections 1141(b) and (c) of the Bankruptcy Code, all
assets of the Company’s Estate will vest in the Reorganized Company free and
clear of all claims, liens, encumbrances, charges and other interests, except as
otherwise provided in the Plan.

 

8

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Compromise and Settlement    The Plan will contain provisions for the compromise
and settlement of Claims stating that, except as provided herein, the allowance,
classification and treatment of Allowed Claims and Interests and their
respective distributions take into account and conform to the relative priority
and rights of such Claims and Interests in connection with any contractual,
legal and equitable subordination rights relating thereto, whether arising under
general principles of equitable subordination, section 510 of the Bankruptcy
Code or otherwise. Survival of Indemnification Obligations and D&O Insurance   
Any obligations of the Company pursuant to its corporate charters, bylaws,
limited liability company agreements, or other organizational documents to
indemnify current and former officers, directors, agents, and/or employees with
respect to all present and future actions, suits, and proceedings against the
Company or such directors, officers, agents, and/or employees, based upon any
act or omission for or on behalf of the Company will not be discharged or
impaired by confirmation of the Plan or the occurrence of the Effective Date.
All such obligations will be deemed and treated as executory contracts to be
assumed by the Company under the Plan and will continue as obligations of the
Reorganized Company. In addition, after the Effective Date, the Reorganized
Company will not terminate or otherwise reduce the coverage under any directors’
and officers’ insurance policies (including any “tail policy”) in effect as of
the Petition Date, and all members, managers, directors and officers of the
Company who served in such capacity at any time prior to the Effective Date will
be entitled to the full benefits of any such policy for the full term of such
policy regardless of whether such members, managers, directors, and/or officers
remain in such positions after the Effective Date. Released Parties    “Released
Parties” means, collectively: (a) the Company and its direct and indirect
subsidiaries; (b) the Consenting Term Lenders; (c) the Administrative Agent;
(d) the Consenting Senior Noteholders; (e) the Senior Notes trustee; and
(f) with respect to each of the foregoing entities in clauses (a) through (e),
such entities’ predecessors, successors and assigns, subsidiaries, affiliates,
managed accounts or funds, and all of their respective current and former
officers, directors, principals, shareholders, members, partners, employees,
agents, advisory board members, financial advisors, attorneys, accountants,
investment bankers, consultants, representatives, management companies, fund
advisors and other professionals, and such persons’ respective heirs, executors,
estates, servants and nominees. Releases   

To the extent the Restructuring is consummated, the Plan will provide for
releases with language substantially to the effect of the following:

 

Releases by the Company1: As of the Effective Date, except for the rights that
remain in effect from and after the Effective Date to enforce the Plan and the
Definitive Documents, for good and valuable consideration, the adequacy of

 

1  For the avoidance of doubt, if any of the Company’s affiliates or
subsidiaries commence a chapter 11 case in connection with the Restructuring,
then the references to the “Company” throughout the “Releases”, “Exculpation”
and “Injunction” provisions hereof, and other applicable provisions of this Term
Sheet, shall automatically be deemed to include such affiliates and
subsidiaries.

 

9

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which is hereby confirmed, including, without limitation, the service of the
Released Parties to facilitate the reorganization of the Company and the
implementation of the Restructuring, and except as otherwise provided in the
Plan or in the confirmation order for the Plan, the Released Parties will be
deemed forever released and discharged, to the maximum extent permitted by law,
by the Company, the Reorganized Company, and Estate and all affiliates or
subsidiaries managed or controlled thereby, from any and all Claims,
obligations, suits, judgments, damages, demands, debts, rights, causes of
action, remedies, losses, and liabilities whatsoever, including any derivative
claims, asserted or assertable on behalf of the Company, or the Reorganized
Company (as the case may be), or the Estate, whether liquidated or unliquidated,
fixed or contingent, matured or unmatured, known or unknown, foreseen or
unforeseen, existing or hereinafter arising, in law, equity, or otherwise, that
the Company, or the Reorganized Company (as the case may be), or the Estate
would have been legally entitled to assert in their own right (whether
individually or collectively) or on behalf of the holder of any Claim or
interest or other person, based on or relating to, or in any manner arising
prior to the Effective Date from, in whole or in part, the Company, the chapter
11 cases, the purchase, sale, or rescission of the purchase or sale of any
security of the Company, the subject matter of, or the transactions or events
giving rise to, any Claim or interest that is treated in the Plan, the business
or contractual arrangements between any of the Company and any Released Party,
the Restructuring, the restructuring of any Claim or interest before or during
the Chapter 11 Cases, the Disclosure Statement, the Restructuring Support
Agreements, and the Plan and related agreements, instruments, and other
documents (including the Definitive Documents), and the negotiation,
formulation, or preparation thereof, the solicitation of votes with respect to
the Plan, or any other act or omission, other than claims or causes of action
arising out of or related to any act or omission of a Released Party that
constitutes fraud or willful misconduct, as determined by a Final Order.

 

Releases by holders of Impaired Claims: As of the Effective Date, except (i) for
the right to enforce the Plan or any right or obligation arising under the
Definitive Documents that remain in effect or become effective after the
Effective Date or (ii) as otherwise expressly provided in the Plan or in
confirmation order for the Plan, in exchange for good and valuable
consideration, including the obligations of the Debtor under the Plan and the
contributions of the Released Parties to facilitate and implement the Plan, to
the fullest extent permissible under applicable law, as such law may be extended
or integrated after the Effective Date, the Released Parties shall be deemed
conclusively, absolutely, unconditionally, irrevocably and forever, released,
and discharged by

 

(1)    the holders of Impaired Claims who voted to accept the Plan;

 

(2)    the RSA Parties, in accordance with and subject to the terms of the
Restructuring Support Agreements;

 

(3)    any Significant Equity Holder (it being understood that the Company
shall, prior to the solicitation of the Plan, exercise reasonable best efforts
to obtain from any Significant Equity Holder a release of the Released Parties
consistent with the below and which shall be effective only upon the Effective
Date); and

 

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(4)    with respect to any entity in the foregoing clauses (1) and (2), such
Entity’s (a) predecessors, successors and assigns, (b) any subsidiaries,
affiliates, managed accounts or funds, managed or controlled by such entity and
(c) all persons entitled to assert claims through or on behalf of such entities
with respect to the matters for which the releasing entities are providing
releases,

 

in each case, from any and all Claims, interests or Causes of Action whatsoever,
including any derivative Claims asserted on behalf of a Debtor, whether known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity
or otherwise, that such Entity would have been legally entitled to assert
(whether individually or collectively), based on, relating to, or arising prior
to the Effective Date from, in whole or in part, the Debtor, the Debtor’s
restructuring, the Chapter 11 Cases, the purchase, sale or rescission of the
purchase or sale of any security of the Debtor or the Reorganized Company, the
subject matter of, or the transactions or events giving rise to, any Claim or
Interest that is treated in the Plan, the business or contractual arrangements
between any Debtor and any Released Party, the restructuring of Claims and
Interests before or during the Chapter 11 Cases, the negotiation, formulation,
preparation, or consummation of the Plan (including the Plan Supplement), the
Restructuring Support Agreements, the Definitive Documents, or any related
agreements, instruments, or other documents, the solicitation of votes with
respect to the Plan, in all cases based upon any act or omission, transaction,
agreement, event or other occurrence taking place on or before the Effective
Date; provided that nothing in this the Plan shall be construed to release the
Released Parties from willful misconduct or intentional fraud as determined by a
Final Order.

 

Releases of Guarantors and Senior Notes Guarantors. In exchange for the
substantial contributions in support of the Plan, and as an integral and
necessary component of the Plan, the Plan will include releases by all holders
of Term Loan Claims and Senior Notes Claims (whether or not such holders voted
to reject the Plan or abstained from voting on the Plan) of any Claims related
to or arising from the obligations of the Guarantors (as defined in the Credit
Agreement) and the Senior Notes Guarantors under the respective guarantees
provided in connection with the Credit Agreement or the Senior Notes Indenture.

 

Notwithstanding anything to the contrary herein, any person or entity
(i) releasing claims hereunder who does not provide (or is not deemed to
provide), a valid and binding release of the Released Parties or (ii) who has
asserted or later asserts a claim against a Released Party, shall not be (or be
deemed to be) a Released Party.

Injunction   

The Plan will provide for an injunction solely with respect to any Claim or
Interest extinguished, discharged, or released pursuant to the Plan, with
language substantially to the effect of the following:

 

(a)    Upon entry of the confirmation order, all holders of Claims and Interests
and other parties in interest, along with their respective present or

 

11

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former employees, agents, officers, directors, principals, and affiliates, shall
be enjoined from taking any actions to interfere with the implementation or
consummation of the Plan in relation to any Claim extinguished, discharged, or
released pursuant to the Plan.

 

(b)    Except as expressly provided in the Plan, the confirmation order, or a
separate order of the Bankruptcy Court or as agreed to by the Debtor and a
holder of a Claim against or Interest in the Debtor, all Entities who have held,
hold, or may hold Claims against or Interests in the Debtor (whether proof of
such Claims or Interests has been filed or not and whether or not such Entities
vote in favor of, against or abstain from voting on the Plan or are presumed to
have accepted or deemed to have rejected the Plan) and other parties in
interest, along with their respective present or former employees, agents,
officers, directors, principals, and affiliates are permanently enjoined, on and
after the Effective Date, solely with respect to any Claims, Interests, and
Causes of Action that will be or are extinguished, discharged, or released
pursuant to the Plan from (i) commencing, conducting, or continuing in any
manner, directly or indirectly, any suit, action, or other proceeding of any
kind (including, without limitation, any proceeding in a judicial, arbitral,
administrative or other forum) against or affecting the Released Parties or the
property of any of the Released Parties, (ii) enforcing, levying, attaching
(including, without limitation, any prejudgment attachment), collecting, or
otherwise recovering by any manner or means, whether directly or indirectly, any
judgment, award, decree, or order against the Released Parties or the property
of any of the Released Parties, (iii) creating, perfecting, or otherwise
enforcing in any manner, directly or indirectly, any encumbrance of any kind
against the Released Parties or the property of any of the Released Parties,
(iv) asserting any right of setoff, directly or indirectly, against any
obligation due the Released Parties or the property of any of the Released
Parties, except as contemplated or Allowed by the Plan; and (v) acting or
proceeding in any manner, in any place whatsoever, that does not conform to or
comply with the provisions of the Plan.

 

(c)    By accepting distributions pursuant to the Plan, each holder of an
Allowed Claim or Interest extinguished, discharged, or released pursuant to the
Plan will be deemed to have affirmatively and specifically consented to be bound
by the Plan, including, without limitation, the injunctions set forth in the
Plan.

 

(d)    The injunctions in the Plan shall extend to any successors of the Debtor
and the Reorganized Debtor and their respective property and interests in
property.

 

(e)    The injunctions in the Plan shall extend to the Guarantors and the Senior
Notes Guarantors to the extent of any Claim or Interest arising from the Credit
Agreement or the Senior Notes Indenture are extinguished, discharged, or
released pursuant to the Plan.

Exculpation    The Plan will provide that “Exculpated Parties” will have the
same meaning as Released Parties.

 

12

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The Plan will contain exculpation provisions with language substantially to the
effect of the following:

 

To the maximum extent permitted by applicable law, no Exculpated Party will have
or incur, and each Exculpated Party is hereby released and exculpated from, any
claim, obligation, suit, judgment, damage, demand, debt, right, cause of action,
remedy, loss, and liability for any claim in connection with or arising out of
the administration of the Chapter 11 Case; the negotiation and pursuit of the
Disclosure Statement, the Restructuring Support Agreements, the Restructuring
Transactions, the Plan, or the solicitation of votes for, or confirmation of,
the Plan; the funding or consummation of the Plan; the occurrence of the
Effective Date; the administration of the Plan or the property to be distributed
under the Plan; the issuance of securities under or in connection with the Plan;
or the transactions in furtherance of any of the foregoing; except for fraud or
willful misconduct, as determined by a Final Order. This exculpation shall be in
addition to, and not in limitation of, all other releases, indemnities,
exculpations and any other applicable law or rules protecting such Exculpated
Parties from liability.

Conditions to Effectiveness   The Plan will be subject to usual and customary
conditions to confirmation and effectiveness (as applicable), as well as such
other conditions that are reasonably satisfactory to the Company and the
Requisite Creditors including the following:  

1.

  the Definitive Documents will contain terms and conditions consistent in all
respects with this Term Sheet and the Restructuring Support Agreements and will
otherwise be acceptable, satisfactory or reasonably satisfactory in form and
substance to the Requisite Creditors to the extent set forth in the
Restructuring Support Agreements;  

2.

  the Bankruptcy Court will have entered the confirmation order for the Plan,
and such confirmation order will not have been reversed, stayed or modified, and
includes the Guarantor Releases;  

3.

  the Restructuring Support Agreements will not have been terminated, and will
be in full force and effect;  

4.

  all Restructuring Expenses will have been paid in full in cash;  

5.

  all governmental and third party approvals and consents, including Bankruptcy
Court approval, necessary in connection with the transactions contemplated by
this Term Sheet will have been obtained, not be subject to unfulfilled
conditions and be in full force and effect, and all applicable waiting periods
will have expired without any action being taken or threatened by any competent
authority that would restrain, prevent or otherwise impose materially adverse
conditions on such transactions.   The conditions to effectiveness may be waived
in writing by the Company together with the Requisite Creditors. Securities
Exemptions   The issuance and distribution under the Plan of (i) the Mandatorily
Convertible Preferred Stock, and New Common Stock, if applicable, to the Senior
Noteholders, (ii) New Common Stock to the Convertible Noteholders and Existing
Equity Interests; (iii) the Warrants to the Convertible Noteholders and Existing
Equity Interests, and (iv) New Common Stock issuable upon the exercise of the
Warrants and the conversion of the Mandatorily Convertible

 

13

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     Preferred Stock, will be exempt from registration under the Securities Act
or other applicable securities
laws without further act or action by any Person pursuant to section 1145(a) of
the Bankruptcy Code and/
or any other applicable exemptions. Fees and Expenses    The Company shall pay
or reimburse all reasonable and documented fees and out-of-pocket expenses
(regardless of whether such fees and expenses were incurred before or after the
petition date) of Kirkland & Ellis LLP, FTI Consulting Inc., Milbank, Tweed,
Hadley & McCloy LLP, and Moelis & Company, in connection with the subject matter
of this Term Sheet and the Restructuring pursuant to the economic terms of their
respective engagement letters. The Company will also pay the fees and expenses
of the Administrative Agent (including its counsel) in the manner set forth in,
and to the extent required by, the Credit Agreement. Retention of Jurisdiction
   The Plan will provide for a broad retention of jurisdiction by the Bankruptcy
Court for (a) resolution of claims, (b) allowance of compensation and expenses
for pre-Effective Date services, (c) resolution of motions, adversary
proceedings or other contested matters, (d) entering such orders as necessary to
implement or consummate the Plan and any related documents or agreements and
(e) other purposes. Resolution of Disputed Claims    The Plan will provide
customary procedures for the resolution of disputed Claims, including the
ability (but not requirement) to establish a claims bar date pursuant to an
order of the Bankruptcy Court. Once resolved, the claimants will receive
distributions, if any, in accordance with the provisions of the Plan and the
classification of their Allowed Claim. Definitive Documents    This Term Sheet
is indicative, and any final agreement will be subject to the Definitive
Documents. The Definitive Documents will contain terms, conditions,
representations, warranties, and covenants, each customary for the transactions
described herein consistent with the terms of this Term Sheet, and in accordance
with the applicable Restructuring Support Agreements. Other Terms    Acceptable
to the Required Parties in accordance with the applicable Restructuring Support
Agreements.

 

14

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ANNEX A

Certain Defined Terms

 

15

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Defined Terms “Administrative Expense Claim”    Means any right to payment
constituting a cost or expense of administration incurred during the Chapter 11
Cases of a kind specified under section 503(b) of the Bankruptcy Code and
entitled to priority under sections 507(a)(2), 507(b), or 1114(e)(2) of the
Bankruptcy Code, including, without limitation, (a) the actual and necessary
costs and expenses incurred after the Commencement Date and through the
Effective Date of preserving the Estates and operating the businesses of the
Debtor; (b) Fee Claims; (c) Restructuring Expenses; and (d) any Claim under the
DIP/Exit Facility, against a Debtor. “Allowed”    Means, with reference to any
Claim or Interest, a Claim or Interest (a) arising on or before the Effective
Date as to which (i) no objection to allowance or priority, and no request for
estimation or other challenge, including, without limitation, pursuant to
section 502(d) of the Bankruptcy Code or otherwise, has been interposed and not
withdrawn within the applicable period fixed by the Plan or applicable law, or
(ii) any objection has been determined in favor of the holder of the Claim or
Interest by a Final Order, (b) that is compromised, settled, or otherwise
resolved pursuant to the authority of the Debtor or Reorganized Company, (c) as
to which the liability of the Debtor or Reorganized Debtor, as applicable, and
the amount thereof are determined by a Final Order of a court of competent
jurisdiction, or (d) expressly allowed hereunder; provided, however, that
notwithstanding the foregoing, (x) unless expressly waived by the Plan, the
Allowed amount of Claims or Interests shall be subject to and shall not exceed
the limitations or maximum amounts permitted by the Bankruptcy Code, including
sections 502 or 503 of the Bankruptcy Code, to the extent applicable, and
(y) the Reorganized Debtor shall retain all claims and defenses with respect to
Allowed Claims that are Reinstated or otherwise Unimpaired pursuant to the Plan.
“Cash”    Means legal tender of the United States of America. “Cause of Action”
   Means any action, claim, cross-claim, third-party claim, cause of action,
controversy, demand, right, lien, indemnity, guaranty, suit, obligation,
liability, loss, debt, damage, judgment, account, defense, remedies, offset,
power, privilege, license and franchise of any kind or character whatsoever,
known, unknown, foreseen or unforeseen, existing or hereafter arising,
contingent or non-contingent, matured or unmatured, suspected or unsuspected,
liquidated or unliquidated, disputed or undisputed, secured or unsecured,
assertable directly or derivatively, whether arising before, on, or after the
Petition Date, in contract or in tort, in law or in equity or pursuant to any
other theory of law (including, without limitation, under any state or federal
securities laws). Causes of Action also includes: (a) any right of setoff,
counterclaim or recoupment and any claim for breach of contract or for breach of
duties imposed by law or in equity; (b) the right to object to Claims or
Interests; (c) any claim pursuant to section 362 or chapter 5 of the Bankruptcy
Code; (d) any claim or defense including fraud, mistake, duress and usury and
any other defenses set forth in section 558 of the Bankruptcy Code; and (e) any
state law fraudulent transfer claim.

 

16

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Defined Terms “Chapter 11 Case”    Means the case under chapter 11 of the
Bankruptcy Code to be commenced by the Company by no later than the Outside
Petition Date, in the Bankruptcy Court and styled In re Walter Investment
Management Corp.; provided, that, to the extent that any subsidiary or affiliate
of the Company commences a case under chapter 11 of the Bankruptcy Code, the
Company will seek to have such case jointly administered on a procedural basis
with the Company’s chapter 11 case, and any reference to the Chapter 11 Case
shall be deemed to include such other cases (if any) filed by the Company’s
subsidiaries and affiliates. “Claim”    A “claim,” as defined in section 101(5)
of the Bankruptcy Code, as against any Debtor. “Class”    Any group of Claims or
Interests classified by the Plan pursuant to section 1122(a)(1) of the
Bankruptcy Code. “Confirmation Hearing”    A hearing at which the Bankruptcy
Court will confirm the Plan, as applicable. “Definitive Documents”    Shall have
the same meaning as in the Restructuring Support Agreements, as applicable.
“Disclosure Statement”    The disclosure statement filed by the Debtor in
support of the Plan. “Effective Date”    Shall have the same meaning as in the
Restructuring Support Agreements. “Estate(s)”    Individually or collectively,
the estate or estates of a Debtor created under section 541 of the Bankruptcy
Code. “Fee Claim”    Means a Claim for professional services rendered or costs
incurred on or after the Commencement Date through the Effective Date by
professional persons retained by the Debtor by an order of the Bankruptcy Court
pursuant to sections 327, 328, 329, 330, 331, or 503(b) of the Bankruptcy Code
in the Chapter 11 Case. “Final Order”    Means an order or judgment of a court
of competent jurisdiction that has been entered on the docket maintained by the
clerk of such court, which has not been reversed, vacated or stayed and as to
which (a) the time to appeal, petition for certiorari, or move for a new trial,
reargument or rehearing has expired and as to which no appeal, petition for
certiorari, or other proceedings for a new trial, reargument, or rehearing shall
then be pending, or (b) if an appeal, writ of certiorari, new trial, reargument,
or rehearing thereof has been sought, such order or judgment shall have been
affirmed by the highest court to which such order was appealed, or certiorari
shall have been denied, or a new trial, reargument, or rehearing shall have been
denied or resulted in no modification of such order, and the time to take any
further appeal, petition for certiorari or move for a new trial, reargument, or
rehearing shall have expired; provided, however, that no order or judgment shall
fail to be a “Final

 

17

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Defined Terms      Order” solely because of the possibility that a motion under
Rules 59 or 60 of the Federal Rules of Civil
Procedure or any analogous Bankruptcy Rule (or any analogous rules applicable in
another court of
competent jurisdiction) or sections 502(j) or 1144 of the Bankruptcy Code has
been or may be filed with
respect to such order or judgment. “Impaired”    Means, with respect to a Claim,
Interest, or Class of Claims or Interests, “impaired” within the meaning of
sections 1123(a)(4) and 1124 of the Bankruptcy Code. “Intercompany Claim”    Any
Claim against any of the Company’s entities held by another of the Company’s
entities. “Intercompany Interest”    An Interest in any of the Company’s direct
or indirect subsidiaries held by another of the Company’s entities or an
Interest in the Company held by an affiliate of the Company (other than any
Preferred Stock or Existing Equity Interest in Holdings). “Interests”    Means
any equity security (as defined in section 101(16) of the Bankruptcy Code) of a
Debtor, including all shares, common stock, preferred stock, or other instrument
evidencing any fixed or contingent ownership interest in any Debtor, whether or
not transferable, and any option, warrant, or other right, contractual or
otherwise, to acquire any such interest in a Debtor, whether fully vested or
vesting in the future, including, without limitation, equity or equity-based
incentives, grants, or other instruments issued, granted or promised to be
granted to current or former employees, directors, officers, or contractors of
the Debtor, to acquire any such interests in a Debtor that existed immediately
before the Effective Date. “Other Secured Claim”    Means a Secured Claim, other
than an Administrative Expense Claim, a Claim in connection with the DIP/Exit
Facility, a Priority Tax Claim, a Term Loan Claim, or a Revolving Loan Claim.
“Petition Date”    Has the same meaning as in the Restructuring Support
Agreements. “Plan Supplement”    Has the same meaning as in the Restructuring
Support Agreements. “Priority Non-Tax Claim”    Means any Claim other than an
Administrative Expense Claim or a Priority Tax Claim, entitled to priority in
payment as specified in section 507(a) of the Bankruptcy Code. “Priority Tax
Claim”    Means any Secured Claim or unsecured Claim of a governmental unit of
the kind entitled to priority in payment as specified in sections 502(i) and
507(a)(8) of the Bankruptcy Code. “Reinstate”, “Reinstated”, or “Reinstatement””
   Means leaving a Claim Unimpaired under the Plan.

 

18

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Defined Terms

“Rejecting Class”    Means a Class that does not vote to accept the Plan in
accordance with section 1126 of the Bankruptcy Code. “Reorganized Company”   
The Company as reorganized under the Plan, if applicable. “Restructuring
Expenses”    Means, with respect to, (i) the Requisite Term Lenders, the
reasonable fees, costs, and expenses of (a) Kirkland & Ellis LLP and (b) one law
firm acting as local counsel (if any), and (c) FTI Consulting Inc.; (ii) the
Administrative Agent, to the extent provided under the Credit Agreement;
(iii) the Requisite Senior Noteholders, the fees, costs, and expenses of:
(a) Milbank, Tweed, Hadley & McCloy LLP, (b) one law firm acting as local
counsel (if any), and (c) Moelis & Company, in each case, pursuant to the
economic terms of their respective engagement letters with the Company or, in
the case of the Administrative Agent, the Credit Agreement, and (2) all
prepetition and postpetition reasonable and documented out-of-pocket expenses of
any Consenting Senior Noteholder (excluding any individual Consenting
Noteholder’s attorneys’ fees or expenses), if any, but not exceeding $200,000 in
the aggregate for all Consenting Senior Noteholders; and (iv) the indenture
trustee under the Senior Notes Indenture, to the extent provided under the
Senior Notes Indenture, one law firm as counsel to the indenture trustee under
the Senior Notes Indenture, and one firm acting as local counsel for, if any, in
each case in accordance with the Senior Notes Indenture. “Restructuring
Transactions”    Has the same meaning as in the Restructuring Support
Agreements. “Revolving Credit Facility”    Has the same meaning as in the Credit
Agreement. “Revolving Loan Claims”    Means any Claims arising from or in
connection to the Revolving Credit Facility. “Required Parties”    Means the
Required Parties (as defined in the Term Lender RSA) and the Required Parties
(as defined in the Senior Notes RSA). “Requisite Creditors”    Means the
Requisite Term Lenders (as defined in the Term Lender RSA) and the Requisite
Senior Noteholders (as defined in the Senior Noteholder RSA). “Requisite Senior
Noteholders”    Has the same meaning as in the Senior Noteholder RSA. “RSA
Parties”    Means the Consenting Senior Noteholders (as defined in the Senior
Noteholder RSA) and the Consenting Term Lenders (as defined in the Term Loan
RSA). “Significant Equity    Any person, entity or group of affiliated persons
and/or entities that, as of the Petition Date, holds, controls or has the power
to vote, in

 

19

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Defined Terms Holder”    the aggregate, in excess of 15% of the total
outstanding Existing Equity Interests as of such date, and has nominated an
individual currently sitting on the board of directors of the Company.
“Unimpaired”    Means, with respect to a Claim, Interest, or Class of Claims or
Interests, not “impaired” within the meaning of sections 1123(a)(4) and 1124 of
the Bankruptcy Code.

 

20

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Execution Version

Exhibit 1

Amended and Restated Credit Facility – Term Sheet

This Amended and Restated Credit Facility Term Sheet (this “Credit Facility Term
Sheet”) is attached as Exhibit 1 to the Term Sheet, which is attached as Exhibit
A to the Amended and Restated Restructuring Support Agreement, dated as of
October 20, 2017 (the “RSA”). Capitalized terms used but not otherwise defined
in this Credit Facility Term Sheet shall have the meanings ascribed to such
terms in the RSA or in the Credit Agreement, as applicable.

In connection with the Restructuring, the Prepackaged Plan will provide that the
Credit Agreement will be amended and restated (the “Amended and Restated Credit
Facility” and such amended and restated agreement, the “Amended and Restated
Credit Facility Agreement”). The Amended and Restated Credit Facility will be on
terms substantially consistent with the Credit Agreement except for those
modifications expressly set forth below and such other immaterial modifications
as may be mutually agreed.

The effectiveness of the Amended and Restated Credit Facility will be
conditioned on the Effective Date.

 

#    Term    Amendment

1

   Definitions - “Acceptable Intercreditor Agreement”    Attach to the Amended
and Restated Credit Facility Agreement form of a first lien/second lien
intercreditor agreement to be executed in connection with issuance of the New
Second Lien Notes (as defined below), which will (x) be silent second lien with
no right to provide DIP financing (other than on a second lien basis or if the
Amended and Restated Credit Facility is repaid in full) and (y) provide that any
and all claims and obligations of the lenders under the Amended and Restated
Credit Facility, including any principal, interest, penalties, fees, expenses,
costs, charges, make-whole premium, prepayment premium, and/or other premium and
any deficiency claim, whether secured or unsecured, shall be senior in all
respects to the payment of any claim or obligation under the second lien
indenture (including, for the avoidance of any doubt, any principal, interest,
penalties, fees, expenses, costs, charges, make-whole premium, prepayment
premium, and/or other premium and any deficiency claim, whether secured or
unsecured) thereunder

2

   Definitions - “Applicable Margin”    L + 6.00%

3

   Definitions - “Consolidated EBITDA”   

To be revised to mean “Adjusted EBITDA” as disclosed each quarter in the filed
10Q or 10K, as applicable, of the Borrower

 

Plug numbers to be used for the three fiscal quarters ending immediately prior
to the Effective Date, which plug numbers shall be the Adjusted EBITDA numbers
reported by the Borrower in its periodic report on form 10-Q or 10K, as
applicable, filed with the SEC for each such fiscal quarter.

4

   Definitions - “Tranche B Term Loan Maturity Date”    The Amended and Restated
Credit Facility will have a maturity of June 30, 2022

--------------------------------------------------------------------------------

#   Term    Amendment 5   Section 2.11 - Repayment of Term Borrowings   
Scheduled additional principal amortization payment on the Effective Date of
$37.5M Scheduled additional quarterly principal amortization as follows: $7.5M
per quarter for fiscal year ending 2018; $10M for the first quarter of the
fiscal year ending 2019; $26.7M for the second quarter of the fiscal year ending
2019; $36.7M for the third quarter of the fiscal year ending 2019; $36.7M for
the fourth quarter of the fiscal year ending 2019; and $15M per quarter for each
fiscal quarter ending thereafter. 6   Section 2.13(d) - Excess Cash Flow   
Commencing with the fiscal year ending 2018, calculated as (but not less than
zero): 50% of Excess Cash Flow; provided that in no event shall the amount of
the prepayment exceed an amount equal to (i) 75% of Excess Cash Flow (calculated
to include the amount of fixed amortization) minus (ii) the amount of fixed
amortization 7   Section 2.25 - Incremental Facilities    Reduce each of the
Aggregate Incremental Amount and Incremental Revolving Credit Commitments to $0;
provided the Borrower will be permitted to incur an incremental letter of credit
facility that is secured on a pari passu basis with the Term Loans in an
aggregate amount not to exceed $30M (a “Replacement LC Facility”) 8  
Section 5.01(f) - Compliance Certificate    Borrower to provide a reaffirmation
of its obligations on a quarterly basis 9   New Section 5.01(i) - Information
Covenants    Add requirement to deliver prompt notice of (i) reasonable
expectation to terminate, (ii) actual termination of, and/or (iii) written
notice received of an event that if uncured would give rise to a termination
event under, any Designated Material Contract (to be defined in a manner
reasonably acceptable to the Requisite Term Lenders). 10   Section 5.21 -
Designation of Subsidiaries    No new Unrestricted Subsidiary may be designated
without Requisite Term Lenders’ consent 11   Section 6.01 - Liens Negative
Covenant   

•       Permit the liens securing the New Second Lien Notes

 

•       Permit the posting of cash collateral in respect of GSEs, Ginnie Mae or
other government agencies, and insurers in an aggregate amount not to exceed
$50M at any time outstanding

 

•       Permit either (a) the posting of cash collateral to secure letters of
credit; provided, that the aggregate face amount outstanding of such letters of
credit shall not exceed an amount equal to $30M less the amount (if any) of any
Letters of Credit outstanding and secured under the Revolving Credit Facility or
(b) any liens on collateral securing any Replacement LC Facility

 

•       General liens basket - reduce existing basket of the greater of $75M and
15% of Consolidated EBITDA to $22.5M securing obligations other than third party
debt for borrowed money (6.01(xxvii))

12   Section 6.02 – Consolidation, Merger, Sale of Assets, Etc.   

•       Sale of RMS Business to be subject to a no Event of Default condition
(6.02(xvii))

13   Section 6.04 – Indebtedness Negative Covenant   

•       Permit the incurrence of the New Second Lien Notes (provided that
(i) interest on not less than $50 million of principal amount of the New Second
Lien Notes shall be paid in the form of PIK Interest (as defined in Exhibit 2 of
the Term Sheet) unless otherwise agreed by the Requisite Term Lenders and
(ii) no cash interest shall be payable on previously accrued PIK Interest)

 

•       Permit either (a) letters of credit in an aggregate amount not to exceed
$30M at any time outstanding (provided, that in the event the Borrower’s
Revolving Credit Facility remains outstanding, no more than $20M of Letters of
Credit may be issued thereunder) or (b) a Replacement LC Facility

 

•       Purchase money indebtedness basket - reduce existing basket of $50M to
$25M (6.04(iv)) and include GAAP freeze for treatment of operating/capital
leases

 

•       Acquired/assumed indebtedness basket - reduce existing basket of the
greater of $100M and 15% of Consolidated EBITDA to $50M (6.04(vii))

 

2

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#   Term    Amendment     

•       Non-Credit Party indebtedness basket – eliminate existing basket
(6.04(xvi))

 

•       General Unsecured Debt basket - reduce existing basket of the greater of
$100M and 15% of Consolidated EBITDA to $50M (6.04(xix))

 

•       Eliminate Permitted Incremental Equivalent Debt basket (6.04(xx))

 

•       Revise Permitted External Refinancing Debt basket to require right of
first offer to existing lenders to the extent incurred Permitted External
Refinancing Debt has a higher All-in Yield than the Term Loans under the Amended
and Restated Credit Facility (6.04(xxi))

14   Section 6.05 – Investments Negative Covenant   

•       Permitted Acquisitions (6.05(xii)) - require pro forma compliance with
all financial covenants and eliminate Available Amount basket

 

•       Securitization Entities, MSRs, etc. (6.05(xv) through (xix)) - require
(a) to be consistent with past practices or generally accepted market standards
as well as in the ordinary course of business or (b) pro forma compliance with
all financial covenants

 

•       Unrestricted Subsidiary (6.05(xx)) - require that in the case of any
transfer of Equity Interests of an Unrestricted Subsidiary that is owned by a
Credit Party, must be transferred to another Credit Party

 

•       Eliminate Available Amount basket (6.05(xxii))

 

•       General Investments basket - reduce existing basket of the greater of
$75M and 25% of Consolidated EBITDA to $30M (6.05(xxiii))

 

•       Eliminate UFG, Walter Capital Investments basket (6.05(xxiv))

15   Section 6.06 - Affiliate Transactions Negative Covenant   

•       Revise introduction to delete the carve-out parenthetical related to
Borrower and Wholly-Owned Restricted Subsidiary and replace it with a
parenthetical that permits transactions (i) by and among Credit Parties (ii) by
and among Restricted Subsidiaries of the Borrower that are not Credit Parties
and (iii) by and among Credit Parties and Wholly-Owned Restricted Subsidiaries
that are not Credit Parties to the extent that such transactions are in the
ordinary course of business and consistent with past practices

 

•       Revise 6.06(ii) to require such transactions be in the ordinary course
of business and consistent with past practices

16   New Section 6.07 - Financial Covenants    Add the following financial
covenants (the definitions of which will be consistent in all material respects
with the relevant spreadsheet delivered by the Borrower to Kirkland and FTI via
email on or about October 16, 2017 and otherwise reasonably acceptable to the
Requisite Term Lenders), each to be tested on a quarterly basis and calculated
on a Pro Forma Basis, beginning as of 12/31/17 (provided that for purposes of
such calculations, “cash” shall exclude (i) restricted cash (other than cash in
Residual Trusts) and (ii) cash held in Unrestricted Subsidiaries) (definitions
to be reasonably acceptable to the Requisite Term Lenders):

 

     12/31/17     3/31/18     6/30/18     9/30/18     12/31/18     3/31/19    
6/30/19     9/30/19     12/31/19
and
thereafter  

Asset Coverage Ratio A

     1.40 x      1.40 x      1.40 x      1.40 x      1.40 x      1.45 x     
1.45 x      1.45 x      1.50 x 

Asset Coverage Ratio B

     1.00 x      1.00 x      1.00 x      1.00 x      1.00 x      1.00 x     
1.00 x      1.00 x      1.00 x 

Interest Coverage Ratio

     1.20 x      1.20 x      1.20 x      1.25 x      1.25 x      1.75 x     
2.00 x      2.00 x      2.25 x 

First Lien Net Leverage Ratio

     8.50 x      7.75 x      7.75 x      6.75 x      5.75 x      5.00 x     
4.50 x      4.00 x      3.50 x 

 

3

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#   Term    Amendment 17   Section 6.10 - Modifications of Certain Agreements
Negative Covenant   

Revise ability to modify junior lien notes documents and convertible notes or
Permitted Refinancing thereof to prohibit amendments that result in (6.10(y)):

 

•       making the relevant maturity date earlier or making the weighted average
life to maturity earlier or require additional prepayments with respect to any
event

 

•       effectuating an amendment that would not be permitted under criteria for
a Permitted Refinancing

18   Section 7.01 - Events of Default   

•       Modify Section 7.01(c)(i) (covenants without a grace period) to include
Sections 5.05 (Compliance with Statutes), 5.08 (Fiscal Years) and 5.21
(Designation of Subsidiaries)

 

•       Modify Section 7.01(d) (cross defaults) to (i) remove carve-out for
defaults by Securitization Entities that are not Immaterial Subsidiaries,
(ii) add termination by the counterparty under any Designated Material Contract
that is not otherwise replaced by a comparable commercial contract and the
failure to so replace such Designated Material Contract would reasonably be
expected to have a Material Adverse Effect and (iii) reduce the materiality
threshold to $30M

 

•       Modify Section 7.01(e) (Bankruptcy, etc.) and 7.01(i) (Judgments) to
remove carve-out for Securitization Entities that are not Immaterial
Subsidiaries and modify 7.01(i) (Judgments) to reduce the materiality threshold
to $30M

 

•       Modify first proviso in final paragraph of Section 7.01 to add Events of
Default specified in Section 7.01(e) with respect to any Borrower or Restricted
Subsidiary that is not (i) an Immaterial Subsidiary, (ii) a Securitization
Entity or (iii) any entity related to the RMS Business to cause automatic
acceleration

19   Conditions to Effectiveness   

•       The Borrower shall engage in good faith discussions with the Requisite
Term Lenders to develop a structure prior to soliciting acceptances for the Plan
pursuant to which, (a) a holding company is formed immediately above the
Borrower, which holding company shall deliver a parent guaranty and pledge
agreement pledging all of the equity interests of the Borrower to the Collateral
Agent or (b) an intermediate holding company is formed immediately below the
Borrower, which intermediate holding company shall hold all of the equity
interests of the direct subsidiaries of the Borrower currently existing and
deliver a guaranty and pledge agreement pledging all of the equity interests of
such direct subsidiaries to the Collateral Agent

 

•       Executed junior lien notes documents governing new second lien notes
issued to replace the Senior Unsecured Notes, in form and substance
substantially consistent with the terms described on Exhibit 2 to the Term Sheet
and otherwise reasonably acceptable to the Requisite Term Lenders (the “New
Second Lien Notes”)

 

•       The cancellation of the Convertible Notes in exchange for the warrants
in form and substance described on Exhibit 4 to the Term Sheet

 

•       Master Reaffirmation Agreement executed by all Credit Parties

 

•       All deposit account control agreements as required by the RSA shall
remain in full force and effect or deposit account control agreements on
substantially the same terms shall be executed and delivered

 

•       The Security Agreement shall be amended to require customary deposit
account control agreements (with springing control) with respect to all deposit
accounts (other than Excluded Accounts, such other types of accounts as
reasonably agreed by the Borrower and the Requisite Term Lenders that shall be
deemed to be Excluded Accounts and such other accounts as reasonably agreed by
the Borrower and the Requisite Term Lenders) held by each Credit Party
(including, for the avoidance of doubt, any deposit account established after
the Effective Date)

 

•       Other customary conditions including, but not limited to, customary
legal opinions from Borrower’s counsel (including local counsel) and payment of
all legal and other advisors’ fees and expenses as provided in the RSA and
mutual releases

20   Other    Additional technical amendments to effectuate the foregoing to be
included, in each case to be reasonably acceptable to the Borrower and the
Requisite Term Lenders

 

4

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Execution Version

Exhibit 2

New Second Lien Notes Term Sheet1

 

Issuer    Walter Investment Management Corp. Guarantors    Guarantors under the
Credit Agreement Maturity    December 31, 2024 Principal Amount    $250 million
Ranking    Subordinated junior ranking as to security and payment of any and all
claims in respect of the New Second Lien Notes (including any deficiency claim
with respect to any New Second Lien Notes), lower in priority only to Term Loans
and “Senior Indebtedness” permitted by the Credit Agreement. Interest   

•       Payable semi-annually in arrears in cash at 9% per annum

 

•       Interest on up to $50 million principal amount (plus previously accrued
PIK Interest payable), at the election of the Issuer (subject to limitations in
the Exit Facility Documents), in arrears by increasing the principal amount or
by issuing additional notes (“PIK Interest”) at 9% per annum

Collateral / Intercreditor   

•       All collateral granted by the Issuer and Guarantors pursuant to the
Credit Agreement

 

•       Silent second lien intercreditor agreement, acceptable to the Requisite
Term Lenders

Redemption   

•       Standard and customary for transactions of this size and nature,
including 3-year “no call” protection

 

•       Customary 35% equity claw-back

Change of Control   

•       Change of control put at 101%

 

•       Change of control definition consistent in all material respects with
the existing indenture for the Senior Notes

Negative Covenants   

•       Permitted Indebtedness: Consistent in all material respects with the
existing indenture for the Senior Notes

 

•       Permitted Liens: Consistent in all material respects with the existing
indenture for the Senior Notes

 

•       Restricted Debt Payments: Consistent in all material respects with the
existing indenture for the Senior Notes

 

 

1  Capitalized terms used but not defined in this term sheet shall have the
meanings ascribed to such terms in the Restructuring Support Agreement, dated as
of October 20, 2017, to which this term sheet is attached as Exhibit 2 to
Exhibit A.

--------------------------------------------------------------------------------

  

•       Permitted Investments: Consistent in all material respects with the
existing indenture for the Senior Notes

 

•       Asset Sales: Consistent in all material respects with the existing
indenture for the Senior Notes

 

•       Business: Customary lines of business limitation covenant for Issuer and
its Restricted Subsidiaries

 

•       Other Covenants: Customary in all material respects with the existing
indenture for the Senior Notes

 

Notwithstanding the forgoing, such covenants to be adjusted as appropriate to
reflect the revised capital structure of the Company giving effect to the
consummation of the Plan, in a manner consistent with current market terms,
covenants and conditions for second lien high yield notes.

Events of Default    Consistent in all material respects with the existing
indenture for the Senior Notes, adjusted as appropriate to reflect the revised
capital structure of the Company giving effect to the consummation of the Plan,
in a manner consistent with current market events of default for second lien
high yield notes.

 

2

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Exhibit 3

Mandatorily Convertible Preferred Stock Term Sheet2

 

Issuer    Walter Investment Management Corp. (the “Issuer” or the “Company”)
Securities, Face Amount    The Issuer will issue 100,000 shares of Preferred
Stock with a per share face amount of $1,000 (the “Face Amount”) for an
aggregate Face Amount of $100 million Dividend    No entitlement to dividend
except in the event of dividends paid on the New Common Stock in which case, the
Preferred Stock is entitled to share pro rata in dividends paid, on an
“as-converted” basis Mandatory Conversion Date    December 31, 20223 Conversion
Rate    As of any determination date for any optional or mandatory conversion,
each share of Preferred Stock will convert into such number of shares of New
Common Stock as is equal to then-current Conversion Ratio. The Conversion Ratio
shall be determined pursuant to a formula, such that the aggregate number of
shares of New Common Stock issuable upon conversion of the entire class of
Preferred Stock would, immediately after such full conversion, represent 73% of
the total number of issued and outstanding shares of New Common Stock of the
Company as of the effective date of the Plan, subject to dilution by shares of
New Common Stock issued or issuable pursuant to the MIP and by shares of New
Common Stock issued after the effective date of the Plan, including shares of
New Common Stock issued pursuant to the Warrants. Conversion   

•       At Holders Option: The Preferred Stock shall be convertible into a
number of shares of New Common Stock equal to the aggregate Face Amount of the
shares so converted divided by the Per Share Conversion Price (i) at the
election of the holder thereof after the Effective Date4 and (ii) as a class in
its entirety, in whole but not in part, at any time after the Effective Date, at
the option of the holders of 66 2/3rds of the aggregate outstanding Face Amount.

 

•       At Issuer’s Option: N/A

 

•       Mandatory Conversion: The Preferred Stock, as a class in its entirety,
shall be mandatorily convertible at the earlier of (i) the Mandatory Conversion
Date, (ii)

 

2  Capitalized terms used but not defined in this term sheet shall have the
meanings ascribed to such terms in the Restructuring Support Agreement, dated as
of October 20, 2017, to which this term sheet is attached as Exhibit 3 to
Exhibit A.

3  Five year term

4  Subject to Section (4)(e) of the Restructuring Support Agreement, dated as of
October 20, 2017, with the Consenting Senior Noteholders.

 

3

--------------------------------------------------------------------------------

   at any time following one year after the Effective Date, the time that the
VWAP of the New Common Stock exceeds 150% of the Conversion Price5 per share
(the “Conversion Threshold”) for at least 45 trading days in a 60 consecutive
trading day period, including each of the last 20 days in such 60 consecutive
trading day period and (iii) a change of control transaction with a value that
is greater than or equal to the Conversion Price. Redemption    The Preferred
Stock is not subject to mandatory redemption. Voting Rights   

Vote with New Common Stock of the Issuer on an as-converted basis as to all
matters; provided, however, that during the Initial Period (which will be
defined as the period from the Effective Date through the second anniversary of
the Effective Date), the Preferred Stock shall (1) not vote on as-converted
basis with respect the election of directors, during which time the holders of
the Preferred Stock will have the right to nominate and elect six (6) directors,
and the holders of the New Common Stock will have the right to nominate and
elect three (3) directors, and (2) not be entitled to vote to amend certain
provisions of the bylaws and/or certificate of incorporation in any manner that
adversely impacts the rights of the holders of the New Common Stock to elect
directors by such holders of New Common Stock during the Initial Period (e.g.,
removal directors, nomination/election rights, etc.).

 

In addition, approval of a majority of the shares of Preferred Stock then
outstanding shall be required for modifications to the terms and conditions of
the Preferred Stock or issuances of additional shares of stock (other than New
Common Stock) ranking senior to or pari passu with the Preferred Stock as to
liquidation or dividends.

Ranking    Preferred Stock will rank senior (to the extent of the Liquidation
Preference) in liquidation, winding-up or dissolution (including any
distribution in respect thereof) to shares of New Common Stock and any other
equity securities of the Issuer. Liquidation Preference    In the event of a
voluntary or involuntary liquidation, winding-up or dissolution, each holder of
Preferred Stock will be entitled to receive the greater of (i) a liquidation
preference per share of Preferred Stock, prior to any distribution with respect
to any other equity security of the Issuer, equal to the Liquidation Preference,
and (ii) the amount payable per share, participating on an “as converted” basis,
upon liquidation to the holders of the New Common Stock. The “Liquidation
Preference“ shall equal (i) the Face Amount, increased by (ii) an amount
equivalent to the amount that would have been determined, compounding quarterly,
at a rate of seven percent (7%) per annum, on the Face Amount, to but not
including, the date of any liquidation, winding-up or dissolution. Thereafter,
holders of Preferred Stock will have no right or claim to the remaining assets,
if any, of the Issuer. Registration Rights    Customary demand and piggyback
registration rights for persons beneficially owning 10% or greater of the New
Common Stock or who are otherwise affiliates of the Company.

 

 

5  Conversion Price shall equal the aggregate Face Amount divided by the
Conversion Ratio.

 

4

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Anti-Dilution and other   

Customary public company anti-dilution protection in connection with any:
(i) subdivision or combination of outstanding the New Common Stock, (ii) stock
split or stock split, or (iii) issuance of rights or warrants to all or
substantially all holders of New Common Stock.

 

Subject to exceptions, pre-requisites and thresholds to be reasonably agreed and
consistent with maintaining applicable private placement offering exemptions and
orderly marketing of a securities offering, the Company will provide notice and
a bona fide opportunity to participate in private offerings of equity securities
of the Company after the Effective Date.

Governance    None, except as set forth in the RSA and attachments thereto.

 

5

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Exhibit 4

Warrants Term Sheet6

Set forth below are key illustrative terms of Series A Warrants (“Series A
Warrants”) that will be issued pursuant to the Plan

 

Issuer    Walter Investment Management Corp. (the “Issuer” or the “Company”)
Number of Warrants   

The Series A Warrants shall be subject to a governing warrant agreement (“Series
A Warrant Agreement”), and each such warrant is exercisable for one share of New
Common Stock.

 

The number of Series A Warrants shall be determined at the effective date of the
Plan such that, in the aggregate, the holders of Convertible Notes and the
Existing Shareholders (through the Series A Warrants and shares of New Common
Stock issuable to them under the Plan) will receive 50% of the incremental total
equity value of the Company above $325 million (the “Series A Threshold”) (after
giving effect to the conversion of the Preferred Stock).

Exercise Price    The exercise price per Series A Warrant shall be set at a
price per share of New Common Stock such that the Series A Warrants are “in the
money” at and above the Series A Threshold (expressed on a per share basis).
Form of Settlement   

•       Full Settlement: If Full Physical Settlement is elected, the Issuer
shall deliver, against payment of the Exercise Price, a number of shares of New
Common Stock equal to the number of Series A Warrants exercised

 

•       Cashless Exercise: If Cashless Exercise is elected, the Issuer will
withhold from issuance a number of shares of New Common Stock issuable upon the
exercise of the Series A Warrants which, when multiplied by the Market Price of
the New Common Stock, is equal to the aggregate price for the number of shares
of New Common Stock for which the Series A Warrants are being exercised at the
Exercise Price (assuming the Exercise Price for all such shares of New Common
Stock was being paid in cash), and such withheld shares shall no longer be
issuable under the Series A Warrants

 

 

6  Capitalized terms used but not defined in this term sheet shall have the
meanings ascribed to such terms in the Restructuring Support Agreement, dated as
of October 20, 2017, to which this term sheet is attached as Exhibit 4 to
Exhibit A.

 

6

--------------------------------------------------------------------------------

Expiration Date    “Close of Business” on December 31, 20277 Business
Combinations    On and after merger, consolidation or similar transactions and
business combinations with another person in which New Common Stock is converted
into, exchanged for or otherwise changed into other securities and / or
property, the Series A Warrant Agreement shall provide customary rights to
receive, upon exercise, the consideration such holder would have received if
such Series A Warrants had been exercised immediately prior to such transaction.
Anti-Dilution    Customary anti-dilution provisions, in substantially the same
form as provided for the Preferred Stock. Registration Rights    Customary
demand and piggyback registration rights for persons beneficially owning 10% or
greater of the New Common Stock or who are otherwise affiliates of the Company
for Warrants and underlying warrant shares, subject to cut-back on a pari passu
basis with shares issuable upon conversion of Preferred Stock.

Set forth below are key illustrative terms of Series B Warrants (“Series B
Warrants”) that will be issued pursuant to the Plan

 

Issuer    Walter Investment Management Corp. Number of Warrants   

The Series B Warrants shall be subject to a governing warrant agreement (“Series
B Warrant Agreement”), and each such warrant is exercisable for one share of New
Common Stock.

 

The number of Series B Warrants shall be determined at the effective date of the
Plan such that, in the aggregate, the holders of Convertible Notes and the
Existing Shareholders (through the Series B Warrants, the Series A Warrants and
shares of New Common Stock issuable to them under the Plan) will receive 60% of
the incremental total equity value of the Company above $500 million (the
“Series B Threshold”) (after giving effect to the conversion of the Preferred
Stock).

Exercise Price    The exercise price per Series B Warrant shall be set at a
price per share of New Common Stock such that the Series B Warrants are “in the
money” at and above the Series B Threshold (expressed on a per share basis).

 

 

7  Ten year maturity

 

7

--------------------------------------------------------------------------------

Form of Settlement   

•       Full Settlement: If Full Physical Settlement is elected, the Issuer
shall deliver, against payment of the Exercise Price, a number of shares of New
Common Stock equal to the number of Series B Warrants exercised

 

•       Cashless Exercise: If Cashless Exercise is elected, the Issuer will
withhold from issuance a number of shares of New Common Stock issuable upon the
exercise of the Series B Warrants which, when multiplied by the Market Price of
the New Common Stock, is equal to the aggregate price for the number of shares
of New Common Stock for which the Series B Warrants are being exercised at the
Exercise Price (assuming the Exercise Price for all such shares of New Common
Stock was being paid in cash), and such withheld shares shall no longer be
issuable under the Series B Warrants

Expiration Date    “Close of Business” on December 31, 20278 Business
Combinations    On and after merger, consolidation or similar transactions and
business combinations with another person in which New Common Stock is converted
into, exchanged for or otherwise changed into other securities and / or
property, the Series B Warrant Agreement shall provide customary rights to
receive upon exercise the consideration such holder would have received if such
Series B Warrants had been exercised immediately prior to such transaction.
Anti-Dilution    Customary anti-dilution provisions, in substantially the same
form as provided for the Preferred Stock. Registration Rights    Customary
demand and piggyback registration rights for 10% or greater holders of New
Common Stock, for Warrants and underlying warrant shares, subject to cut-back on
a pari passu basis with shares issuable upon conversion of Preferred Stock.

 

 

8  Ten year maturity

 

8

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EXHIBIT B

FORM OF JOINDER AGREEMENT FOR CONSENTING TERM LENDERS

This Joinder Agreement to the Amended and Restated Restructuring Support
Agreement, dated as of October 20, 2017 (as amended, supplemented or otherwise
modified from time to time, the “Agreement”), by and among Walter Investment
Management Corp., and the holders of the Term Loans (together with their
respective successors and permitted assigns, the “Consenting Term Lenders” and
each, a “Consenting Term Lenders”) is executed and delivered by
                     (the “Joining Party”) as of              , 2017. Each
capitalized term used herein but not otherwise defined shall have the meaning
set forth in the Agreement.

1. Agreement to be Bound. The Joining Party hereby agrees to be bound by all of
the terms of the Agreement, a copy of which is attached to this Joinder
Agreement as Annex I (as the same has been or may be hereafter amended, restated
or otherwise modified from time to time in accordance with the provisions
hereof). The Joining Party shall hereafter be deemed to be a “Consenting Term
Lender” and a “Party” for all purposes under the Agreement and with respect to
any and all Claims held by such Joining Party.

2. Representations and Warranties. With respect to the aggregate principal
amount of Term Loans set forth below its name on the signature page hereto, the
Joining Party hereby makes the representations and warranties of the Consenting
Term Lenders set forth in Section 7 of the Agreement to each other Party to the
Agreement.

3. Governing Law. This Joinder Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
any conflict of laws provisions which would require the application of the law
of any other jurisdiction.

[Signature Page Follows]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.

 

CONSENTING TERM LENDER By:  

                     

Name:   Title:  

 

Notice Address:

 

 

 

Fax:                                                              

Attention:  

                     

Email:  

                     

 

Acknowledged: WALTER INVESTMENT MANAGEMENT CORP. By:  

                     

Name:   Title: